All Forum Posts by: Mike Mefferd

I'm looking for recommendations for the best type of flooring to install in the common area entry ways of my apartment building. Currently the entryways are an eye sore with 1980's tile and I'm trying to figure out what material would work best. They are in the midwest so I'm concerned about snow and salt. I also want to make sure they hold up for at least 3-5 years. What have people used that has worked best from a safety standpoint, as well as an aesthetic standpoint?

I have just signed a contract to be able to sell Spectrum Cable and Internet to tenants. Spectrum has agreed to sell me their package at about half of the retail cost, and now I am trying to figure out the best way to bill cable and internet to the tenants. Should I add this to the overall rent when I market the unit, or should this be a monthly fee that is billed in addition?

I'm also looking at installing a smart water meter system to bill back water to tenants as well. Any idea how much these cost per unit to install? Also, is this something where the tenant receives a bill each month they need to pay? If so, I wonder if I should just send an invoice to the tenants each month for their water usage and cable bill. Thoughts?

Does anyone have any recommendations for lenders who will do cash out refinances for single family rentals held in an LLC? The properties are under $110k in value and we are struggling to find someone who can offer long term competitive terms. Ultimately we are searching for products with 30 year ams and relatively competitive rates. They are located in Toledo and Columbus Ohio. Any suggestions are greatly appreciated!

Appreciate everyone's comments! I think for now we will continue to allow this company to service them. 

I'm curious though. After you factor in gas, electric and water for the laundry room, there is very little profit actually being made on this unit. Does it make more sense to turn it back to an actual rental unit, or do you think it offers enough value to other tenants in the building to have on site washer/dryer facilities where you can keep higher rents?

Thanks!

We are currently buying a 24 unit apartment building that has on site laundry facilities. The prior owners were using a company that paid for the machines, serviced them and then sent them a check at the end of each month. They charged 50% of the revenues in order to do this. 

This is my first experience with on site laundry facilities and I'm curious to hear if this seems like a fair agreement, or if I should look into buying and servicing my own equipment moving forward. Any advice on how others handle this would be greatly appreciated!

Thanks,

Mike Mefferd

I’m looking to sell my 18 unit apartment complex in Vandalia, Ohio just outside of Dayton. Property has performed very well, but I’m looking to pull all of my cash out to use on additional properties. Over $85k has been spent renovating units. Six of the 18 units have been fully renovated. Average unit renovation is roughly $12,000, and the average increase in rent per unit post renovation is roughly $175. That’s a 17.5% return on your renovation investment with a value equity add of $30,000 per unit. 

Monthly Rent:                                $9,100

Taxes:                                              $958

Insurance:                                       $325

Property Management (12%):     $1,092

Vacancy (5%):                                 $455

Repairs (5%):                                  $455

Water:                                              $540

Trash:                                               $125

Lawn/Snow:                                     $250

NOI: $4,900

Cap Rate:                                           7%

Sales Price:                                       $840,000

Please feel free to reach out to me with any questions. My number is 419-283-9368.

Thanks,

Mike

Thanks @ Garrett Hogan. When I was researching it, I have seen that same advice. In that scenario, are you giving your investors a preferred return or just giving them 70% of the cash flow each month and 70% of the equity at the end? Also, when it is a value add complex, how do you handle all the money for the rehab? If you are providing a preferred return, do you collect the rehab money first and pay a return for the total money invested? 

Sorry in advance for all the questions. 

Thanks for all of the replies. Most of them will not qualify as accredited investors for a syndication project. 

If I was to bring them on as limited partners of the LLC, any recommendations on how to structure the money side of it? I'm trying to figure out a way to make it not very complicated but also make sure that I get paid for doing the majority of the work. My partners will have a say, but they will not be the ones spending time finding the deal.

I have some friends, family and peers that would like to begin investing with me in apartment buildings. Looking for any advice on the best way to structure the deal. I want to make sure I get paid since I will be the one finding and managing the deal. How is everyone structuring their deals with investors on multifamily properties where it is advantageous for all parties?

Thanks for all the help!

I am looking for tax advice if I sell a property from one of my LLC's to another LLC that I own. WIth this sale, it would show $150k loss and I wanted to know if this loss could be deducted on my taxes. Looking for any advice on if this is even legal.

Thanks in advance,

Mike