All Forum Posts by: Kelli Van Doren

Hi,
An investor is selling 9 SFH properties in a smaller town (Fulton) about 40 minutes from me in Columbia, MO. We are interested in 4. Two that are selling for 40K (500 per month rent) and and two for 44K (550 per month rent). They are 1940's homes with 4 bedrooms (except one 3 bedroom). Each has had work done inside on bathrooms, floors, water heaters, HVAC.

They are well maintained. They are rented with an excellent property manager in place. The tenants do all yard work, snow removal, pay all utilities and do repairs that are under $100. PITI is 904 a month.

They are so much more affordable than SFH in a comparable part of my town.

Thanks for your thoughts.

Kelli

Thanks for the continued suggestions. I am having 2nd thoughts about the offer and can withdraw it this weekend as they haven't replied yet.

All units are vacant. Another person got a roof quote of 7200. He decided not to make an offer. The kitchens are older cabinets. At least one furnace and water heater look like they could be replaced now. 2 of the AC units look quite old. Many of the units need new carpeting at least in the living room. I would like to put a laminate in instead but haven't priced that yet. There are laundry hookups in each unit.

A unit nearby sold for 180,000 a couple of years ago. At that time rent was listed at 500/month on that one. (They said the rent for this unit was 550 each. And I don't know any details about concessions that were made.)

It also has a large parking lot that would add to the cost of operation.

But it's the best opportunity we've seen in our town that is in a desirable location. And even if I put in 175,000 for purchase price (which would give us 27,000 for improvements) the mortgage is 705 at 30 years. Because it's empty now, it won't do well the first year.

Sorry this is long and thanks for the suggestions and guidance on our first investment.

Kelli

Thanks for the good suggestions. They have talked to the bank. We ended up offering 148,000 and plan to replace the roof right away (hopefully rolling that into the loan).

550/unit is lower medium. I think the previous owner bought too high. He bought with a note from the seller before him for the down payment so I think he was in over his head with no money left for repairs. The location is great and tenants should be the sort that pay on time because of the nice area it is in.

If we get it at 148K, we have the reserves to make the needed repairs.

Buying the note is a new concept to me. I glad to be able to learn from people on this board.

Thanks for your time and ideas.

Kelli

Thanks for taking the time to reply. The manager I talked to is a real estate investor in town. He is a realtor and attorney also. I haven't checked references yet but will before I hire him. I hope to self manage but wanted to see if numbers work with a manager since this is my first property.

The unit is near Columbia Regional hospital so nurses or others connected to the hospital may be interested. Students generally sign 12 month leases in our town. But some of the bigger complexes do offer 9 month leases.

Thanks,

Kelli

Thanks for your advice. Columbia is a tough market so this is a good opportunity. But as you say not the best.

Another investor has offered me a 4plex in the worst part of town for 75,000 with rent per unit of 380. Most property management companies would not go near that property. But one person who owns 4 plexes in the same neighborhood offered to manage it for 7%. He would manage the 175,000 one for 6%.

Thanks,

Kelli

Hi,

I am considering an offer on a 4 plex that is a short sale. Owner has 230,000 in debt. List price is 175,000. There is another offer already so I am to make my highest and best offer. Rent is 550/unit. It is in a good neighborhood.

I used J Scott's Basic Rental Analysis Worksheet and got a cash ROI of 13.88% with an offer of 175,000. Included maintenance, insurance, taxes, lawn care, property management, admin fee, 10% vacancy rate.

What do you recommend for an offer price? The roof probably needs replaced...it is a mansard roof.

Thanks,

Kelli

Thanks for the good advice. I guess the idea was to sell it and the renter being in it was just bonus while waiting to sell. Rich, I liked your line about lips moving.

The house is in St. Louis. I have some prospects here that I'm making some offers on this week...we'll see if any work out.

I was going to ask if it looked like a good deal but I guess you kindly offered that without the question. I am thankful to have a place to "practice" on paper without the money mistakes.

Thanks!

Kelli

Hi,

I am a new investor (haven't done my first deal yet). I met a wholesaler in my town who offered me a 2 bed 1 bath in a city 2 hours away. He's offering me the property for 31,000. He says it will sell for 48,000. It has a renter in it paying $400 a month who is a college student.

What do I need to do to do my due diligence from far away?

Thanks,

Kelli

Thanks for your welcome!

Kelli

Ok, so now I am thinking of another duplex I looked at yesterday. It is newer (6-10 years old) 139,000 list price. Rented for 750 each side. Cash on cash ROI is 13% with a full price offer and paying 12% of rent for management (which I plan to start out doing myself). If I can get it for less, ROI goes up. I was about to make an offer, then my husband asked me to look at police reports. I did and they are 6 to 10 calls to 911 each month. Runaway, disturbance, harrassment, civil matter.

It's a street full of these duplexes.

What do you think?

Thanks for the reminder about college students hard use.

Kelli