All Forum Posts by: Kurt Winsley

Greetings all,

I recently closed a deal on my first multi-family apartment complex (18 townhouse, 1 single family). I have a resident manager in place from the former owner that I'm inclined to leave in place as he seems to be doing a great job. When I met with him for the first time as owner, he brought up a request to me that he had spoken to the previous owner about and was denied. His request was that we put in a playset of some kind for the children in the community. There are a number of children in the community (some of whom are related to the manager) and he wants to give them a convenient, safe place to play.

The former owner had denied it on the basis of insurance, but when we (the former owner and I) were discussing it yesterday, he mentioned that the insurance agent had been cautious about it, but not killed the idea completely. He hadn't felt comfortable with it, so he said no. Because of the way the deal is structured we are still under the insurance policy that he had in place (his is much less than we can currently insure the structure for).

The manager has offered to put the set in his backyard (he lives in the single family home) so it can be monitored easily.

What advice would you give me in this situation? I'm wondering if we'd be safe enough if he monitored it closely and we restricted it to residents and their guests only? I still need to check with the lawyer, but I'm wondering about posting signs that say something about resident and guest use only, etc... Maybe putting up a simple one that would be better than nothing, but not nice enough to attract the neighborhood kids??

Thanks!

Kurt

Originally posted by @Zach Schwarzmiller:

@Kurt Winsley thank you! I actually did the other side in PEX and I am happier with that. I used the crimpers instead of shark bite and I think overall it feels more sturdy. I want to build a cabin myself and after trying all these different types of plumbing on the rentals I think I may go with continuous sleeved poly into PEX. I have CPVC on two triplexes build in 1998 all units are townhouse so three bathrooms and every so often it does indeed give me some trouble. I took those issues into consideration on that PVC and made sure there was nothing under pressure that could be upset over time! One year ago I could barley hook up a kitchen sink. 8 water lines later I think I'm starting to understand a little about plumbing - hahah!

Excellent! Pex is our waterline of choice and has been for a while. It is a little harder to get it looking neat, but so much easier to work with in general. Congratulations on your success in improving your skills! Keep learning!

One other issue you may run into is that most places don't like to see schedule 40 PVC used as a potable water supply. The only PVC product that most codes approve for potable waterline is CPVC (the off-white stuff). We don't use it because if it does freeze, it will crack and as it gets older, it gets more and more brittle. If you get inspected, you may have a fine to pay. In our area, we usually run the black waterline into the house (underground, as we are susceptible to freezing here) and transition to a shutoff once we are in the house. We are required to sleeve it with a piece of PVC or an actual sleeve where it penetrates the foundation.

Picky details like codes aside, you did a good job keeping it neat! Hope it works out well for you. Leaks are no fun to deal with, that's for sure.

How big is the gap? It is rather hard to visualize from just the closeups. Do you have a pic that is taken a little ways farther back so we can see the "big picture"?

If it isn't too big, you'll have better luck using a good caulk that will stretch a bit rather than packing drywall compound in it. The product "Big Stretch" comes to mind. You may be able to find a construction adhesive (make sure it is compatible with the plastic tub wall) that you could squeeze in the joint and then brace it with something to hold it against the wall until the glue sets. Alternately, if you have something solid behind it like a stud behind the drywall, you could predrill a couple holes and use a cabinet screw (exterior grade, we use GRK from Home Depot) to gently pull it back against the wall. Key word is "gently", you don't want to crack the shower. Then you may be able to cover it with a piece of trim or whatever if you don't like the looks of the screws.

Hopefully this helps...

I agree with Justin, the drain sounds like it is plugged, but I question why two HVAC techs missed it. That's a fairly basic thing to check. 

Freezing up usually points to a couple issues: 1) dirty filter on the indoor or outdoor unit so it doesn't get the airflow it needs to transfer the heat or 2) low refrigerant. Again, that's basic stuff that an HVAC tech should have checked.

We have had success with Kilz, removing the carpet and any other fabric such as curtains. The ozone generator sounds great, but in our experience with turning rentals, we still have to do a lot of scrubbing before we paint due to the tar/nicotine. We usually use TSP to clean because we are painting and that helps prep the surface well. Flat painted / textured ceilings get Original Kilz Oil since they can't be scrubbed easily. It comes with a heavy odor of its own, but seems to go away fairly quickly. We have used the shellac/varnish approach fairly successfully with pet odors on concrete floors too.

In your case, with the house already painted, if you can find the ozone generator, I'd give that a shot...

Kurt

Hi all,

Still a newbie on the forums, but working hard at getting into investing...we are currently working on our first multi-family deal and I wanted to get some thoughts on how it looks to you more experienced investors:

We currently have this under contract at $595,000.

1. One three bedroom single family home (currently the on-site manager's residence)

2. 18 - 2/1 town-home style units with electric heat, washer dryer hookup, tenant-provided window A/C units. Electric is metered individually, water/sewer is master-metered. Set up as three units per building, six buildings total.

Currently 100% occupied, town-homes are $490-500/mo. House is $700/mo and manager receives $400/mo to manage. He does most maintenance, keeps the place in order and fills vacancies. Current manager has been there since around Dec 2014.

The units are in good shape physically, there are a few minor maintenance issues that I noted on my walkthrough, but overall not bad.

Average income for the last 5 years was not as high as would have been expected, running about $75k avg, with expenses $73k. Compared to the 44 units we have in the family portfolio, this seems like a dismal return that doesn't make sense unless it was not managed well and vacancies were way too high. Currently, they are reporting 50k for this year so far, so it is on a much better track income-wise since the new manager came on board. I don't have expense info for this year, however. The bank is not excited about this deal considering the previous track record of income.

Are we missing anything on this deal? When I run the numbers on some of the investment worksheets I found through the forum, I have a 9% CAP rate and a 14% cash on cash.

Thanks for the help!

Kurt Winsley

Welcome Tim!

Just starting out with my first deal. I'm working with my father in law who has been doing this for years. House is under contract, waiting for close. House is a SF 2/1 right now, plan is to add a full bath downstairs, which allows us to add a master bedroom downstairs, making a 3/2. Our game plan 1 is buy and hold because that's what we know best ( FIL has 44 units). Alternate plan is flip, but it is a distant second. I'll check in periodically, especially when questions come up. Kurt

@Emmanuel Jr welcome to BP! I'm new here too, looking to learn as much as I can. I'm just down the road in New Concord, about an hour+ east of Columbus. 

Kurt Winsley