All Forum Posts by: Michael Stutelberg

@Deep Shrestha this is an off market property. The MF is in a town where the owner used to live so it has sentimental value and he wants to sell it to the right person to take care of the property and tenants.

I agree with others on this post to keep in contact with him because he may change his mind over time and realize his price is not close to a deal.

Thanks everyone. I was getting too close to this and wanting to make the deal happen. It is apparent from your comments/insight that I need to look elsewhere until they become motivated.

Hoping for some others insight on this discussion I had with an owner of a MF property that is open to selling. The owner owes nothing in the MF. He is open to selling but is asking at least 50k more than the 0 vacancy NOI/cap rate estimates. Currently the MF is 12% vacant with relatively low turnover.

He is open to a contract for deed, but wants a large down payment and isn’t in a hurry to sell.

Have others had a similar situation and how did you workout an agreement?

@Brett Burky you are correct. I meant to say it is available on the BP website for sale. I will need to look into reading it!

First thing I notice is that it is a very low monthly cashflow. I also did not see the CapEx in the calculation. If that was not accounted for, you will have a negative cashflow. Your COC is also very low at 2%. Is this a FHA loan because I am wondering about the PMI. Can you get the seller the cover all or part of the closing costs?

If this was my deal I would look into ways on trying to get a lower purchase price, raise the rent (can you allow pets and charge an extra monthly fee of $25-35/pet), or get a better COC with a lower down payment (however that will increase your mortgage)?

There are a few BP podcasts you could listen to for ideas on finding/investing in notes.

https://www.biggerpockets.com/blog/2013-07-25-podcast-dave-van-horn-note-investing-private-money

https://www.biggerpockets.com/blog/biggerpockets-podcast-273-an-introduction-to-passive-income-through-real-estate-note-investing-with-dave-van-horn

https://www.biggerpockets.com/blog/bp-podcast-211-investing-out-of-state-rentals-notes-with-bob-malecki

BP also wrote a book on note investing (I have not read it).

https://www.biggerpockets.com/store/real-estate-note-investing-ultimate

I enjoyed using Facebook to advertise my vacancy (for free) they can PM me if they are interested. When showing the rental, have an open house and have any one interested come during that time that way you limit your no shows (wish I had done this).

I really like Cozy for applications/background checks and for rent payments.

@Justine Scheuher check what is in the current lease that the tenants have, what are the state/local laws, are the tenants month to month? Typically it is at least 30 day notice for not renewing or an increase in rent for renewing the lease. 

As for raising rents, typically the lower the percentage of increase in rent, the more likely your tenants will renew.

@Ronald Singleton-Young

Here is a worksheet that BP put together. There is also a youtube video that walks you through this too.

https://www.biggerpockets.com/files/user/brandonatbp/file/analyze-rental-properties---four-square-method-worksheet

Look into a HELOC on your property that is free and clear, then you'd have a line of credit available whenever you need the money for an investment property.