All Forum Posts by: Jonathan Bowen

It's not pre-wired, as far as I know, specifically for Comcast but I do believe that it's already got Cat 5 cable running up to the units. My thinking is that Comcast is going to be making tons of money off of the subscriptions and that it'd want to wire this building up for free in order to get those subscribers. Maybe I'm naive?

Comcast wants to charge the owner of a newly rehabilitated eight unit building that I'm listing approximately $35,000 in order for it to connect the building to its cable, internet and telephone services. The building had been vacant for approximately twenty years. Does anybody out there have experience with this type of situation? The fact that Comcast wants to charge even a single penny to connect the building seems ridiculous! Let me know. Thanks.

@Jeff S. I have not budgeted a dollar for a reserve percentage in the income and expense statement but I do think that it's a good idea to list a reserve dollar amount or percentage in the future.

@David Beard As I told Jeff, I have not budgeted anything for a capital reserve dollar amount or percentage in the income and expense statement. I think percentages might work better for real estate participants in different parts of the country because the maintenance and repair costs in Boston at 2% of effective gross income for the building that I'm marketing equals $427 per unit and that seems very low; and that $427 number does not include turnover services which I think you mean to equal broker's fees. The 5% maintenance and repair allowance equals $1,067 and that seems much more inline with what it would cost to do some routine maintenance on a unit. I mean, it would cost about $1,000 in Boston just to paint one of those damned units!

@Shaun Reilly I want to be as accurate as possible but I also have to respect my client's wishes. And yes, I am worried that the stupid numbers that I have put on this pro forma have hurt my reputation. I gave this particular client a pro forma back in March and the final rental numbers are now shaking out to what I thought they'd be. This client had at the time and continues to have another brokerage blowing smoke up his *** in regards to the property's worth so I had to list the property at the other brokerage's number or I had no shot at the listing. And the reason that I have to use a pro forma on this property is because it was a gut rehabilitation that had been vacant for at least twenty years. Bear in mind that I sold this client this property for a song and have sold this client many other properties in the past that are now worth much more then what this client paid for them.

I am currently listing an eight unit building which includes seven residential units and one commercial unit and have provided the seller of that building a pro forma income and expense statement with a 5% of effective gross income allowance for maintenance and repair expenses. The building is a completely rehabilitated brick building from the studs out; it looks really nice and the builder did a top notch job. The seller insists that a 2% of effective gross income allowance for maintenance and repair expenses is accurate because the building is "brand new". As you know, the capitalization rate is paramount and this seller is trying to show that the building's expenses are low. I've done the pro forma income and expense statement the correct way which shows a capitalization rate of 5.8% and I've done the the income and expense statement the incorrect way, for the seller's benefit, and it shows a capitalization rate of 6.85%. The building is overpriced but this seller just doesn't want to see it. I know that the capitalization rate needs to be at or above 7% for this building to sell. I suspect that the seller is woefully ignorant. What are your thoughts on allowances for maintenance and repair expenses on income and expense statements?