All Forum Posts by: Gregory Schwartz

@Ronak Shah I'm waiting on more financials. You make a good point I need to dig into the town and local demographics more.

@Zach Griffin My thought on value add is that if they are and have been 100% occupied that maybe they're under market rent enough that we can increase prices. The problem is determining market rent in such a rural location. I'd like to automate it as much as possible. The self-storage lot were I keep my extra crap has been running without any staff for the last 2 months no problem in large part due to the coronavirus. 

@Greg Dickerson what sort of numbers or percentages should I expect. I'm familiar with multifamily vacancies and expenses but don't know as much about self-storage. 

I stand by that downtown Tripoli, Lybia is a war zone. But hey it hits the 2% rule. 

I just ran across a price decrease on a self-storage business here in Texas. It claims its 100% occupied. I'm waiting on numbers but what expenses should I keep in mind as I analyze this smallish (55 unit) very basic rural self-storage. Some stats...

40x 10'x20'

5x   20'x20'

A 5500sqft shop

Asking 500k

Its about 10 min outside of a 5,000 person town and about 35min from the nearest 100k+ population center. 

@Sahleem Lee I wouldn't jump state lines. Like you said major changes in taxes can have major effects on prices. If the duplex scene is that bare I would give a call to an appraiser with a lot of experience. Another option is to call a community bank as @Whitney Hutten said, call up the lender you plan to refi with. They should be able to let you know how they'll determine the value that they'll lend to you on. 

@Sahleem Lee I think the first thing you need to establish is your end goal for this purchase. Do you want to hold it forever, 5 years, or flip it? Do you want it to cash flow or do you want to BRRRR all your money out so you can aggressively grow your portfolio?

ARV can be tricky and even appraisers will struggle. In my area, we reach back 1-2 years and open up the search to 3-5 miles. This is very different from SFH. Find a good REA who invests and they should be able to help.

When analyzing deals I like to start with the rent then subtract 25% for the vacancy, maintenance, CapEx and management. From there, use the actual property tax numbers and a good guestimation for insurance. This leaves you with the variables; debt and profit. Now you determine what cash-on-cash you want and what loan product fits that goal. Personally, I'm shooting for 8% cash on cash and at least $100 per door.

I hope this helps. 

@Jake Davis I just became a full time agent. Having 6 months worth of savings or a side hustle that can sustain you is super important. Here in my 5th month I’m finally starting to get busy.

@Dan Heuschele my short term thinking got the best of me. When I purchased the building I only had the one tenant and I had hoped (which is not a business term or tactical task) to keep them so I could offset the loss during the rehab. No I know to budget to remove all inherited tenants. Lessons learned the hard way. Seems to be a theme in my life.

@Marc Winter we considered that outlet a safety concern and made it our primary concern. The bigger issue is that this is an inherited tenant who lives in a unit that is below my standards for a rental so upgrading is inevitable. As things break I will continue to upgrade versus repair. 

@Patrick M. you make some great points. We searched around and found the best for the price used appliances we could. This tenant was inherited, I thought by providing a more structured property management style and being a more active landlord they would pay on time. I was wrong and now we're terminating our lease. 

@Nick C. I would love to not have to provide washers and dryers. We even considered a w/d rental fee instead of simply providing them. The issue is that every unit on this street of identical units provides w/d. Here in Texas, we can serve a notice to vacate that doesn't necessarily have to include to option to pay in full and reinstate the lease. 

@Lavonn Warren you should be able to rent per bedroom at a higher rate than if you rented the entire house. Facebook market place is a great place to find per bedroom rent rates in your area. 

This weekend I received a repair request from a tenant. The tenant's stove shorted (the old outlet arched) popping the breaker and her dryer wasn't performing up to par. This same tenant is consistently late on rent and doest respond to my emails to provide rent payment assistance or payment plans. As much as I wanted to ignore this request or even worse buy a toaster oven and a dryer line for hang drying clothes, I broke down and spend one month's rent on upgraded appliances. 

So now I still don't have May's rent, I'm out $650 and she's enjoying an upgraded kitchen. 

How would you have dealt with the situation?