All Forum Posts by: Account Closed

The price for rental units will never drop. Multi-unit properties are bullet-proof against recessions. The only way the price for rental units will drop will be after some virus wipes out half the population of the world and even then the rental business may be even stronger.

Waiting for the price of multi-unit prices to drop is like people thinking Disneyland won't be crowded on a rainy day so everyone goes to Disneyland.

I've been purchasing multi-unit properties when they were $65k for beautiful units in desirable areas. Four years ago, I purchase an 11-unit building in a not-so-desirable area for $125k per unit. The building has been a dog and money-sucker for the past four years and now I can sell the units for $350 each. My $65k units I purchased in 2001 are now worth $550k each.

So, where will it stop? It will not stop when the bank see the units are priced so high they can't justify loans because a very high percent of buyers are paying cash. I am a number-crunching fool and I can't figure out why investors want to invest millions of dollars for a 1% to 2% ROI because in there is not much upside for appreciation and appreciation is really the only way money can be made because rental cash-flow hardly keeps up with inflation.

So, don't be the guy who keeps saying the stop price is too high and waiting for the price to come down. We won't be on this earth long enough to see that happen for multi-units.

The only time I use a staging company is for selling properties worth more than $2 million. I can't imagine why a landlord would need to using staging for a rental unit. These days, most homes worth less than $800k sell in a few days with no staging. So, why waste the time and money.

Never saw that exact style frame, but we get that plastic at Home Depot, or a glass company. I can't remember exactly how we cut the plastic because if you use the wrong tool you won't get a straight edge.

You can find much better information by searching Google for pros and cons. 

Many suppliers, vendors and loan companies don't like to do business with LLC's because the LLC attempts to make officers not liable for any debt. I run a another business and I have a lot of trouble collecting money from LLC's.

An LLC is much more complicated that other corporations when paying officers and doing taxes. And...I've had people say that LLC's work great for them.

I stuck with a C-corporation for the past 50 years and at the end of every year I make sure there is no money in my corporation accounts. This way, my corporations never show a profit and I avoid double taxation.

If a person has a lot of equity to protect against lawsuits I went with an Irrevocable Living Trust.

I don't pay any attention to the Cap Rate because there are many factors that are more important
e.g. you need to know if you can increase your ROI substantially with rent increases, appreciation and a little rehab.

As you can see on many websites the Cap Rate is about 3.2% to 5.2% and when looking at the Cap Rate no sane person should be investing $350k to $400k per rental unit that is renting for $1500 to $1800 per month. The property taxes, alone, with those prices make the purchase insane. 

IMO, the spread is too small to flip this house when you consider buying and selling fees, insurance, temporary utilities, cleaning, repairs, property insurance, income tax and a lot more. This may be  good for someone looking for their own house. I would not purchase this as a buy and hold rental rental property unless I got a super good deal and only if I can see serious property value appreciation. The only way I am thinking you can make a profit is by getting her to change her mind about listing the property and try to get a referral fee from a broker. Personally, I believe that most sellers should be represented by a licensed broker so the seller is well-protected against fraud. If she pays a broker $10,000 and gets $25,000 more for the property then she is making a very wise decision. For you, maybe, you can get half of the 5% commission, or $5,000 for your referral fee. I don't know if that much is legal.