All Forum Posts by: Jason Bausman

Currently looking to refinance a duplex and seeking any advice or opinions on moving forward with trying to decide on doing a cashout refinance or just refinancing the loan to a lower rate. Current rate on the mortgage 4.75% with a balance of 255K. The new max loan amount would be $276,500 so able to pull about 20K out. The rates and cost are below from the lender. 

2.875% = $5,575 cost

3.0% = $4,261 cost

3.125% = $3,085

3.25% = $1,585 cost

3.375% = $105 cost

Hello,

Looking for recommendations for property management companies in the Columbus area.  Properties vary from $500-1500 in monthly rent per unit.

Thanks

It would be the OSU campus area. Specifically northwest campus. 

Thank you to everyone who posted info on this thread. I am looking to find a property management company to assist in finding tenants. Does anyone have other recommendations beside RL and Panzera? @Robert Ellis and @Dulcey Barr would you be willing to PM me with your referral too? Thanks!

@Ed W. and RJ. Thank you both for your input and candid assessment. I definitely appreciate the no BS and frank assessment. I am taking a step back to reevaluate my strategy, price point and look for better or alternative financing. 

Our HELOC was only termed for 10 yrs so that was the plan to pay it off within the 10 year time frame. We would also contribute some of our personal income to pay this down sooner. Not a good idea looking back but something we were considering.

February 16 I am looking at trying to readjust my work schedule to be able to attend. If not, I would like to be able to attend in March if you have a date.  I would be happy to share my story of what not to do when looking at a property. I knew the numbers were not working but I was trying to force it to work. 

Robert these are located on Hidden Acres court. Thanks for responding I will send you a PM!  I could use the help. I have a few people saying I can make it work for the long term  but I am not sure with the way numbers are looking. 

@Jay Dewberry thanks for taking a look and for the advice! The numbers are monthly. We are looking at financing our downpayment by using a HELOC, which really hurts our numbers initially because it adds $843 per month to have it paid off in 10 years, otherwise we would cash flow approximately $100 per unit. I think I am forcing some of these numbers to try and work. Like you said I have not factored in expenses such as vacancy, cap ex, and property management. Our thought process has been it will be tight for a few years but if we can then raise rents and possibly have water sub metered it would give us some time to then make the property more profitable.

I have obtained a few insurance quotes, which are coming in under what I initially budgeted for but will verify the water/sewer and garbage. We are working on getting current leases to verify rents. Currently, waiting on home inspection to see actual condition of the units and see if there are any major red flags. I have walked around the units to look at the condition but will need to see the inside.

I’m a newbie at all this but have been doing as much research as I can get into a 24hr period. Any advice, criticism, or just a plain run the hell away from this deal would be appreciated!

Property is 8 Units in 2 buildings. 2BD, 1 1/2 Baths, townhouse style built 1986

Approved for section 8. Currently 50% occupied. 4 units have just been renovated and are ready to rent. Not in a Class D war zone but more blue collar Class C. Property is located at the end of a cul de sac with a school 2 blocks away, surrounding neighborhood with SFH

Our first rental property-strategy is to buy and hold for 20 yrs

Purchase price 405K

Current Rent at 625/unit- potential to be raised to 675.

Commercial Loan

20 yr fixed at 5.2% 1point=324,000 loan

20% downpayment $81,000 financed through HELOC on personal home at 5.63- Rate seems high but to pull maximum potential from home we had to go at higher rate. We are left with approximately 20k for an emergency fund in HELOC

Expenses:

Repairs $250

Insurance $305

Property taxes $1028

Water,Sewer, Garbage $386

Mortgage $2174

HELOC payment $844 (we factored this in to be paid off in 10 years. Starting out we are calculating to only pay interest until property is stabilized. So initially this won't be 844 but we included it for long term)

Property management-self manage

Monthly income with all 8 units renting at $625=$5000

Monthly expenses $4987

NOI $26,243

Monthly cash flow $12.70

Cash on Cash ROI 0.17%

50% rule $325

2% rule =1.21%

I know initially this does not look like a good deal or great investment. I have not included vacancy or cap ex, which is suggested by bigger pockets but we do have emergency funds in place to cover anything big. However, once the HELOC is paid off and if I can boost rents to 675 per unit ASAP, would be an additional $400. All efforts would be made to pay off the HELOC and then the property would cash flow approximately 1200 per month.

Considerations:

We are in the Columbus Ohio market and multifamily homes seem to be going fast. There was an identical property next door that was on the market a few days before it was in contract but fell through due to some buyer financing. There were multiply offers on this property within a few days and will probably go fast. Within 24 hours the property we are considering purchasing already had multiple offers. Our offer came in slightly better and we are in contract waiting for inspection to be completed. My numbers for repair, insurance, water/sewer/garbage come directly from the sellers expense sheet. (I know may not always be that accurate). I have thought about trying to have water submetered to decrease expenses but unsure at this point how much it would cost or if possible.

This is our first rental.

Is there too much risk here?

What am I forgetting or should I include in my numbers not stated above?

Section 8. I have heard good and bad. We are going to be attending the Columbus Metro Housing Authority meeting for landlords this month for more info. Any tips?

Thanks for any input it is greatly appreciated!

@Ed W. Do you have monthly meetings? I would like to attend if so. Thanks!