All Forum Posts by: Michael Shea

Until just before they keep you awake at night?

Guess it depends on the nature of the properties (residential, commercial), your D:E ratios in each, terms and restrictions of mortgages (avoid ARM's that expire concurrently), anticipated vacancy rates and trends, cash flow and reserves, etc. Bank' residential mortgage issuance limits aside (4?), I suppose theoretically, if each property can stand on it's own, with it's own reserves, etc., etc., then it's a matter of your own risk tolerance. I have more than one acquaintance that lost all their dominos to over-leveraging. Rule of thumb among my most successful REI friends (who as a set tend to be very conservative with debt) is that if you have to have a mortgage, put 50% down to weather the storms. Also makes it easier to pay them off faster when times are flush. I'm sure their CPA's disagree.

After posting this, I posted an ad on CL to sell to the highest professional bidder. Also to solicit quote for complete tank removal. Let's see what happens.

Matt Clark - I lived in the 'Noke for 10 years (Hollins area and SML). Great spot you're in!

Contemplating oil to gas conversion of four ancient oil boilers in a 4-plex where leases stipulate that new tenants receive their tanks 'full' must have auto-delivery contract and leave tank full upon lease expiration. So tanks are presumably full now. 275 gallons each. Technically, Landlord owns the oil and prefers to not write off this asset.

Presumably, tenants will be thrilled with this conversion. What is the best way to recoup the 'investment' of that oil which must be removed? 

Greetings everyone! I'm a new active investor having acquired my first 4-plex earlier this year in Newport, RI. Truthfully, I wasn't looking for a 4-plex, more like a vacation home I could buy and rent to break even until I'm ready to move in full time in 10-15 years. But the economics of a 4-plex, particularly if viewed as the starter to a portfolio to build over that same period had a lot of appeal. 

The configuration is four (4) 1-bed/1-bath 850 sq. ft. units, two over two, plus 4-car garage and off-street parking. Tenants pay all utilities. Pretty rare. I was fortunate that the two top floor tenants would move prior to closing. We renovated (new kitchens, appliances, refinish hardwood floors, sheetrock ceilings, fixtures, paint) and were able to increase rents by 40%. When a hard-living tenant on the first floor then agreed to leave, I was ecstatic and renovated that unit as well for the same 40% gain. The fourth unit is rented by a long term tenant who is welcome to stay indefinitely and agreed to a 10% rent increase, no renovations required. We did sub-meter the water meter to charge for water/sewer. So I'm very happy with the net and current cash-on-cash ROI as the business case was built on original rents.

Key to success so far is absolutely my sheer luck in finding a go-to contractor/handyman with quality trade contractor contacts. It's a great chemistry and collaborative fit. Without him, this could have turned out differently. 

Now fully occupied, we're in process of acquiring the adjacent property, a 2-bed/1-bath cottage on another .25 acres. Cute as heck, great expansion potential. We'll renovate and use this ourselvves seasonally and to keep an eye on the 4-plex. With this level of scrutiny, we may convert from annual to seasonal leases and VRBO/AirB2B on the 4-plex for greater gains. Hopefully a third unit is in the cards for Q2/16.

Biggest question with the 4-plex is when to replace the four 'snowmen' oil boilers? Tenants pay the oil bill and they are essentially bullet proof. Its about $8k 'all in' per unit to switch to natural gas.

Nice to find this site and look forward to sharing helpful infornmation!