All Forum Posts by: Michael Bracewell

Investment Info:

Single-family residence buy & hold investment in Milledgeville.

Purchase price: $60,000
Cash invested: $65,000
Sale price: $108,000

Completed my first seller financing deal, with the only tenants who have ever rented this property from me. Never imagined being on this side of an owner financing deal at this stage in my investment career, but the numbers made great sense and I will be able to make a great passive return over the next twelve years.

Investment Info:

Single-family residence fix & flip investment in Milledgeville.

Purchase price: $130,000
Cash invested: $35,000

My primary residence was bought in 2017 as first-time home buyers and over the last few years we have done small cosmetic fixes as we worked on our other careers. In the last few months we have really ramped up our remodel in hopes of finishing early this year and building a nice new primary residence for my growing family. This project has taught us many valuable lessons that will help us build our portfolio going forward.

Good morning, depending on how your numbers check out I think this could be a good first investment. A better class of neighborhood and updated home will typically bring a better class of tenant that you can learn and get experience as a landlord. Will you be self managing or hire a 3rd party company? Also are you looking for cash flow or appreciation? I don’t know anything about your market but if you have the money then it sounds like a great first property to get your feet wet and figure out what changes you would make going forward for your next investment. Another possible way to evaluate this deal would be to take your cash investment out and run your numbers or with a minimum down payment to see if it would still cash flow close to what you want. In my market, I typically estimate expenses and cap X to run around 45% of the target rent plus mortgage payment. Then I subtract from lowest possible rent I think I may be able to get and see if I get my minimum pure cash flow return. Hope this helps and if you would like to talk or network further please let me know! Happy New Year!

Happy holidays!

As many will say the first deal is the hardest to pull the trigger on. The unknowns and many outsiders who do not understand what you are trying to accomplish. I also currently work a full time job with my pest control business but I know real estate is a passion that I wanted to start to allow the ideal life for my family and also leave a legacy for my kids. With my first deal, I was told by several family members of what could go wrong, but thankfully I did not listen and got in the game! Honestly, it has taught me so much and I am looking forward to continuing to grow my portfolio and network! Good luck

Good evening everyone, I like most of you I’m sure are putting together a goal and plan of action to grow my portfolio in the new year. Currently, I have one single family home that I have been managing myself for the past almost 2 years while I was growing my pest control business. As I grow my portfolio  I have begun to think about the next step in hiring property management or potentially working to establish a team that can manage my future properties and systems the way I want them done. I’m interested in how everyone has handled growing there portfolio and outsourcing to 3rd party management, self management, or creating a team centered around your units. What are some of the pros and cons you have dealt with? I am not against hiring an outside company, but I have also dealt with some small managers in my pest control business that I could hardly see the value they provided to the property owners. Any feedback or personal experience is greatly appreciated!

@Caroline Gerardo

Thank you very much for your input and numbers to work with to underwrite this deal. This apartment building is in the old central state hospital area of Milledgeville Ga which from the early 1900s-1980s was the main source of employment for many people in the central ga area, but when private institutions became more popular it shut down and has been left empty for them most part until the last couple of years. The local colleges as well as city council are trying to work with developers to revitalize some of the buildings for multi use and residential. They are in the very early stages and have only fixed a couple of the buildings so there is a lot of unknown, but at the same point could be an opportunity to be in on the ground floor if the development does happen over the next 5-10 years. That is probably something I should do a little more research on to see exactly where they are in the process and if it is on a positive climb or staying exactly where it is now.

@Tyrone Dennis

I really appreciate the feed back! For my other property I run property management myself, but with this property their is currently a resident manager who collects rent, cuts grass, lists vacancies, and takes maintenance requests and then relays the message to owner. Not saying that is a high tech system for the current owner but also seems to run very smoothly and economical from an outside perspective.

I would say rents in todays market could go to $500 a month over time which would raise monthly revenue to $4,500.00

As far as big repairs left to be completed, I would definitely have to check the age of the roof, hvac, etc. as I am not sure to there age. 

@Caroline Gerardo 

No, I own my own pest control business and have handled the extermination services for the landlords since they bought the property in 2019.

The units are 1 bed 1 bath approximately 400  square feet

They currently get $450 per unit but when the acquired the property rent was around $375 to $400. all units currently  rented and some tenants have been there for 10 plus years 

Current landlords have updated 7 of 9 units with new floors and appliances and were ready to update the other 2, but tenants in those units did not want there unit renovated and were find paying the increased rent. 

I have equity in my other properties that would allow me access to around $100,000- $130,000. They are listing it for $535,000 which seems a little high to me considering it is probably a “C” neighborhood. Creative financing might be a possibility considering I have a personal relationship with the owners and realtor. 

Honestly, I have never looked seriously into a larger multi family  property and having them as clients in my separate business I know it can be a slippery slope to not ruin a good business relationship in my other business if it is a deal not worth pursuing. 

Good evening everyone, 

I hope everyone is having a great holiday season. When it comes to economies of scale I have always been interested in the multi family space of real estate, but like most I have only had experience in single family residence/ investment properties space.  My goal for 2022 was going to be to buy four units in some shape or fashion maybe small multi family and single family residence with one property being designed to pay off in 15 years for my daughter to pay for college or start a business etc. I recently just came across a 9 unit apartment building that customers of mine in the pest control building are looking to sell. I believe they own it free and clear and are looking to sell to move to the beach for retirement. 

My question is, how should I go about evaluating and underwriting the deal? As well as questions to ask to make sure I am making the best decision possible or stick with my current plan to by smaller multi family 2-4 units now and then scaling to 9 plus in future years?

Any advice is greatly appreciated and again Happy Holidays!

@Scott Couch

Thank you for taking the time to respond. As of now they are over priced, but due to days on market it is starting to creep down to more realistic numbers. I have a number I would be comfortable paying for the property, but if the owner were to owner finance over a fifteen year span they would roughly make what they wanted before plus I would not have to put down nearly as big a chunk of money and could use the available resources to look for my next deal where my capital may be better served as far as growing my portfolio. I guess I look at it as owner financing could potentially be a win win for both the seller and myself in the long run if he is willing to get his return on investment in payments versus one lump sum.