All Forum Posts by: Mike Dymski

Actually did 3.5% discount rather than 5%...5% was proposed.

Financial advice from an unlikely source...

"I asked for money, I got advice. I asked for advice, I got money twice."- Pitbull

Thanks for everyone's feedback. I accepted his proposal and gave a 5% discount Low 50s, engineer, six figure income, 760 credit score, been with the same company for the past 18 years, recently divorced, wants to live downtown, not ready to buy yet. I will use the $16k to go towards recent reno at 3 units and the purchase of a 4-plex. Blessed to have an IRR that is a lot more than 5%.

 Good feedback, that's exactly what I was thinking.  Still don't know how I feel about it but that would be the logic to follow

Most prepaid rent situations involve a requirement for prepaid rent due to credit issues....not the case here. He's looking for a discount for PIF upfront.

If they violate the lease, I would evict and refund prepaid rent.

Best way to look at this is I will have the same tenant and they will either PIF upfront or just each month.

Thanks for your feedback as these are the pitfalls that are helpful to hear.

 yes, PM will do all the normal checks

If your goal is to keep going and quit your job, you will need to leverage and preserve capital.

Line 61 looks like a parent company management fee that would be eliminated on your ownership. You would need to get the broker and management company to verify.

Where does the 7% cap rate come from? $57 NOI does not get there. If the 7% is calculated by the broker elsewhere, you can reconcile the T12 with that schedule and see where the broker feels the T12 includes items (like the parent company management fee) are not applicable to a buyer. Be careful with that exercise.

IMO, 56 units typically does not need an on site manager and maintenance. You will want to analyze the property with a PM to make that assessment and determine the proper cost structure for all of that.

Anyone accept a year rent upfront and provide a discount...potential tenant is asking?  If so, what amount of discount do you use?