All Forum Posts by: Ken P.

We're considering making an unsolicited offer to purchase an apartment building.  We know what the rents are, what the vacancy is, what the competitive rents are, have estimated per-unit and site rehab costs, after-purchase taxes, etc.  However, this particular complex includes heat and water in the rent, which means utilities are a significant portion of the operating costs.  If we are successful in acquiring the apartments we'll switch to RUBS because the market supports it and competitors use RUBS, but to make our offer we need to know utilities.  Is there any way to determine utility costs beforehand; e.g., calling the gas company, etc?  Gas is serviced by DTE or Consumers Energy (southeast Michigan utilities).

If you are an accredited investor, you can use a self-directed IRA to invest in syndications, often used for large commercial projects like buying apartment buildings. Typically you have to have at least $50,000 in the IRA to invest in a syndication.

We recently had a furnace conk out and when we called our previously-reliable HVAC guy, found out that he was not able to work for medical reasons.  It ended up taking about 2 weeks before we had the furnace replaced.  While it was out I provided electric heaters for the tenant to use, and the unusually warm weather we've enjoyed lately, and the apartment's location surrounded by other heated apartments, meant it was still habitable during the furnace outage, albeit cooler than normal.  The tenant's rent is $550/mo, and I was planning to credit him $100 for the inconvenience of having to use the electric heaters (and higher electric bill he'll no doubt be receiving).  Does this seem reasonable?

Good deal for what purpose? Do you want to flip it? To rent it? What are the comps for sales price? Where did you get your protected future value? Remember taxes are based on current local taxing authority-set value, which may have nothing to do with the actual current value. Taxes will reset to the actual price you paid for the house once you buy it.

If you're renting it out, you'd likely need to get over $3000/month to see any green after mortgage, taxes, insurance, maintenance plus reserves, and vacancy, and a whole year of profits would be wiped out by a month of vacancy. If you tell me places like this rent for $5000/mo it might be more interesting.

@JR M.

Yes, we use Schlage keypad deadbolts on all our MF units, except for a few doors with legacy elderly tenants.  As long as we change batteries annually, and don't use cheap knockoff Chinese batteries (got a 1AM call from an irate tenant after that mistake!) they work great.

George, congrats on the new house, and on your continued success.  You're way past the half way point to your goal!  The new house looks like it will be a really nice step up.

Have you thought about retiring from the 9-5?  You've been doing a fantastic job growing your portfolio while holding down a full time job, just imagine what you could do if you didn't have to go to the office every day.  Plus you'd have access to 401k funds to invest in things that return better and less risky returns than the stock market.  Just a thought.

If you are betting on a particular housing market to appreciate x% a year, why not just invest in the stock market? If you're investing in real estate, unless it is value add forced appreciation, invest for cash flow, and any appreciation beyond the rate of inflation is just icing on the cake.

I put all the receipts associated with managing 26 properties into Quicken software. It costs less than $100, organizes expenses into categories, and syncs with most financial institutions to reconcile bank statements. End of the year reports are easy to generate, too.

We buy $25k properties for just that reason - it's almost impossible for owners to find retail buyers because of the lack of financing. We try and often get seller financing, aka land contract financing, and use short term (less than 5 years) loans from investors when sellers need all the money up front.

We've used www.rentecdirect.com for ACH debiting of our tenants for the past 3+ years and found it fairly painless.  You can choose what bank account to send the tenants' rent payments too.  The biggest gripe I have with the payment service they have integrated into their software, Forte, is that it is slow; it takes about 8 - 9 days before rent paid on the first of the month finally reaches my business checking account.

Buildium is another PM software that automates rent collection, and it comes highly recommended by a number of other landlords at the REIA that I belong to. I haven't used it myself, but I know people with 10 units that are using it, and another guy with 170+ units that has used it from the beginning and still swears by it.