All Forum Posts by: Seth Williams

Take time to educate yourself like you are doing, and read a ton of books, crush the pod casts and what not, and keep grinding. Save the $ and when you have the opportunity to, buy your first place 4 units or less with FHA low money down, owner occupied and you will be 100% better off than the vast majority of us who started later than you! Go get it brother!

Hey @Kevin Mehner, its a lot of the same to be honest. You can spend time finding absentee owners thru a ton of different systems available, or old fashioned hard work with public records. You also can call around to a few property managers and "interview" them for your portfolio management, but also let them know you are trying to pick up more properties and to send them your way. Lastly, just tell everyone what you are trying to do and dont be shy, the deals will come with consistency. 

@Klaycon Santos - Im a MA guy, we do it in this competitive market all the time. Shoot me an email if you need some help brother. Every house out here has a ton of old house problems, its just the way it is. It doesnt mean you should waive inspection, or it doesnt mean you should get cold feet. if the house makes money, it makes money. DM me, love to help you get started. Also, you can still do an inspection, just your offer isn't contingent on inspection. Worst case, lose your deposit ( prob 1k ) in mass, but, learn a ton. 

Thanks for posting. Its still one of many good KPI's to post. Although, I dont think I hear "i only buy x cap rates" all the time, or ever. lol. Cheers, welcome to BP. 

@Dan K. for sure, this is true around Boston a lot, but not for this building. Great call overall tho. @Tj Hines , that is the plan! Thanks everyone!

@Lien Vuong I feel like its adequate, considering most properties of similar sort around have 3-4 spots tops. And yes, that is what I did haha. I did float back the idea of holding back some money too. Seem like I got enough info from y'all, prob just move a long! 

@Lien Vuong that you! There is a ton of parking here, almost 8 spaces, and a capability to add more in the back, plus regular street parking. I do agree with you though! There is a lot of upside to cut the lower tenants out, and then with them out you could appeal & raise rent. I did this in a different building where a tenant was there for almost 40 years only paying 400/mo, so the other tenants in the building were paying 1000/mo tops because the in building rents were too low. The second she left, I got the 1000 rents to 1500 overnight thru section 8. ( small 1 beds ), so I know its possible to get these rents up with ease. Thanks for the comment! 

@Omar Khan, Thanks for the reply: I get that you can do that with most properties, My point was I was trying to show the gentrification of the town, its up 40 % in the last 4 years. I think they know what the land value is ( lots of development going around it ) and are just trying to get more than they can with tenants. Literally, if it was vacant it would of been sold because a bank would have no problem financing it. A 4 unit down the road recently closed out at $1,050,000, with a rent roll that is about 6k. I gave them my firm offer 18 months ago, and have moved on, but the deal just keeps popping up, and I drive by it every day - so was looking for different takes for what you all see in different markets. 

So for the last 18 months I have been looking at the same piece of property, ill try and bullet the chain of events:

• - Property comes up for sale ( Boston area ) listed at 1.8 million
• - Total rent roll is 10,600 - 5 one beds, all under market value by about 250-400 ea minimum; 3 2 beds, also under market by about 300-400 ea. These are CONSERVATIVE market rents, as I have bed apartments personally im renting for 2100-200, and these are currently at 1550 ea. 
• - Only one heating system, so the bill is insane, almost 8-10k a year
• - water very expensive, not sub metered and a pain to do, tenants won't pay for it anyway, at 8500 / yr
• - Flood zone, needs flood insurance & crazy other insurance, totaling about 10k-11k a year
• - Deferred maintenance - needs roof, deck work, landscaping and some interior work. 
• - No one buys it, it sits, they price drop to 1.6, now they want 1.4, but it is no longer on the market. 

So back when it was on the market, I offered 1.1 , essentially, a bank won't finance this ( in my market I have a 80% LTV lender ) and they want 1.2 DSCR, but this will not cover with their underwriting #'s... 5% prop mgmt, 5% reserves, 5% vacancy, and the info I listed above, and it doesn't cover because the rents stink. All BTW, mostly section 8.

They keep calling me to re-make an offer, but won't take less than 1.4 - im told, and I have not remade my offer. About every 5 months I re-do my analysis and look at how much of a cash cow this could be if you do the work to the property ( light work ) get out some of the cheaper tenants so you can appeal & raise rents thru housing, and get the rent roll to where it should be, add coin op, decrease regular costs and so on. We have the money lined up & ready to go, but I keep looking at it, and can't pull the trigger.

Last point, if you moved this same piece of property 2 miles down the road its prob double the value, and, if you fix the rents, you can force some serious appreciation, around 500-600k. 

What would you do? 

Are you already in contract? What specifically is making them lazy? There are parts of the deal where the real estate professional should be in high communication, busy, working hard... There are also parts of the deal where its a lull. Whats going on? Can you elaborate more? 

Have you tried giving the agent a ton of feedback? At the end of the day, they work for you, and will want you to be happy. Even when I butt heads with clients, I always accept the feedback.