All Forum Posts by: Guy Azta

Hi Bryan,

While I'm not the most qualified person to dispense any advice, I do own a number of apartment buildings, including a 12 unit, and I often wonder just like you where it's best to spend money to attract good residents. From my combined experience, it seems that a little exterior work can go a long way, as well as some interior.

First, consider hiring a pro photographer and get some good photos. Maybe pay them a little extra to retouch photos for you. I normally pay photographers $200 per session. Some of them can provide you with aerial photography and even video. Some candidates would be happy to view videos of the place.

Second, it pays to keep the place clean. Whether you, your manager or one of the residents can keep the place clean, it would be a boon.

Third, for exterior updating, painting the place could be expensive, so perhaps touch-ups would be a first step to start, and continue it as a work in progress. Maybe a little bit of landscaping. You may be able to get someone on Craigslist who needs a little extra money and can make the place a bit nicer. See if anything stands out, like broken windows, broken handrails, staircase etc, that may need attention. People may get a bad vibe if they see a place looking to run down.

Fourth, since you have multiple vacancies, start in small steps. Consider starting with the best vacant unit you currently have and see what you can afford to update. Replacing a vanity isn't all that expensive. Refinishing a bathtub shouldn't be either. See what needs updating in the kitchen. Fix holes in walls and dents in flooring. Give it a nice new coat of paint and pick some nice colors. Another option you may consider, if you have an occupied unit in great shape, offer the resident a discount to downgrade. They will move to a unit in lesser condition for a reduction in rent and you will have a unit in much better shape ready to go.

Over time, keep making improvements. In a year or two, if you keep at it, you'll come a long way. If on the other and you see that this building is not performing, perhaps consider selling. Would be much easier to sell if the building is not entirely distressed.

Hi Amanda,

Can only speak from experience. All my properties are out of town. I am not interested in managing anyway, as I am too busy with my life and work. I do own a 4-plex that currently rents each unit at $700 and I bought it for $135K. Now, that property had all tenants move out around the same time, for various reasons. Was combination of evictions and breaking leases. We don't know exactly what caused this "mass exodus" (it's not poor management), but the point is that it was sitting vacant for a few months. Not only that, but there were various repairs needed. All in all, this cost me a good few thousands of dollars, and we just got the dust settled. The moral of the story is that if you end up overpaying, situations like this could end up being a nightmare. In this particular case the acquisition price was low enough to mitigate these issues.`1

You mentioned you like to fix everything yourself. Again, as a business owner (not in real estate), I cannot see why anyone would want to fix their properties, as I would assume you have a career to pursue, however I think you mentioned your husband is a contractor, which makes sense. The solution I found is to get quotes from the property managers, and if I think the quotes are high, I will contact local contractors or trade people and get additional quotes. It takes a little time and effort, but over time you make some contacts. I actually own 9 properties in several markets and they're managed by 7 different property management companies. I found that for the most part, most repairs are pretty small and the amounts are reasonable. If I have a question, I ask. I'm not a nickel pincher and real estate is not the bulk of my income, so I don't sweat a $70 plumbing bill thinking it could have been $35. On the balance, I find the expenses to be pretty fair and square. You just have to find the right company to work with.

Over time you can assemble a good team of contractors to call on for the 4-plex or whichever property you buy out of town, or you may discover that the property management company is fair and reasonable and can offer you quality work for reasonable prices. I would say that if you are the type who frets over every line item and gets upset at the thought you could have done it for less, it may not be worth the emotional price. Some people don't factor the emotional price into investments. Quality of life matters as well. It pays to know thyself and choose what to do and what not to ;-)

Good luck!

Hi Danielle, looks like you got a few replies with lists of items you need to have. When you say you managed single family houses, you mean you own them as well, right?

Can only speak from my experience. I started in SFR and then moved to residential multis (3-plex, 4-plex) and now in small apartment buildings (12 unit). Looking back, it has been a major headache. Several people warned me about this. The theory goes that you want to have a property large enough where you can hire a rental agent and a maintenance person on site. While my SFRs have all been occupied with same tenants for many years (I have 6 right now), the apartments have not. The 3-plex had 2 tenants quitting this year, one was in eviction. The 4-plex had all tenants move out around the same time, combination of evictions and breaking leases. It stood vacant for a few months until we were able to rent the units back again. Cost me thousands of dollars. The 12 unit is in its own league of headaches. Haven't owned it for a year and already had multiple move-outs, section 8 stop payments and had to renovate bunch of units. THOUSANDs of DOLLARs out the door! Gone. Now, to be fair, I still like apartment buildings and the upside is that you can make more money. But it's nothing like SFRs. SFRs, if you have nice middle class houses, are pretty nice and easy, at least from my experience. Apartments, unless you have a really nice one in a good area, are not easy.

If you don't have a job and like to manage your own properties (I own businesses not in real estate and have zero interest in managing any property) and want to learn from the experience, be sure to do the numbers projects correctly, remember that the taxes will most likely increase after purchase and get really good advice from local experts.

Best of luck!

Hello BP,

Wondering if anyone here got a good contact for a maintenance person / contractor / handyman in Cincinnati. I own a small apartment building and looking to find someone who can take on occasional jobs, such as units turnovers and some relatively standard type maintenance work. Hopefully, it is someone you worked with before and you deem to be honest, responsible, affordable and able to perform quality work.

Happy to contact any lead anyone here cares to send

Thanks

GA

Thank you

Hello BP,

Seen similar posts asking referrals for contractors in Cincinnati with not much traction. Hoping to see if anyone can have some good references.

I am looking for a roofer in Cincinnati, as well as some contractors. The roofer is for an immediate job and contractors for various ongoing.

Appreciate any references anyone is willing to provide

Thanks

Hello, I work with Jim Shapiro from Weybridge Realty for a 12 unit building in the Cincinnati area and then Dix property for an SFR in the Greater Cincinnati. Both are good. I have a list of Cincinnati property managers for multi units I compiled earlier this year and happy to share

Hello, I work with Jim Shapiro from Weybridge Realty for a 12 unit building in the Cincinnati area and then Dix property for an SFR in the Greater Cincinnati. Both are good. I have a list of Cincinnati property managers for multi units I compiled earlier this year and happy to share

Thank you @Joseph Cornwell

Not sure if I fully understand the entire post. 4-plex properties in California these days come at a steep price. If you are going with traditional lender, you are probably looking at 25% downpayment. 

If you are looking for properties that need repair, you may not be able to obtain loan, so you may need to go creative, get private money etc. Repair will totally depend on the condition of the properties. You can get a contractor to take a look and give you a starting point. I certainly would not try to have tenants do the work for you. There are so many reasons to not do that, I think it's self explanatory. 

You can use Loopnet.com to do a quick scan of California and see what piques your interest. You can also use Zillow, RedFin and the likes. They all have filters where you can define different parameters, such as sq ft, lot size etc. Cali is very competitive. I did a quick search and in LA seems like the starting price is around $500K, even though I saw a few in the $400K range, assuming they are in not so great areas.

Even though cap rates are not heavily used for 4-plexes, keep in mind that overall the cap rates will not be very high.