All Forum Posts by: Greg Franck

@Jason Sinclair Seems excessive but also not certain what brand the windows you are looking at, the warranty, construction, tempered / non tempered, double hung vs single hung....  Point is a lot can drive the price up to that figure.  I ordered new windows for a 4 family a few weeks ago, went with a quality mid grade double hung vinyl window with a lifetime glass break warranty for about $400 installed. The catch is that it is about 6-8week to get the order. As the others have stated as well your pricing seems high so shop it. However the lead time seems right unfortunately. Look at the bright side, at least you can spread out the cash outlay for the project!

 You can absolutely use % to gross income to estimate repairs and cap ex withholdings.  This is exactly how commercial lenders underwrite properties. I have found over the years that when I analyze my portfolios performance there is a similarity in asset type in regard to repair and cap ex total percentage against income. I tweak these figures annual based on percent.  Maybe I am doing things wrong but this method has helped me properly maintain my properties and have plenty of reserves on hand. I guess to each their own. 

@Hemang S. I own a few 85 year old buildings in the STL area. I use 8% as repair reserve, 5-7% for Capex (dependent upon system updates), and 2-3% vacancy credit loss. I have a lower vacancy because I have found in my multi family portfolio the properties can float themselves at 75% vacancy rate and still maintain positive cash flow. A good starting point is to engage a commercial lender and ask them for their "stress tolerances", which will provide you with how they underwrite a property. This is the minimum starting point for all of my reserve withholdings.

@Kunal Lakhwani Don't be worried about maintenance requests.  This is the normal course of owning real estate. As others have said this is an easy problem to fix. This should get you motivated though to vette some vendors local to the area that can deal with common maintenance issues such as this. You can then provide these vendors to the PM and ask them to contact your preferred providers first.  This will save you time and money in the long run. As a side note, I had a similar issue with my first rental.  Shortly after the first rent check came through we had a damaging storm that blew a large number of shingles off the roof. I recall being so worried at the time, when I look back at it now I see it is just part fo the business.  Point is don't be discouraged, you are on a great path.  Look at the bright side, you were able to collect the first rent payment :)

If this is the case Anna you probably need to ask yourself even if you can get insurance protections what are the odds of the animal being called out by the city or in an event in which there is an attack by the animal will the insurance provider actually step up.  Insurance companies are great at collecting that premium but will certainly scrutinize any claims to find their wiggle room. As stated earlier I would look for another qualified tenant with less risk. 

@Anna Delos Santos

Who is placing this restriction? Is this a county restriction, insurance provider restriction, etc. I would be very hesitant to try to circumvent any restriction placed by my insurance provider or the county the property is located in.  if this is the case, my advise would be to select another qualified tenant that doesn't have a pet which violates set rules. 

Gervon. Deals are there in times with high rates and low rates so be patient and ensure that the deal pencils to YOUR numbers and desired return profile. Rates simply have the most impact on pricing, which is something to think through when you plan to use a low downpayment product as you will be "underwater" faster. If you believe rates are going up that most likely means downward pressure on prices. Just be mindful of this. I wish the best for you!

@Hector Salas

As stated by the others here you are going to have PMI on any low to no down payment product. The advice from the others on this thread about speaking with your lender to gain further perspective is right on. My question is are you approaching your numbers including you as a non-paying tenant (living in the building) or with the building at full occupancy at market rents? If you are only considering the former in these figures then a negative ROI may not be a bad thing depending on what you can capture with the building operating as a NOO space.

@Mikel Kaubfa

You may want to consider including utilities that would have the ability to place a lien on the property due to non-payment. Most notably in my area this is sewer. I currently DO NOT include this in the rent but going forward I am considering it. The tenants are always behind on the sewer as it cannot be shut off like other utilities, and even though we require it to be placed in their name ultimately I am responsible for paying it as the property owner regardless of usage. To my knowledge other utilities such as gas / electric will pursue the tenant for payment and I have no liability for the bill. Hope the is helpful.

@Rick Albert

I saw some indicators of this in a few different info sources as well as anecdotally through local channels. We are going to use a bit of both strategies (shorten available term / heighten qual standards) dependent upon asset class. In my opinion the real losers in all of this will be tenants as quality housing will be more difficult to find. Hopefully we see the expiration of the moratorium at the close of June.