All Forum Posts by: Justin S.

. The maintenance budget is eating this place alive. This is the number that makes the least sense now that I look back. For 10k/year the place should be in amazing shape with a cleaning crew and landscapers. Is it?

That's why I'm suspicious of all the other numbers. Is that $10K just maintenance, or is capex as well? Does it include gardeners and snow removal and parkling lot maintenance? Public area cleaning and maintenance? I just don't buy that the landlord with long term tenants at $650/month is maintaining it to that degree.

That is my miscommunication. That 10k is me taking 15% out for main/vacancy and with 2% supposed vacancy its 13% main.

Their main numbers were $4400

As for the rents being low.... she is about 80yrs old and has owned it since day one

it was built in 1972

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Originally posted by @Account Closed:

Originally posted by @Ryan Pemberton:

@Aaron Montague and

@Account Closed both pose excellent points and questions.

At first glance, the asking price seems on par (maybe a little high) if the building was in excellent condition and the rents were where they're supposed to be...but neither of those things are true.

You can use her undervalued rents as leverage in negotiation. Base all of your numbers on what she's currently getting..not on what they "might" be if they were at market.

Definitely double-check those water bills and vacancy numbers.

Good luck with it. Let us know what you learn and offer!-Ryan

Honestly, what are the chances of a self-managed low rent 10 unit building in Buffalo being in even fair condition? What are the chances that rents and expenses are being accurately reported? I would use the entire situation as "leverage in negotiations". :)

I will definitely use that to my advantage come negotiation time. That's what Im looking for here is what most people would pay for it. I know $630k is definitely overpriced.

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Originally posted by @Account Closed:

Curious about the vacancy number. Where did you get that? Is it projected or actual data from the seller? A 10 unit building has 120 months of possible vacancy/no rental income in a year. 2% is less than 2.4 months......out of 120. Seems very unlikely in a low rent MF.

Is the water bill really less than $20 per unit per month? What about trash removal? Is it part of the water bill? What are the utilities billed for the common spaces and the laundry area? Do all at the units have separate metered gas and elec.? Any local muni requirements for registration and/or inspections?

Again, where did you get these numbers? They look very vague and uncalculated/undocumented. Are current rents documented? Are all the units rented today?

Thanks for responding.

I thought so too on the vacancy. Could be because of low rents.

numbers come from owner/agent.

$20-30/unit isn't odd for this area though.

Common area utilities:

Gas-$28/mo

Electric-$60/mo

All separate meters

Trash is included in taxes

No registrations in this area

$630k is definitely overpriced but a 6 unit all 2bedrooms a half a mile down the road went for $405k in June 15'. It is 80yrs older and not brick

any thoughts would be greatly appreciated

Thank You

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Originally posted by @Aaron Montague:

@Justin S.

You need to define 2 things first:

1. Your required ROI on YOUR money

2. How much profit do you need to see each month for this to be worth your time and effort?

My advice:

Never look at "potential rents." They aren't going to do you any good just after you buy the place. Find out if the place is worth buying now, or get it empty so you can do all the work you need and then put higher paying tenants in place.

Your water number looks REALLY low for a 10 unit building. Have the city send you 2-3 years worth of bills to double check that.

Vacancy looks low as well. I like to use 8.1%. 8.1 represents 1 vacancy per unit per year.

Bring all of those numbers back here and I'll write up my evaluation and tell you what I would pay for the place.

Happy House Hunting!!

1. My required ROI is actually not at play here because I will be pulling all of the down payment and closing cost out of equity of other properties.

2. Whenever it is a turnkey property, if I can make $100-125/unit per month then I am good

This is a B+ area. It is 100% occupied

The 2% vacancy comes from the Owners agent. He said it is from the past 2yrs(probably because rent is so low)

The water is actually $2040 $20-30/mo per unit is pretty common in my area.

There was a 6 unit a half mile down the road that sold in June for 405k(67k/unit).

It is 80 yrs older than this one and not brick.

I would love to see your evaluation

Thank You

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Any thoughts on the numbers here please let me know. Rents are very low. A widow has owned an managed it herself for 10yrs and hasn't raised the rents in about 5yrs.

Ok here is the deal:

All brick 11,100 sq ft 10 unit

10- 2 bedrooms

$630k asking price

Taxes-17.5k

ins- 3k

maint-10k

water-2k

Vacancy avg(5yrs) 2%

Income:

Rents-76,600

Potential rents(market value)-84,000-87,000

Laundry-2,000

Deferred main:

roof in the next 5 yrs(aprx 25-30k)

Thanks

Justin

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I'm looking to hook up with wholesalers in the Buffalo,NY area. I am growing my portfolio of MFs and would like to purchase 6-10 units minimum by years end.

Please get back to me to discuss my preferred areas and properties.

Thanks

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I guess my biggest fear with this property is the age. Do any of you not buy houses because of the age?

Does anyone have experience with older homes? Am I worrying too much?

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Great point John! I definitely want more than 90k

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That's what I was thinking on the kilz.

AVR would be 135-145k

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I'm negotiating a 3unit all 3 bedrooms built in 1840 and needs a lot of work and just had a skunk get in and sprayed in one of the units. I'm going to do a construction loan at 5.2%. Any suggestions on removing the skunk smell? Any advice on buying much older homes?

Good deal or stay away?

Here are the details of the deal:

purchase price-$45,000

rehab costs- $60,000

Gross rents- $2,100/mo

taxes- $3,500

ins- $1,000

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All Forum Posts by: Justin S.

Justin S. has started 17 posts and replied 67 times.

Post: what to offer on a 10 unit

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Post: Looking for a wholesaler in Buffalo,NY area

Post: Old 3Unit and looking for advice

Post: How do I set a realistic goal to retire on rental income?

Post: Old 3Unit and looking for advice

Post: Old 3Unit and looking for advice