All Forum Posts by: Ira Sullivan

@Ira Sullivan

Class C

@Peter Nikic

Hey Peter! This property is more central. Closer to Auburn. So with this being a Class Class neighborhood is it wise to put that much money into the deal. My original idea was to get the property back up and running, add a few amenities and if it goes well, add a few more to the property. Is that a terrible idea? 

@Arn Cenedella

Hey Arn!

Thanks for the response. I currently has 2 Multifamily properties. One 10 unit and one 7 unit. I also help manage 39 units and an on sight maintenance man. My partner has been investing in Multifamily for awhile longer than I have. He typically invests in Class A and I typically look at Class C and D properties with 8%+ Cap Rates and a Value Add Property in which the building needs work. The last building I bought, half of the units needed work. We got those fixed up and leased out. Huge COC Returns. Again my last purchase was in a Class D area. Huge headache at first but it's paying dividends now.

In regards to the expenses, I expect them to be around 50% of the gross income.

I do have pictures of the unit and an idea of what the costs will be. I agree that the rehab may come in a bit higher than what’s projected, but it depends on each unit condition. I’m anticipating that some may be worse than the others but not all in the same condition. This is an older property that looks decent on the outside but I’m under no illusions that this will be an easy rehab. If we get it under contract, we plan to bring in a contractor, roofer and plumber to scope the lines.

We also plan to hire an on sight manager. Someone that can manage the units and stay on site. That will help with costs. There is an office on site too so that’s a plus.

Love to hear your thoughts.

Thanks

@Stan Watkins

Thanks so much Stan for the response. I’m going to answer your questions in two responses. A few questions my partner and I are still working on. However to answer a few, I currently own 17 units and my partners portfolio is a lot larger but he has experience with primarily Class A properties. I currently have a few single family (Class A), a 10 unit and 7 unit building in a Class D Area. I do not mind buying in a Class C or D Area. I work with a team of investors and I also help manage 56 units. We have a maintenance guy on site at our current property.

We intend to buy and hold this property for 5 years and then sale. Over the last month I’ve been studying this area looking for details that would help us make our decision. I have been there to look at the property more closely. I drove around the area to see how the locals live and I spoke with a few members of the community to get their insight about the building. Seems like it’s been unoccupied for awhile. The community seems to be a basic lower working middle class town. Very close to a military base and it’s 3 miles from a university.

Due Diligence Phase- We plan to hire a plumber, roofer, contractor and a licensed building inspector. This process will give us a good indication of what we’re getting into.

Again, thank you for the response.

So my 12 week goal is to purchase an apartment building with 34 or more units. I’ve come across the following deal. This deal is in Alabama. I’m about 2 hours away. I plan to hire an on-site manager and maintenance man. Please let me know what you think.

The 52 Units consist of 12 Buildings. This is a Class C Property

Asking Price: 1,550,000

Estimated Rehab: 650,000

Average Cap Rate: 8%

16 of the 52 units are currently occupied bringing in over $11,000 a month.

This would be a major rehab. New roofs, flooring, paint, exterior upgrades—Parking.

Cooling-Window AC

Heat-Gas Furnace

City Water and Sewer

Owners Pro Forma:

ARV: 2,860,000

Gross Income: $433,000

Annual Expenses: $99,000

Expenses: Property Taxes, Gas Bill, Insurance, Maintenance Reserves, Water and Sewer, Property Management

Hey Chandra! How’s the rental market in Phenix City? I’m interested in purchasing an apartment complex there. @Chandra Reid

Have a seventeen unit project in Tuscaloosa AL that needs immediate attention

Private lender needed to finish funding this deal!

Amount needed : $150,000

As-Is : $400,000

ARV : $635,000

Units currently bringing in 61.5K a year.  Needs about 40k in rehab. 5 units not rented.  Needs upgrading.

Exit Strategy : Refinance to my local lender once deed and financials are seasoned.

-Ira

@Steve Morris.

Thanks Steve. This deal will have to be a cash or hard money deal. The question is, since it’s in a Class D neighborhood, is it worth my time. It is cash flowing except it needs some work before all 17 units are fully functioning and ready to lease. Currently 12 of the 17 are rented.

@Mary Mitchell

It’s a 10 Unit and a 7 Unit property. The owner is trying to sell them together.

So I'm looking to acquire my first multiunit. I know the process is somewhat similar to purchasing a single family but I would like a guide.  Does anyone have any ideas where I can find a great straight-forward process tool?