All Forum Posts by: William R.

If you go down this path, look into the historical tax credit before you begin. I'm currently renovating a turn if the century multifamily that is in a historic district.

Welcome. You have found a great place to get information.

I like your plan, but if you are looking for some constructive criticism: 1. I'd shoot for more than $100/door. At that rate you would need 10 4-plexes to reach your first goal. You will not be able to obtain that many mortgages either. 2. Not sure of your level of experience, but in my opinion you should be intently involved with your first investment property. If I did buy property out of town I would be sure to have a team (agent, prop management, lawyer, contractor, and handyman) in place before I made an offer on anything. I would not plan on doing any kind of renovation on an out of town property. 3. Evaluate your goals often. When i bought my first MF in '08 my goals were very different than they are today. I initially planned to to buy a MF every 2 years which I did for a few years. Now I am more untreated in discounted SF and master leasing MF 4. Exit strategy to move on to your second goal. SF are easier to sell with a larger pool of buyers. 5. Financing is often a limiting factor. You gota find the money to make any money. Good luck on working your plan!

Thanks for your input Al. I handle most of my own maintenance and landscaping with a total of about 20 sq ft of grass on each property. The buildings are each three units, so we have city services and trash removal is included in our taxes. I’ve tried to think of other economies of scale that could work to my benefit, but can’t come up with much.
I have a meeting with the owner this weekend to discuss a master lease option. I do not think they will accept my option price (below what they paid), but feel like they will accept my master lease agreement. I am structuring it about 15% below market rate for the total building with the owner continuing to pay the house electric and water/sewer. This will make me about $300 per month with little risk, and I’ll provide a great service to the owner. They don’t like being a landlord and I’m confident I can offer them a greater return by master leasing the building.

I think this comes from HUD data. The numbers are the same, at least for the zip codes that I looked at. http://www.huduser.org/portal/datasets/fmr.html

Congratulations! I wish you the best. It looks like you are going into your fist rehab much more prepared than I was with my first big project.

Does the owner have a lease for the tenant? If not, I think you would need an attorney to handle it.

It's not a good buy because it does not cashflow, and they are not willing to let it go for less than they payed. I will structure the lease at 10% below market rate to give myself some profit. It's two blocks from the university, I've owned the property next door for 6 years, and have NO issues with vacancies.

A fellow landlord is no longer interested in managing their multifamily property. They have approached me about managing it for them. I am not a licenses real estate agent, so cannot act as a property manager, but I can sign a master lease and re-lease the individual apartments. What are the potential drawbacks of this arrangement? It is a property adjacent to one of my own and I would love to buy it, but its not a good buy. Any advice would be appreciated as well as links to any related resources. Thanks!

I agree Patrick; I'll be as helpful as possible. I think they will list the property fairly soon, but I do not see it selling quickly as it currently has negative cashflow. I’d love to own it, but the numbers would never make since unless they gave up a ton of equity.