All Forum Posts by: Jonathan Newman

Thanks Mike,
How would you assess the demand for 1br units? I think I could assess the supply by looking at offers to rent, and I'm seeing a few. Definately fewer ads than for 2 and 3 br. Also, except for the large complexes, the ads don't run for more than 2 weeks.

sTiZZiT,
I think that's how it works, with the higher purchase price including the repair contract. It is appealing to have the firm, fixed price, but I would like some more experienced rehabbers to let me know what they think. Could you replace cabinets, bathrooms, windows, flooring and paint for $6,250 in a 750sq ft apt? In my JOB, I have to watch out for underbids, because if it's not possible to do the job for that little, it won't be pretty, whether you have a contract or not!

Thanks for the great idea on creating a bill of materials. That is a good starting point for a sanity check.

What are your thoughts on this deal?

It's got 4 1br/1ba units. Comparable rents in the area are $350-390, some including partial utilities.

Asking price is $29k and it needs "about" $25k in repairs, which can be purchased along with the property.

The repairs include all new entry doors, new PEX plumbing, new vinyl windows, new kitchen cabinets and countertops, electrical upgrades with new fixtures, new toilets, new tubs, new vanities, painting, drywall work, new vinyl tile in kitchens and baths, and new carpet.

The listing says it should rent for $400/month, but I'm not sure I buy that from a sellers agent.

If I finance $55k, 7%, 30yrs, I pay $365/mo. With gross rents of $1400-$1560, the 50% rule puts my NOI at $700-$780. Do partial utilities factor into the 50% operating expenses?

With a $55k purchase price, the 2% rule asks for $1100 gross rent, which this meets.

Second question,
If this were your first rehab, would you consider living in it after rehab as the "property manager"? or would you look for something in a different part of town? This is in "flyover country" Ohio.

Thanks for commenting,
Jonathan

MikeOH, in FL, the eviction is handled through civil court, while the damages are handled in small claims court, for anything under $5000.

AnthonyC,
What a relief to get things taken care of! Why don't you post what happened and what you learned so that maybe someone else can avoid your same headache?

My tenant story started when my previous roommate recommended her cousin as a roommate. I should have seen the flags when her parents dropped her off, paid her deposit, and left. She was fine for a while, but began to fall behind in rent. She paid a little late, but always paid in full before the 15th. Then I came home and found her smoking weed in the back yard. Once she was more than 2 weeks behind, I knew she couldn't afford the place, at least not while she bought and drove a shinier car than mine! Turns out it was her $200 coke habit that was holding her back. I started eviction and learned about the whole "first day of the month following..." thing. Eventually I won eviction, but came home from a business trip to find she'd thrown a wild party, passed out, and her "friends" walked off with all my stuff. So I took her back to court and won a judgement for rent and damages.

What I know now...
1. Screen tenants. Even her cousin was blind to the drug use.
2. Evict immediately. There are no "nice guy" protections for landlords.
3. Be prepared for 2 court cases if you have to evict.

Jonathan