All Forum Posts by: Jeff Bosaw

Our water utility in St. Louis does a flat water rate per number of water sources per unit on multi families. It's a bit of a rip-off for the tenants as the flat rate usually costs more than the metered rate of a 3 bedroom home with 2 baths and 4 sinks (2 bath sinks, kitchen sink, and basement sink that never gets used) metered. At least you don't have to install meters though and the bill just gets passed to the tenants and a master copy gets sent to the landlord to make sure there are no delinquencies building up. Now sub-metering electric is probably well worth the investment unless you want to install solar on multifamily.   

@Rafael Ro Have you considered keeping the electric bill in your name and charging the tenant for electricity based on their use? You could give the tenant a 5% discount over the utility company price and then the tenant would essentially be paying for your solar panels over that 10yr payback period. Anything past the payback period is extra profit so essentially 15 or more years depending on the life of the roof. Like others stated it is best to install on brand new roofs. 

My only concern with that device would be if the tenant was smart enough to fiddle with it and claim they used less energy. I guess the app would tell you if the power dropped to zero for a significant period of time. Even with no devices turned on the appliances still have zombie power drain of some sort.

Sorry to bring up an old post.

"Another option is submetering. I'm surprised no one mentioned it. That's what many new large apartment complexes do. A separate company sub-meters all the electrical and bills the tenants directly. There are multiple ways to submeter (including reading the analog meter yourself each month, wirelessly connecting to a separate service, etc.) but it should be less expensive than putting in new meters."

I have been recently looking into doing just the opposite to convert from a split meter back to a single meter with submetering. This is the only way it seems possible to put solar on a multi-family rental property and get paid back by the tenants. It kind of sucks that the utility company won't just let owners put both units into one name or account and charge the tenants for energy used as if you are the utility company midway through the month. It would be much easier if you could earn credits for the second property by providing extra power from solar on just 1 meter. Would be even better if you could use it for another property not even associated with the other place. Example: you own 10 rental properties and put solar on 5 of them. You produce enough power to cover 70% of the power for all 10 properties. Power generation is power generation. Why does the utility copany have to make things so complicated as long as all the accounts are in the same name?

Split metering will likely be cheaper than buying separate power inverters for 2-4 units along with all the paperwork, blue prints, and separate fees for each unit to satisfy the city and electrical contractor company.  

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $150,000
Cash invested: $30,000

Small 3 Bed 2 Bath Home in a nice part of South city. Now using as short term rental before selling or holding longer.

What made you interested in investing in this type of deal?

first home purchase and I liked the area. It was not ideal for long term rental so trying the short term rental approach.

How did you find this deal and how did you negotiate it?

Zillow. Minor negotiating was done with a realtor as the sewer lateral needed repairs and the market was a buyers market still.

How did you finance this deal?

Conventional 30yr loan with 20% down

How did you add value to the deal?

just appreciation and typical maintenance.

What was the outcome?

TBD hoping to sell for over $200,000 and receive $50,000 in appreciation over 7 years. I want to 1031 the sale into another multifamily or a rehab project to buy and hold for rental or short term rentals.

Lessons learned? Challenges?

I wish I had purchased a duplex from the get-go. I also wished I did not buy the nicest house on the block as the neighbors' homes are $30-50K less and makes it harder for new home buyers to see why my home is worth more.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $124,000
Cash invested: $6,500

Shotgun duplex 1B/1.5Bath with a newly rehabbed half building. New flat-top roof on the whole building and new kitchen and HVAC on the side we are living in.

What made you interested in investing in this type of deal?

Ability to use a low down payment loan through the home possible program because FHA would not be approved on this as-is sale.

How did you find this deal and how did you negotiate it?

MLS through redfin. Used a realtor to get an early bid which was accepted.

How did you finance this deal?

Home possible Loan which also removes PMI once 20% is paid off. Paid the down payment with excess savings

How did you add value to the deal?

TBD but hoping to rehab the other unit while living on the other side. May also do short term rental to increase cash flow after moving out. May also try Net metering the electric and go solar. Hopefully, break-even within 5-7 years and start making more money from billing tenants for electricity.

Lessons learned? Challenges?

An older home that was rehabbed very cheaply and having issues with bad planning of electric outlets and not finding studs behind walls that typically have wooden studs. Good for practicing minor electrical work and other cosmetic fixes.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Highly recommend working with Jenny Lee through palmer house realtors. She was quick to answer calls and texts and visited many properties with me until we found the right one about 6 months after starting searching.