All Forum Posts by: Kyle Eckert

@Donald S. good work completing the project. Bad luck with missing some stuff, I am working with the same type of issues with the 4 family I am hoping to BRRRR.

I can recommend a couple decent inspectors if you need them.

Cheers

@Hans M. Maplewood is a very solid neighborhood, with good access to highways, a decent and diverse school district, and a solid Main Street for restaurants.  The multi family stock there is very hard to find, but I would say renting 2-3 bed SFRs would be a good strategy.

@Amanda Barbeau generally in STL it is the norm for the landlord to pay water/sewer/trash. I have heard of a few landlords backcharging tenants for these expenses, so you could consider that.

The appraised value of the property is tied to the purchase price, so it will usually go up significantly after you buy something. I didn’t factor that into my first purchase and my numbers got a lot worse after the tax bill doubled.

in MO an agency contract is required to be on file prior to writing offers. We routinely send over the buyers agency contract with the offer paperwork so they get signed together. It just makes things simpler to do it this way so there is no pressure until we start making offers. 

Welcome to STL real estate investing.  That is a super specific niche you are working in!  Good luck getting started.  Like Greg said above, there is a BP meetup every month, usually the last thursday at Pat's Pub (By Turtle Park), 5-8.  Its a good time and a great, low pressure way to meet people and get yourself situated to make your investment.

@Tom Hamill

Talk to a lawyer, that said:

I have structured deals like this where your ownership percent in the building is based on the percent of the equity you brought to the table for purchase and rehab.  Basically the startup costs.  Anything past that would be considered maintenance costs and would be split depending on the equity split as well.  Cash flow is divided by % equity as well, with everyone getting their fair share on the profits.  When the property is sold, the profit or loss on the building is split the same way.

The "outs" are always tricky and I would talk to a lawyer for proper protection on that front. LLC operating agreements should cover all probable scenarios for exits, new members, etc.

Reach out to discuss further or if I didnt explain it sufficiently.

Cheers.

Summing up what seems like the best path:

1. Find out which properties have the most vacancy or maintenance costs. Divest those, even at a loss to simplify management.

2. Offer strong tenants to purchase the home, finance the purchase for them. Still have income but now maintenance is off the books, and taxes on the sale are spread out.

3. Master lease if interested, seems like a good option to explore for the remainder.

4.  PM whatever doesn’t go in the above.  Take the income hit, but do none of the work.

5. Reassess annually to see if anything in category 4 can/should be moved up to 1-3. 

I own a few rentals in STL and work with out of state investors to get them started here.  My own investments are working very well so far, and rents have organically increased about 10% over the last 2 years.

While helping other investors, you need to be careful to buy right, as a lot of the building stock is quite old and may need major system work, which adds up quickly. However ARVs for fully updated buildings can be surprisingly high, as well as what a nice modern appt will rent for.

Reach out if you want to discuss further. :)

@Amanda Barbeau Hi Amanda, we went to Fox HS together! 

Like Mark said, adding a basic kitchen will run 7-15k depending on finishes and if you have to rerun plumbing. If it needs other work, the math stops working pretty quickly.  That said, duplexes with bigger units are very desirable, especially if the conversion was done well.

@Ralph Noyes I use 25% for maintenance, capex, vacancy, and management, so yours is fairly conservative.  I think you can do better than 11% for property management.

Are you running these numbers with both units paying rent, or are you hoping to cashflow with you living there for “free?”

Dogtown, the Grove, and Shaw are nicer neighborhoods which still have properties to buy around your criteria. Also good access to the universities.

3 weeks is not a long time for finding an investment property.

Feel free to reach out if you want to discuss, contact info is on my profile!