All Forum Posts by: Grace Wang

@Michael Mullins

That is a good idea! I will definitely consider that. Thank you.

Hi Narayana, 

Yes, we closed on the property. It is hard to say how well it will turns out right now. It is a rough neighborhood, a lot of section 8, management intensive. The previous landlord didn't take care of property at all, we end up have to replace the roof, redo the upper siding, and rebuild a balcony, as well as new exterior paint, and clear out a lot of junk. It has been 4 months, and we just finished renovating the exterior. We got lucky that the inherent tenants are paying rent on time, so that we have instant cash flow coming in. The renovation process will be slow though, since it has to wait till there is turn over. 

With the exterior renovation, we were able to increase the rent close to market rent. Since the other property around it didn't bill back the utility, we didn't do that neither, just charge a flat fee for utilities. 

Anyway, with $32,000 renovation so far, we probably looking to spend a total  $60,000 eventually (with interior renovation for the rest of the units and replacing all the windows). 

Assuming 8% vacancy rate, since we did a lot of big ticket items upfront, we will budget 5% for cap ex and maintenance, and 10% management fee. It would result in roughly $1000 cash flow /month, and ~10% cash on cash, and 7% cap rate. 

However, we don't have concrete numbers for another year. I will let you know how it goes. 

It is definitely a difficult project, but I did learn a lot. Looking back, I should have bought the property a lot less, maybe for $190,000 for it to be a BRRRR. However, I still don't regret buying the property, since there are a lot of value lessons I would not learn otherwise.

@Gail K. and

@Brian Garlington 

Thank you so much for the detailed suggestions. I will look into implementing those and let you guys know how it goes. Thank you so much everyone for all of your helpful insights. 

@Yvette M. may I ask you why 620 FICO? I am trying to interpret the credit score. Beside looking at the credit score, what do you think of a person with medical bills going to collection and they simply not planning to pay back ?

@Account Closed the medium rent in the area is $810. I match it. Maybe I should go a bit lower ?

@Michaela G. that is a good point. I need to go back and look. 

@Darren Budahn thank you for the detailed advice. It is in C/C- neighborhood. I will lower the income requirement and get rid of the good credit score. I feel a bit uneasy on allowing someone with criminal history renting the unit though. 

Thank you @Anastasia Jordan @Jassem A. for quick respond and great advice! 

I recently purchased a 4 plex in a rougher neighborhood. Many people responded to my vacancy units ad on craigslist. 

However I am running into problems that neither they are not qualified, or qualified tenants don't like the neighborhood. 

The criteria I used: 1. no criminal/eviction history. 2 good rental/credit history. 3. Make 3 x of the rent household income ($2500 minimum). 4. able to pay first and last month of rent along with $300 security deposit. 

The ad has been posted over a month now, I  start to wonder what is not working: 

1.  I can lower the rent, but it might attract wrong types of renters.

2. I can lower the income requirement?  

3. I need to look into section 8 tenants? 

Any advice would be very appreciated. Where do I find more information of requirement of section 8? what paper work would be required?

Thank you everyone in advance. 

Grace 

Check out first technology credit union. They offered very good rate.

@Account Closed, thank you for taking time to answer my questions! Good tips! I will for sure try that.