All Forum Posts by: James Denon

Looking for some feedback for what I consider a pretty bigh bill for apartment turnover: $2400 for a 800sqft 3bed 1 bath apartment. It has a small living room. The apartment is in Springfield Massachusetts area. Lower level of a triplex.

Walls and ceiling 3daysx3worders=9 man-days of labor $1080.

Materials : Paint and caulking= $260

Total $1340

2. General repairs:

Remove old caulking and apply new to bathroom

Replace door locks to front and back entrances

Install 2 batteries to smoke alarms

Install 9 miniblinds

Clean windows and install 5 window screens.

2 daysx 2 workers= 4 man-days of labor $480

Materials= $146

Total= $626

3. Replace carpets

Remove and replace carpets from 2 small rooms

Trash and debris removal $50 labor

2 days x 1 worker= 2 man-days of labor $240

Materials $201

Total $491

Total $2400 for a small apartment turnover.

I dont think this is a sustainable cost given that the unit only rents for $1050 and there would be turnovers every other year.

These are the hidden killers of cash flow.

I think the labor is cheap but very inefficient. It should not take 9 man-days to paint a small apartment. There were only a few holes to patch. Only one big one.

What are your thoughts on what I was charged?

Next turnover, I am contemplating getting a 5gal bucket of ceiling paint and hiring a guy from craigslist or thumbtack and painting all the walls, ceilings and trims white. I dont think the class of tenants I serve care about having the walls yellow semi gloss.

Anyone know a good reliable and reasonable handyman in springfield? I am thinking of having a handyman on call for bigger repairs/turnovers.

I will tell my property manager to call him to do anything that exceeds $100. Has anyone done this?

Thanks in advance.

Hi Jerome, Welcome. I have a few small properties. I have similar goals.

I like use the BRRR method to get into a larger property. Not many good deals out there.

Let's catch up sometime.

@Michael Noto, Looks like you guys are making good progress.

If you were keeping this property, who would you use to refinance?

I assume it hasnt been 6months so the seasoning period isnt over. 

@Matthew Enos 1K seems really low for closing costs. The title insurance plus appraisal costs more than that. Do you roll some expenses into the loan? 

@Steve Bracero I would like to get some capital to invest in more properties and to maximize the ROI.

It is hard to find good deals these days. Everything becomes a bidding war.

@Marcus Johnson What bank did you use?

@Chris Seveney

For now it is in my own name. I haven't decided whether I should put it in an LLC or trust yet.

I need some help.

I am getting ready to cash out refinance a property I bought all cash back in June 2017 in Springfield, Massachusetts.

I got couple of quotes. All of them are in the low 5 to mid 5's with couple of thousand closing costs @75% LTV which is pretty high in my book!

I have perfect credit and no debt.

I am surprised that non-owner occupant, 3 family is penalized so much over an owner occupant.

If anything, I am more capable of paying the mortgages better than an owner occupant because the property produces more than 3.5 times the mortgage payment. It is professionally managed.

Does anyone know credit unions or banks that are more investor friendly and who can make logical risk assessments? Preferably 80-85% LTV with low 4's interest.

I am kicking myself. Monson Savings Bank was willing to do 4.1% with 70%LTV back in July. I shoud have done that. Instead, I waited for the seasoning period to be over and to get a better %LTV with Fannie and Freddie type loans.

I know it sounds stingy to sweat over 1% interest rate but that makes ~$100 monthly difference in cash flow. For a managed property, you are working with thin margins. So, $100 makes a difference in long term cash flow.

@Rob L. Thanks 

What type of closing costs, %LTV and interest rates are you getting from the Merrimack Credit union?

@Rob L. Which credit unions do you work with?