All Forum Posts by: Jim P.
Jim P. has started 2 posts and replied 3 times.
Post: Lease that includes utilities - How to protect yourself
- Posts 3
- Votes 1
Hi,
We have one unit of a 6 unit building that shares gas & electric with the building. Never had an issue in the past with a tenant of 10+ years but they recently moved out and we are trying to figure out the best way to add something in the lease just in case someone goes nuts with utilities(tries mining crypto or something that would run up the bill a crazy amount). The building usage should remain fairly consistent.
Not worried about small or medium spikes , just something to protect us if there are hundreds of dollars used that shouldn’t be.
Looked into splitting them and it just isn’t worth it right now.
Would the best way be to just list utilities included upto a certain amount based on historical usage for electric(kwh) & gas(mcf) totals for a year? Average monthly? Not sure the best way since in summer electric will be higher and winter gas.
Would we list those yearly amounts in the lease and just use the last fully occupied year?
Appreciate any help and suggestions.
Post: Best way to sell a 8 unit apartment building?
- Posts 3
- Votes 1
Quote from @Brian Cauldwell:
Hi @Jim P.!
Another thing to think about for an 8-unit apartment building is cash flow. If your goal is to sell, you will have more borrowers be approved if the property is showing great cash flow. So, vacancies, and rents below market rent can affect the loan for potential buyers.
In the DSCR space, most lenders look at current rents and the trailing 12 months to determine cash flow, so if there are vacancies that could hurt the cash flow, which would lower the loan amount, and less people can buy the property. Especially if the goal is to sell it for as much as possible.
Thanks for the information, makes sense. We are in sort of an odd space with it, on one hand we want to move on to some other things and get out of this property but if we remodel these units and place tenants and it doesn't make a ton of sense to sell low or even at all since it's a good property.
Sort of we either sell now or we hold on to it a while.
Post: Best way to sell a 8 unit apartment building?
- Posts 3
- Votes 1
Hi,
We own a 8 unit apartment building in Ohio that we are thinking about possibly selling if the price is right. I am not entirely sure how the market has been headed recently and may not be the best time.
Only reason we are considering it now is because we had a couple long term tenants move out and we will now have a few remodeled units and would be easy to show.
I was going to call several of the larger named real estate agencies in the area and ask for a commercial realtor and go from there.
Curious if there are other areas I should look into? We do not really network with any other local investors.
Thank you