All Forum Posts by: Tyler Smiarowski

Just curious on what other investors do for keeping their books. I am a CPA and do my own books and use QuickBooks. Others?

Below is a link better explaining the co ops. Here in Iowa this actually went to the state supreme court. Hope this helps.

http://thegazette.com/2011/08/02/iowa-supreme-court-rules-for-housing-co-ops/

Andrew

Here in Cedar Rapids the unemployment rate as of July 2013 was 5.1%. I manage my properties myself...doing about half the maintenance and all lawncare, etc so maybe that's while I have it at 5%, also I work full time as a CPA so I guess I stay busy. This particular property will not have any significant capital expenses within the next 8 years. Roof is good for another 10-12...boiler is new as of 2009, etc. Also this property is in a prime location...a few blocks from downtown and surrounded by 3 hospitals etc. I have 16 units as of now and have been fully occupied for the past 4 months. Usually at most I have a unit sit empty for about 2 or 3 weeks at the most. I don't have a "system" but I stay on top of things and probably benefit from a strong local economy.

Paul,

Thanks for asking about the co op. This is something that seems to me to be very popular here in Iowa due to commercial property being taxed at the full assessed amount. I don't hear much about it any where else. Many investors I know when purchasing a multi family that is 3 units or more will either convert the buildings to condo's or co op. Converting to condo's is not as popular due to having to meet local building codes...basically cities now make it very difficult to do so. To co op is just putting the building into a cooperative...I have a lawyer do this and they do all the paper work, etc. The main purpose of this is to reduce property taxes...since you go from a commercial status to a residential status...usually saving around 40% to 50% in taxes.

I did not allocate..they are actual expenses.

$558 property taxes (will be approx. $300 once I co op them)

$114 property insurance

$165 for gas

$30 for common electric

$60 for garbage

$75 for water

$159 for maintenance/vacancy (5%)

Correction. $1239 total debt service per month.

$1123 on the first. $116 on the 2nd. Total of $1339.

195k is what I offered. The appraisal came back from the bank and it came in at 222k. Original offer I made was 175k but owner's bottom dollar was 195k. He has owned it for 43 years and it is in excellent shape..well cared for property.

Here it is:

Purchasing 7plex with 6 garages for 195k. Located in historical district of Cedar Rapids surrounded by mostly commercial property and a brand new medical facility.

Bank is lending 177,600 and I am having the seller carry a 2nd of 17,400 amortized over 20years @ 5% with a 5 year baloon. So I am not putting any money into the deal.

Income:

Rents - $2895 per month

Laundry - $80 per month

Garages - $220 per month

Total Income - $3195 per month

Expenses: Total $2400 which includes $162 per month of maintence factored in.

Net cash flow per month is $795. Current rents are low for the market, easily will be able to increase rents by a total of $250 per month and reduce property taxes from $558 per month to $300 once I co op the properties, which I have done with my other properties. Based on the figures my projected net cash flow would then be $1345.

Just wanted to get some opinions on this. I am closing on this Nov 4th. This will be my 6th multi family property for a total of 23 units.

Thanks, Tyler