All Forum Posts by: Michelle Shriver

What a sweet deal, great job!

And may there be many more successful deals in your future

Yes @Mary M., it is.  

@Jonathan Nixon

Yes, for that area and the hassles it's got to be a great price!  Seller is unwilling to play at my price point.

Wow @Henri Meli, such a lot of great ideas!  I will keep them in mind for the future as most of them are not applicable to this situation, though several of the ideas could be helpful.

@Mike Wood  I do have experience with Section 8 in New Orleans, but only with one duplex in Algiers.  I had one bad experience with a tenant who was in a unit when we bought the building.  That was quite the story!

My tenants now are stable.  HANO is a pain, though I hear they are getting more efficient.  

And you are right, it is in the East!

Thank you @Account Closed

I was thinking that based on what I know about Evernote it could work well in this situation.  Though I have the free version, I haven't used it for much.  I'll go ahead and set something up there.

That's the trouble, it will be difficult to increase rents.  I would do the improvements because they need to be done and I believe it's the right thing for the long term viability of the investment.

They are all Section 8 with 1 under a different program.  There are little things I can do to the interior that could get me an extra $5-$10 a month, but Orleans Parish is not straightforward in how they determine the amount of the voucher.  Just because the max for a 3 bedroom is $1300 doesn't mean I'm gonna get that.  Could be $1100 and part of the variable is how much the tenant has coming in through a job or what she collects on her kids. 

I don't see it renting on the open market, though he had one tenant in there who worked for UPS who was a cash payer, but was trouble and had to be evicted.

The building is being "wholesaled" by a fella from the local REIA for another fella from the same REIA. Seller needs to get out because foreign, silent partner/investor is ready to be paid by 1/31/19.

I haven't spoken with the wholesaler in a couple of days, but put a message out to him today.

In any case this has been a great conversation as this is the first 5+ multi that I've considered and it has been helpful in understanding how it's priced differently than single family or small multis.

Thanks.

@Mary M., @Tchaka Owen

@Mary M.

Hmmmmm, what if you identified up to $40,000 worth of work (mostly exterior, but not major) in order for it to be an optimally functioning property?  Not talking about "pretty", just sound and eliminating deferred maintenance issues.  Soffits, rotting wood trim around doors and some windows, some painting, repair to a couple of small areas where the bricks are coming loose, new outdoor lighting, hole in parking lot......

I would have started sooner!

Hi @Mary M., thanks for your response.  I know how to come up with the cap rate, but how did you back into the price using the cap rate?

Unfortunately, I don't see a lot of room to increase the rents nor to reduce the expenses.  My best bet would be getting the property at a better price.  Seller is motivated, but there is other interest.  However, I will not overpay, someone else can do that if they want to.

@Mary M.

The typical cap rate for that type of property in that area is about 8%.