All Forum Posts by: Mike Krieg

Check with your mortgage broker as well because they want to see monies 'seasoned' for some period of time before a close. Make sure you know the rules of your mortgage broker or lender.

Welcome Kim! Network and learn like crazy. Good stuff will happen.

I've had tenants use Google wallet. Super efficient and I can see who it belongs too. Other than that I have them also them deposit directly into the business account. Two years on that system and it works. But I'm afraid it won't work as we grow.

Looked at the property today. It's a little more promising than I had perceived. Nearly fully leased now AND behind the old wood paneled walls is sheetrock! They showed me on unit they're renovating and I'm pretty sure they're not putting more than $1500 in the unit. They have a young guy working for $15/hour that would convey his terms to a new owner...dang, you can't get $15/hr in Austin--now way! Still I think its fair to use 18 months of revenue and the 50% rule for my offer. 290k is going out today on an LOI.

Joel, thank you for the quick response. I'm going to walk the property tomorrow. After that I will most likely throw them an LOI. But I fully expect this will just be an opportunity to learn and my LOI will be rejected. Even so, I'm learning and that's what counts. I would definitely need a deal on a place like this because it's going to be a lot of work to turn it around.

Hey everyone...greetings from 78735...is there another meetup planned for July? or August? I'm trying to find a mentor or someone to soundboard a deal I'm looking at which is an 18-unit apartment building. Would love to connect with local BP folks who've been there and done that....

I'm looking at an 18-unit building tomorrow being offered for 350K. Rent rolls show it's 65% occupied and the maintenance budget is showing about 10% which is probably about 5-10% too low for this property. So this is a value-add deal. NOI is 28K. Based on that the cap rate of the offering price is 8 which is far too high for a property like this. This is a lower end property that will require more hands on management. So, I'm adjusting my asking price for a cap rate based on 12% or 280K. What are the questions I need to be asking as I look at this property? I've looked at comps in the area and I expect that money will need to go into each unit to bring the place up to par with those comps. Also, we'll look at plumbing, foundation, electrical, location relative to competition, etc...I'm trying to find a checklist I can use for a smaller apartment building like this. Anybody know of one I can use?

I tried to do a small deal with a partner using a commercial loan (as req'd given that we'd have an LLC, etc) but we decided on these smaller deals that it wasn't worth it to partner up and use a commercial loan product...have you found this same situation in your deals? We're concluding that deals under 400k are best done solo...per our goals of keeping the cash flows higher.....But when we partner up, using a commercial loan product then it should be at least 400k plus....thoughts on that?

Eric, 

Great job finding a potential deal. As for me, I would be very careful about any cash flow property with a CAP rate below 8%. But that's me. I'd say, unless you think this has appreciation potential, be wary of that...or, try to get the price down so your CAP hits closer to 8%. You'll want that margin of safety. Of course, ask your realtor about this as well. If he's good, he'll help keep you from making a big mistake. Good luck!

Wade, how did this turn out?