All Forum Posts by: Katrina P.

Thanks Austin!

Hi everyone, need some input. I am considering a small multifamily that apparently had a bad bed bug problem in 2012, at which time, the current owner vacated the building and spent $7k heat treating. Since then, he has maintained a regular bed bug prevention program. Here's my dilemma: during my due diligence period, I have scheduled the inspection twice. First inspector pulls out without explanation; second inspector emails me yesterday saying "sorry, I have to renig. Word has it that this bldg is a mess and has a bed bug problem and it just has a bad reputation in the inspector's community." So i call him and he reiterates the same thing over the phone, and suggests that I contact someone out of the area who doesn't know about the building to inspect it. So now, I am questioning should I go through with the purchase? I have never heard of such a thing!! And it's raising a major flag for me. So has anyone ever gone through this? Any advice?

Thanks!!

My closing is scheduled or 7/11.

I am purchasing through them right now... so far, seems straight forward. I do have a Realtor I'm working with, but I could have done it on my own too.

I add a 4th account for taxes. 

Katrina

After you find a property, just make an offer! You won't usually know when a seller will hold a note unless you propose it. I have seen some cases (only Multifamilies or packages) where the listing said "Land Contracts acceptable" or something of the sort. But usually, you're just shooting in the dark with regards to what sellers may be open to it. That's my experience, anyway. But also, if they're working with an Agent, that has already been discussed and the Agent knows whether or not the seller will entertain it. But again, you just have to ask. Hope this helps!

Hi @Ken P., thanks for your input!  I agree with you regarding the garbage.  I emailed my agent this morning to ask the seller about this.  I pay $40/month for my 6-unit and my 8-unit, so I know this figure is high.  But I used it in my calculations, based on what the seller told me he currently pays.  Regarding the $68 for pest control...  The seller paid $7k a few years ago to have the place heat treated for bed bugs, and has been on the program ever since.  I assume it was bad if he had to do that.  So I decided I would stay on the program so that I am not getting monthly calls about bed bugs.  This program covers ALL pests and rodents (mice, roaches, bedbugs, etc.), with unlimited callbacks.  So really takes a headache off of me.  So for now, think I'm gonna keep it, and monitor the callbacks for use.  

Thanks so much!  Got it!

Thanks @Oren K. for the points! Tenants pay their own gas and electric, so that's why I've only included the water, sewer and garbage in my numbers. Regarding occupancy, I'm feeling a little slow this morning...can you please expound on your explanation? Regarding CAPEX, I'm hoping to have a better understanding of what's to come after the inspection. Property Mgt is 8% in this area. Waiting on return calls to get the full scoop on taking on tenants and how they handle filling vacancies. You're right...didn't account for any legals/accounting. Need to do that. Thanks for the input!

Thanks for the input, guys. You're really the best! Guess I am hesitating because, I am just really digging into this multifamily business, after starting off in Single Family; and while, at first glance, the numbers seem great for multis, when you dig in, the expenses are MUCH higher. Since I've been investing, I have experienced virtually NO turnover in my single families. I'm a good landlord, get things DONE, so my tenants love me, and just stay. With the multis, not only are the expenses much higher, but it seems to be more of a hassle dealing with tenant issues (parking, disputes, etc.), rodents & pests (e.g., bed bugs), among other hassles. So I guess when all is said and done, I have yet to decide if multifamily is ultimately better (or more profitable) than SFR. The jury is still out, as far as I'm concerned. With this particular property, it seems I can make the same cashflow with 2 SFR (and two tenants), vs SIX tenants (and all their issues). I guess the CapEx would make the difference in the long haul (1 roof vs 6?). Idk..still figuring out my niche, I guess.

@Michael Ventura PM me and we can discuss.  Thanks for your input, sir!