All Forum Posts by: Levi T.

I always run it as 100% financed, easy numbers to work with, and safer. Things I look at when doing deals: 1. At a glance; I want to figure out the gross cap. This at least lets me know if the income to property cost is right. If this don't work out, it's not worth learn more and I turn down the deal. 2. If gross cap is good. I dive into the net cap to insure it is cash flowing. Lots of times this is where bad management has run the rental into the ground. Don't expect to unload utilities or basic operations cost, however late pays, evictions, and run down units are easy to fix. 3. Finally LTV/Market value at closing without improvements. Leave plenty on the plate to insure you can get out if something goes sideways, plus that's your bonus profit after cash flow. Buy and hold is like a slow flip, you want to earn at a higher rate than you can get on the stock market, then kick it the bonus earnings on exit. *via my iPhone

Little before and after pics, with numbers; we are working our way through 50 some units, this is a batch of 24 of them. These houses where owned by the Housing Coalition, and they wanted out.

We had units covered in human feces, people living in spaces with drywall missing with food and beer bottles stuffed in them. Contractors gave units nick names, like "The Crack House". Some units smelled so bad you just wanted to burn them, and move on, but it was all cometic. Nothing a good cleaning crew, carpet, paint, and new appliances can't fix.

Purchase price worked out to about $75,625.00 per unit for this set, we have two sets, with appraisal averaging in at $95k per unit at the time of buying, we are spending about $8k per unit for upgrades, and expect to sell each unit for $120k in a few years, which would net about $1,065,000.00 just for this set, and an additional NOI on rents for about $248,000.00 a year. In all, we will net somewhere around $2,700,000.00 time we hit our exit date, give or take a few hundred thousand for unexpected issues.

I keep some of the photos to a minimum for the forums sake. 

Before:

After:

Property managers are hardly worth their value with today's technology. They will normally charge 8%-10% of rents each month. Some love to use the $100 a unit model, rents or no rents. They then get 50%-100% first months rent on new leases, and $200 or 50% of one months rent on renewals. They also set a budget of $100-$300 for repairs without calling you, after that they defer everything to you, everything. I've used manages off and on over the years in many cities, most ran the operation into the ground, or lined their pocket with fees from the tenant. I've done the math over and over, they are getting 13%-20% in most cases with all the fees they pickup off you, or the tenants. Another option is to use something like Appfolio, and a call center (they offer this as well), then enforce online payments, and using the call center for all repair request. After that you auto route request to vendors to contact the tenant to schedule a repair. You will work just as much as you did with a manager, at 40% discount of what it cost you before. Most managers are doing the above most likely already with software and call centers so they can focus on real estate sales, or signing new leases as that's the big money makers after fees. It's around $400mo for 200 or less units on Appfolio with the call center, otherwise it's just $200. To show units; pay an agent just to put a tenant in for you, nothing more. Permanently leave a lockbox on the front door. Easy peasy! Best,

Ive found if it's already in the rents, it's in the rents for a reason. Likely they have to include it to compete. Every time I have attempted to breakout something like utilities, I've ended up having to fold on that idea. At this stage I never assume I can breakout services or raise rents when buying units.

Solid advice from Edward B. My first rental was a townhouse, long before I did a SFH or complex. Now I buy them in blocks... neighborhoods worth. They are like prepackaged buttery deals of ROI goodness, love'm. I have some on the edge of hell, and others in middle/upper class regions in norther Virginia. Townhouse reflect the market more quickly, I've seen rents climb by hundreds of dollars in a summer, long before the SFH and apartments started to move up. They can go downhill just as fast if you pick the wrong location, but in my experience, we can't rent them fast enough. Best,

Grab a flight out there, never ever buy property unseen, then call up some handymen or hire a inspector, and have them view the property. Everyone I've worked with can handle viewing properties, scheduling with tenants, etc. when I get a new property I just ask the contractor to go out and give me a quote for repairs, maybe even list some items that I want done. They will email me back with an estimate and items they think need fixed. You just have to cherrypick the work you want done, and go from there, the cost is normally free in my area, but not in other cities, however it's never cost me more than $95 for a service call. Not all contractors are the same, prices are all over the place, as well as the quality of work. Your really need boots on the ground that you can trust, or you could be pouring your cash into a money pit from hell due to not know the area or if contractors are delivering the quality expected. Good luck!

Welcome, if you ever want to grab some lunch and pick my brain just give me a shout. I do deals from Richmond all the way to DC.

I don't know Wisconsin law, but in Virginia what I normally do is terminate the lease after closing, as its my right. That way you're not dealing with the unlawful detainer due to failure on the tenant to pay rent, but instead the tenant leases ended and needs to move out. That way it's a open and close case down at the court as you clearly don't want to keep that type of tenant.

Lisa Rankin you basing that on his flip or rehab repair cost? Gross cap is 17.4 if he goes the rent route at 85k and 15k in repairs.

We all know our own cities; what' are good locations and what are bad, or edge of hell, as well what is prime to improve in a short number of years. I'm interested in hearing any models others are using to identify properties in other cities. For example I know most properties a few blocks from college, or close to a military base are solid indicators if the numbers work, but what else. All major operations use some type of model that's a lot more complex, for example, Walmart or Sheetz gas station have some type of population and traffic to housing location model that works. Thanks in advanced. Type on my phone.