All Forum Posts by: Omar Ababneh

I am giving Complete Realty Solutions a try. 

Quote from @Omar Ababneh:

Quote from @Brian Kantor:

I am confused. You "own" 2 of the 8 units and your partner "owns" the other 6? Are they using a different PM than you are for your 2 units? If that's the case, is there an economy of scale in using the same PM as your partner?

 It's the same company managing the 2 properties but the net income per month get distributed 75% to partner and 25%. my partner closed the loan portion he should pay to maximize his cashflow so I'm handling the full loan now. 

 I am a little confused on this still. Your partner closed their part of the loan, but you still owe the 25% that is left over? If this is the case and your loan amount is only 25% of the original amount, I would refi that loan to drastically decrease your monthly payment. 
Yes rates are higher, but you wont be bleeding. Plus selling would require both of your consent. 

Talk to a lender and have them quote you and the refi of the remaining amount

Quote from @Omar Ababneh:

Quote from @Chris Merchant:

What is each unit bringing in for rent each month?  When are the current leases up?  What are average comps renting for in the immediate area?

What is each unit bringing in for rent each month? $850-925

When are the current leases up? This August. What are average comps renting for in the immediate area? $850-$1000

 $850-925

If you go by the 1% rule (only a rule of thumb not an exact set in stone rule) you need to bring in $937.50 per unit to cashflow or $3750.00 per property.  I am not saying that is the problem or only problem here but I would definitely raise the rents to at least $950/month in August if you think you can get that in rents.  That is still under the high end of the comps but puts you in a better position to cashflow on the properties.  Or simply talk to your PM, it is in their best interest to get you the maximum amount of rent they can, the more you make the more they make working on commission.  Ask them if they feel yo could get 950-1000 a month per unit.  
I am assuming the units are not all identical?

I am confused. You "own" 2 of the 8 units and your partner "owns" the other 6? Are they using a different PM than you are for your 2 units? If that's the case, is there an economy of scale in using the same PM as your partner?

If they're each a 4 unit property it should be more common that tenants are taking care of all the utilities. 

What are your expenses per month per unit? How do they break down? 

STL has a lot of shady PMs so there could be opportunity there

@Omar Ababneh - So you have a negatively cash flowing property? Where are rents now vs. where they can be? If you're already close to market and still negatively cash flowing 500 a month, you should consider selling. Real estate is meant to provide passive income, not drain your excess cash each month. You will max out quickly if you had to feed the "alligator" properties each month.

The good news is if you purchased it in September 2021, you most likely have equity in the properties hence you might walk away with some money, which is better than feeding an investment 500 each month. If it doesn't cash flow and most likely won't in the future, give rid of the asset as soon as possible. 

What is each unit bringing in for rent each month?  When are the current leases up?  What are average comps renting for in the immediate area?