All Forum Posts by: Kim H.

"it's probably the largest I can get with the best rents in the Dallas area for now"

I should rephrase that to ... the largest and best rents in the North Dallas area... I don't feel comfortable buying in an area I am not familiar with or would have to drive more than 30 minutes to access.

And I may be able to rent them as is with very little updating if I try. I do need to do some foundation work first on a few though.

@Joe Fairless I have maintenance at 15% plus a 10% capital expense budget. I am really hoping to do a lot of preventative maintenance in my rehab, so hopefully the costs won't inch up too much but it's definitely a possibility being that the property was built in the 50s. It was completely overhauled in the 90s with new electrical and plumbing so keeping my fingers crossed for the best.

@Joel Owens this is the size of property that I feel comfortable with for my first investment. It's 15 minutes from my home in an area that I know very well and feel confident about the market conditions. I don't want debt so it's probably the largest I can get with the best rents in the Dallas area for now.

@Sylvia B. you are correct, the stairs are narrow and have sharp turn. That's the other part of my dilemma. I am considering opening up the walls on one side of the stairs and adding railing. At least then they wouldn't feel so narrow and tenants could lift furniture over the rails if necessary.

To be honest, it's been a month or so since I have been in the units and I am having a hard time picturing in my mind what my options are. I am hoping that one will be vacant in the next week or so and I can get in with a few contractors for ideas ... and most importantly costs!

I have a pretty strict budget for all 9 units so it may be that it is cost prohibitive to do anything but slap some new carpet down on the stairs and in the upstairs bedrooms and wait a few years before I change the layout. I have spoken with one contractor on the phone who really put me in my place about 9 units (around 8100 sq ft total) probably costing $200K to rehab "correctly" (obviously he is not on my short list). But, I am not holding my breath that I will do anything more than paint, floors and fixtures and repair the deferred maintenance items to start getting tenants in place.

@Sylvia B. thanks for checking. I haven't closed on the property yet and still haven't decided exactly what I am going to do with them. I am leaning toward the option of converting one of the units to a 2/2 and making a really nice finish out to see what happens. If I could get the rent on a one bedroom, I would close off the upstairs and rent it that way.

Good point @David Krulac I guess I need to check the laws in Texas. So much red tape for everything :)

Great idea @Roy N. I didn't think about that. I think there is another issue also that there is a master shut off and not individual shut offs for the units. I kind of dropped the idea because of electricity but now I am talk with a plumber to see about adding shut off valves. This is kind of a quirky complex so who knows if that's possible but I won't give up yet.

I was wrong about Guardian. I must have called another company that wouldn't do less than 100 units. After talking to a sales rep, I was really excited about how in expensively (compared to $8000 per meter) I could do sub metering. Only one catch though...I don't have any common electricity areas to put the reader. @Jeff Greenberg they didn't offer up a solution without electricity but I am going to keep trying. Right now RUBS seems to be my only option.

I say "prediction" because the property will be completely vacant when I take possession.

After lots of research and time looking at costs for updating (and negotiating with the seller to make some repairs), these are the numbers I have finalized on my 9 unit MF purchase, which is closing in March. These are 5 attached 3 bedroom townhomes and 4 individual SF homes all on 1 acre of land.

Please let me know if I am forgetting anything.

Rent: $8,875.00

Units: 9

Maintenance $1,331.25

Vacancy $443.75

Property Manager $621.25

Insurance $484.47

Utilities $150 (calculated at 85% recapture on RUBS for water, gas and electric metered separately)

Landscaping $300.00

Advertising $73.96

Ongoing Capital Expenses $887.50

Taxes $702.63

Purchase Price $385,000.00

Rehab $78,100.00

Holding Fees $17,750.00 (2 months rehab, some will rent sooner)

Closing Costs $3,500.00

Cash out of Pocket $484,350.00

Additional ideas for extra income:

Pet Rent - $10 per month per pet (the property has a huge green space for pets that I may actually fence in as a "dog park")

Appliance Rental - $25 per month for w/d, $15 per month for refrigerator (I actually ran across this idea looking for my son an apartment recently)

Property also has a big playground that I may remove -- not sure yet.

Please let me know if there are other expenses that I am not calculating (hopefully they are small :))

@Micki M. I have given the "executive suite" concept some thought as well. However, I think I would need to add internet to my expenses. And, with it being a rural, small town, I am not sure what the demand would be. But I will figure something out. Hoping to give it a month or two with my big "owner financing available" sign out front and see what happens.