All Forum Posts by: Luke S.

NOI was just shy of 100k. Now its running around 135+/-

We have spent north of 100,000 on upgrades as well as some volunteer labor/time

No current sales. I was probably the last sizeable project to move through town. (15k person town) There are some listed for a 6.5 cap though (absentee heir owner... out of their mind)

We bought a 40 unit complex in 2012. This was the first purchase for our family. We have now added significantly to NOI for the property. Reinvested significant amounts of capital to clean up units/property/etc...

I now have someone who may be willing to buy at an 8 cap from us. This would equate to an almost 40% appreciation in value over the last 30 months. Is it uncommon for projects to trade like this, or will he run into appraisal issues, etc..? 

Also. In a lower key/slow growth town. Would you get out at that? I bought it at roughly an 8cap as well. But the appreciation seems like it would be too good not to take, and roll into a 'prettier' project.

Thanks in advance,

I am in the position where it looks like a few projects could all be coming to fruition in the near future. The downside, I think I will only have enough capital for 1-1.5 of the projects when there is potentially 3 coming (likely 2). 

I am curious your guys' thoughts no this. 

I am partnered with family on an existing project, and want to potentially use the parents for a type of loan for me. 

They are on the thought of 'eh, we will happily take interest from you, since you pay more than the bank'. I used this when we bought our last complex as I had some capital tied up until a couple months after we closed. So they allowed me to do a bridge loan with them at 5% until I got them paid back. 

So here is where the issues occurred. We stretched our capital pretty tight during that period and the thought of having a bridge loan to the parents made me paranoid as heck... We repaid the whole thing in 4 months (i told them 'lets plan for a year') so there was never any stress on them, although the stress on myself in that position was more than enough to teach me I didn't like lending that way much in the future.

Well, 16 months later and here I am wanting to be an Alzheimer's patient. Only I have a slightly different idea for them and I want you guys to tell me if you think its a good idea... If i am screwing them, if i am taking too much risk, etc...

Potential new project value 1.5-2mm. I would be splitting hopefully 50/50 with some friends of mine who are top notch developers. (they would give me how ever much I wanted due to me bringing the project forward) My income is very volatile... If i have a great year, i could potentially raise the whole 150-200k in the next 9 months... If i have a bad year/issues with another company... who knows if I can raise half of it in 5 years. That volatility is the source of my stress if you can't tell. :) 

My idea to them****

They have at any given time a good chunk in cash equivalent assets and would happily take interest. I might propose to them that they buy 50% of the project. With the following stipulations. They get paid back a 6% yield... guaranteed by me. But I hold any guarantee's on the note/etc... So their risk is the invested equity only. On top of that for me to 'buy them out' they need to get bought out at a 10% yield pace... 

So if the project does bad and i am subsidizing their yield early on and they only get 6% the first 2 years.. I would need to pay the compounded catch up to 10% as well as the initial equity to take over the ownership. 

I am just curious if this is a screw job on them. Part of me thinks its fair, and part of me is uncertain so that is where I ask you guys for input on this... 

Thanks in advance for your responses.

I wouldn't be selling it at a 10cap. I was just pointing out how we have added profitability to the project since we got it. I would be re-listing it at an 8cap obviously.

Working on helping some others get moved at an 8 cap(5 blocks away), which will likely happen by may 1.

There is about 400 units in town, most are held firmly and don't change hands often.

Owned a year. Been running 97.5% occupancy while upping rents and redoing units along the way. Previous owners were always over 95% occupancy for the 10 years they had it. We bought private unlisted for a 9.2 cap, and have worked it up to a 10 cap (but spent significant profits from the year getting the rents bumped 10% in spots, and remodeling units in others, etc...)

Fargo is running about a 7 cap(hour away).

Yes, would likely 1031 into something else.

I see all kinds of SFH deals on here, not many in the multi unit space... At what cap rate do you guys see turn key properties moving at?

Have 40 units we may take some profit on up in ND.

Morning ladies/gentleman,

We have been fighting with cold water and resolving some issues in our units over cold water in the past few months on a property we just picked up.

When replacing and redoing water systems we have both nat gas and electric (offpeak) available for water. If you are updating a setup what would you go with? I am inclined to nat gas due to long term savings, but figured i would pick your brains first.

Thanks in advance,

Luke

Morning Ladies/Gents,

This last month we have had a couple break ins in our laundry... We have a 'key style' box on most of our washing machines, and they seem to be inserting something in these and levering the heck out of them to break them loose...

We replaced a few boxes this month (for about $100 a piece) and they did the same again. It sucks more that we spend $100 a piece replacing boxes than it does that we are losing the cash in them...

Our driers they can't seem to break into with these 'half moon' style keys on those boxes. Our manager is looking at getting some of the 'circle key' boxes this week, and installing some cameras.

What type of locks have you found to work well on laundry boxes?

Thanks in advance,

Luke

quick look. thought it was for the whole deal..