All Forum Posts by: Michael Henry

I was considering doing something very similar but in your situation there is not enough meat on the bone for this to work. $140/mo before expenses is not a profitable endeavor. Even with the equity build up you would loose all of that when you sell after paying realitor commissions 

@Gerald Gardere

I live out of state and the property is in a small town outside of Atlanta not an ideal market for AirBNB. I’ve suggested other options to the property manager like short term leases for traveling nurses at a higher rate since there are several hospitals within 2-3 miles.

@Christopher B.

Thanks for the responses property manager has stated these were bad tenants that I assumed from the previous owner. At this point there is one unit left that is about to be filled with a new tenant. From this point everyone is new and on a yearly lease. (Some were on month to month previously)

@Cole Simpson I put down 20% - $30,500

@Cole Simpson I could realistically sell for $165-170k which would net me approx $40k

@Gerald Gardere

I have found lenders since that time but with Commerical financing the rate drop is minimal (around 5.5 - 5.65%) doesn’t seem worth it when rolling in the additional fees into the loan.

Rents are at market rate and the units have been brought up to date from where there were previously.

For Context - I understand real estate is a long term deal but, after holding a property for 1.5 years I feel as if the performance is lack luster and have considered selling off the property in pursuit of something larger and more profitable.  

This is a 4plex which was purchased June 2019 

Purchase Price: $152,500 (20% Down - 30yr Commercial Loan @ 6.5%)

Appraised Value: $182,000

Rents: $1,750 

PITI: $1,099

Everything checked out, the building was fully occupied, I purchased with an instant $30K equity, and the property met the 1% rule. The first thing I did was hire the top rated property manager in town since the previous owner had self managed.I was in process of a refinance pre COVID but that severally delayed the process and I was unable to complete, I also struggled to find a bank which would refinance and keep the property in my LLC.

From a pure cash flow prospective, its hit or miss in terms of profitability. There has been higher than normal turn over all but 1 tenant have moved at some point. Maintenance has been high (A/C issues, appliance issues, etc). Rents have been stagnant. All my other properties have performed much better so im wondering how long does it take to see real gains from a property like this or is it best to just cut my losses sell for market price and invest in another property?  

Ive attached my financials with the address blacked out for YE2020

@JC Leach

Personally I would as long as you have a plan in place to replenish your savings and low / interest free credit lines to cover you in the short term for emergencies.

@Carrie Smith I see your located in Palm Bay, I am as well I always secure funds first with a hard money lender. They should be able to give you a approval letter without having a contract in place.