All Forum Posts by: Joe Fairley

If anyone in swfl needs a home elevation contractor. Check out Unified Foundations! We just did a 4k sqft home in Alva and have a couple more 12 ft up in FMB! Also I’m actively looking for a yard and people to partner with in swfl. 

Where is the event located?

Come to the first Beer Wine & Brie. Drinks and food provided! See you Slowpokes Long Point anytime between 5 and 9. Lets create some value. Ask for Wayne's table! Houston

Welcome, Anthony! I recommend going through all of the podcasts—loads of information and strategies. Bigger Pockets will help you become an agent and help you on your path to financial freedom! The best lessons come from action; again, Welcome!

Recalculating with 8% vacancy and an average rent of $500 less per unit with all other percentage numbers remaining same. This is how it turned out.

Is it worth investing $3 Million in this property?

Thanks all for helping me.

$4,299,709 = 236484/0.055

16 Units @ $2500 Per Unit = $40,000/month

-$3333 Insurance/month (40k per year)

-$3600 Property Taxes/month

-$400 Landscaping

-$500 Dumpster Service

-$4800 Property Management Fee (based on rents of 3k per unit)

-$3820 8% Vacancy (based on rents of 3k per unit)

-$1440 3% (based on rents of 3k per unit) Capital Expenditures

-$2400 5% Maintenance (based on rents of 3k per unit)

($20,293 Total Expenses)

=$19,707 Per Month or $236,484 Per Year

@Brad Hayden Thanks for spending more time looking at this potential deal. This property is my next development on the gulf coast, and therefore it is not built/or occupied. The monthly rent is an average of surrounding market data I have found from listings and rentometer. The land is no longer for sale. I am questioning the value because this is my first effort in Multifamily. I have observed that this is an underserved market, and there is a housing shortage across all classes. Suppose I can build these 16 units for 2.4 Million at around 150K per unit. Again that is builder cost, not client cost. Is this still a good idea?

@Mike Smith Thank you for your input. I'm trying to develop my most conservative figures, and I'll adjust my value to reflect an 8% vacancy. Thank you for your information. The Sales price vs. projections is reasonable because I am the builder. 

@Alex HuntThanks for your time. I don't understand DSCR calculations yet. From what you are saying, this sounds like a good deal. I would love to spend some time studying what these numbers imply.

@John Vo , The area of Galveston County I am looking at has about 30% higher rents than the island. This property is not in Galveston City.

All input is appreciated. I'll revise my numbers with higher vacancies and posts. Please keep critiquing. 

Thanks again,

Joseph 

Brad, thank you for taking the time to respond. The tenants would be on an annual lease. The property consists of 2/2s and 3/2s. The building is new I didn't even think about maintenance and repairs. I suppose I should set aside 5% for maintenance and repairs in addition to the 3% for CapEx. I checked with the county and local muni about tax rates and the tax rates are about +/- 20%, 36K per year. I then compared those against similar properties in the area. The rebuild value would be under $4 Million and based on a 1% rate, the insurance could be up to $40,000.

Recalculating with 5% maintenance, the top tax rate, and a 1% insurance rate....

$6,564,436 = 361044/0.055

16 Units @ $3000 Per Unit = $48,000/month

-$3333 Insurance/month (40k per year)

-$3600 Property Taxes/month

-$400 Landscaping

-$500 Dumpster Service

-$4800 Property Management Fee

-$1440 3% Vacancy

-$1440 3% Capital Expenditures

-$2400 5% Maintenance 

($17,913 Total Expenses)

=$30,087 Per Month or $361,044 Per Year

Is there anything else I'm missing or overlooking? 

Am I missing something?

Commercial Property Valuation = NOI (Net Operating Income)/ Cap Rate (5.5%)

$7,291,636=401040/0.055

If I could acquire this brand new construction for less than $3 Million, is it worth it? and is it really worth 7.3 Million?

16 Units @ $3000 Per Unit = $48,000/month

-$3000 Insurance

-$3000 Property Taxes

-$400 Landscaping

-$500 Dumpster Service

-$4800 Property Management Fee

-$1440 3% Vacancy

-$1440 3% Capital Expenditures

($14,580 Total Expenses)

=$33,420 Per Month or $401,040 Per Year

I'm a builder in the Houston market and could potentially have this opportunity. Any comments, questions, or banter is much appreciated. 

Thanks,

Joseph

@Shane Freeman I recently just moved to Hattiesburg to be closer to my investment market. If you would like to connect I could help you with the due diligence.

@Prescott Williams Great job! I just bought a house in historic downtown Hattiesburg! It's a beautiful area with lots of investment opportunities. If you ever want want to connect and talk real estate let me know.