All Forum Posts by: Michael Yan

Thanks folks. I sent an email to the broker that I'd like to retract the agreement since I have not received counter-signed agreement from seller. I then called the broker to tell him about this, and he said the seller "should have signed it already". But I think since I wrote an email to him first, the retract is valid.

Thanks for your help again. I am new to invest in Baltimore and I was eager to make a deal. But through this case I learned a little bit more what to look for in Baltimore. For me it seems it's hard to find good deals.

I live in PA, under contract to buy property in Baltimore. Two questions related to legal:

1)I signed the sales agreement, the seller has not. Is it too late to hire a lawyer?

2)If it is not too late, should I get a lawyer in PA where close to me, or a lawyer in Baltimore?

RE investment gain comes from 1)Cash flow; 2)increase in rent so that property value increase. For a very good location with potential rent increase, do you accept a zero, or even slight negative cash flow when buy into a multi-unit property, assuming all repairs/capEx are figured in?

I saw lots of posts of good deals like 10% cash to cash return, or 12% Cap rate. Can it really achievable in a very good location like city center, where there are lots of competitions and all properties are expensive.

Thank you everyone! I was struggling between emotional liking of the property due to great location, and the rational understanding of low NOI. Your comments cooled me down and I am firm this is a no deal. Afterall this is investment, but a hobby.

Just told my agent to look for other opporutnities. 

I know this market is very hot. Someone else probably will buy the property at the price. They probably will do PM themselves, to at least earn the 8% PM fee as their cashflow.

7 unit apartment building in a very desirable area right next to a local university. The property is 100 years old. New roof. Windows have been replaced. The building is in working condition but lots of small repairs needed, all units are tenant occupied. Heating is for whole property. Right now owner pay for heating cost but if I buy it I will divide cost and have tenants pay their share.Kitchen and bathroom are functioning but old. Some toilets are loose. Outside brick wall need to be re-pointed which would cost around $50k. Electric are fused based and need to be upgraded at some time, which will cost $17k.

No cash flow first year. Second year hopefully I can get the heating cost as positive cash flow. Then hopefully I can raise rent and get more cash flow...

Total year rent: $77,040

Property Management 8% $6,163

Vacancy 5% $3,852

Taxes & Rental $12,676

Insurance $4,256

Repairs Residential $3,500 (actual, according to seller)

LL Electric and Gas(Common) $7,308 (mainly heating, which I hope to have tenants pay)

LL water $1,878

CAPEX set aside $4,800

Other expense $1,500 (actual)

NET OPERATING INCOME $31,107

Price $640,000

Capped rate 4.91%

FINANCING

Cash From Buyer 25.00% $160,000

First Mortgage $480,000

Closing Cost estimate $20,000 

7 unit apartment building in a very desirable area right next to university. The property is 100 years old. New roof. Windows have been replaced. The building is in working condition but lots of small repairs needed, all units are tenant occupied. Heating is for whole property. Right now owner pay for heating cost but if I buy it I will divide cost and have tenants pay their share.Kitchen and bathroom are functioning but old. Some toilets are loose. Outside brick wall need to be re-pointed which would cost around $50k. Electric are fused based and need to be upgraded at some time, which will cost $17k.

Total year rent: $77,040

Property Management 8% $6,163

Vacancy 5% $3,852

Taxes & Rental $12,676

Insurance $4,256

Repairs Residential $3,500 (actual, according to seller)

LL Electric and Gas(Common) $7,308 (mainly heating, which I hope to have tenants pay)

LL water $1,878

CAPEX set aside $4,800

Other expense $1,500 (actual)

NET OPERATING INCOME $31,107

Price $640,000

Capped rate 4.91%

FINANCING

Cash From Buyer 25.00% $160,000

First Mortgage $480,000

Closing Cost estimate  $20,000 

Thanks Ozzy. The location is on St Paul st and 30th. 

Are tenants usually expected to pay for heating, or usually the rent covers it? Probably water is included in the rent already, but I am not sure about heat. Currently landlord pay the heat but he said I could divide it up and have tenants pay their share.

Charles Village area. Multi-unit. 

How is the rental market there? I have been eyeing on a multi-unit property. Seems difficult to fill the vacant unit.

How much is the rent for typical one bed room apartment, with ok condition?

I am negotiating a multi-unit rental property in Baltimore. In agreement but after inspection I want to re-negotiate. Total loan amount is about $800k depending on re-negotiation result. 

Just talked to a loan officer, and noticed I need to pay 1% origination fee to start the loan process. Is that typical?  That's $8k hard earned bucks! Are there cheaper options?

Also, what if I pay the fee and in the end they find out some key issues that prevent loan from moving forward. Will I lose this amount?

This is my first time doing commercial loan. Any suggest would be greatly appreciated.

I just bight a small townhouse as my first venture into being a landlord. I have read a lot of useful tips from BP. Thank you everyone! I am now looking for a standard lease contract. Any suggestion where I should find one? I live in Pennsylvania.