All Forum Posts by: Account Closed

I just purchased a rental property, and am working with my property manager to determine what repairs we should do on one of the units before renting out.  This unit in particular isn't in the best shape: 10 year old carpets and paint, roaches, incredibly messy tenants (they are now gone), etc.  Kitchen cabinets are pretty gross... a lot of stains, dust, dead bugs... property manager recommends demolishing and completely replacing due to sanitary reasons... is that really necessary?  Would just a good deep clean do?

Property manager also recommends tearing out part of the dry wall between the kitchen and bathroom to check for mold... there were some dark mildew/mold like spots on the wall under the kitchen sink... seems like overkill, what do you guys think?

Thanks....

bump

Thanks all for the input!

Anthony is spot on with the reason I want a PM. Currently working 60 - 80 hours a week and don't have time for tenant issues. I will reconsider managing tenants on my own once things slow down significantly next year (hopefully).

Rhondalette, $100k is correct. Plus likely another $10k for renovations spread over the years I hold the property. Assuming I sell in another 3 years for $625k, IRR is 18% and ROI is 58%. Assuming a sell price of $600k I get an IRR of 13% and ROI of 39%. How am I arriving at sell price of 625k? Although I am purchasing for 530k, the property was appraised at 545k. Adding in 30k of renovations to bring value to 575k. Assume 3% average annual appreciation for next 3 years to bring value to 625k. Does this seem reasonable?

The property management company I plan to hire only charges 6% and has an excellent track record of leasing out units. The local vacancy rate is 4%, I am cutting that in half since I will be living in one of the units. Perhaps the maintenance costs could be higher though...

To answer your last question. Mortgage + prop tax + trash/water/sewer = $3050. Rent from other unit - PM fee will be roughly $2050. Assuming I live by myself in my 2 bd and don't rent out a room, I will be chipping in $1k per month to cover the remainder + $275 to cover vacancies / repairs. If I rent out the other room for $1k (very do-able for my area), I just need to worry about the $275.

Hi all,

New member here.I’ve been learning about and following the real estate industry for over three years now and am trying to get my feet wet.Currently have an offer out on the following property – plan to buy and hold for 3-5 years, and do considerable renovations during that time.The numbers seem promising to me, but I would like to hear your opinions!

Details:

Property type: Duplex in high rental demand area in Los Angeles Price: $530k Up front investment: $80k down payment + $20k renovations Rental income: $3800 / month* P&I, Tax, Insurance, Trash/Water/Sewer: $3050 / month Vacancy Rate 2% ($75) Repairs 5% (~$200) Property Management 6% ($230) (already verified rate with company)

Net operating income: ~$250

*Note that I would be living in one of the units.That unit would go for $1600 if I were renting it out.Since I will be living there, I only want property management services for the other unit, reducing PM fee to $130.Likewise, I don’t see why repairs on the other unit would exceed an average of $100/month.That brings net income to $450 monthly.A little fuzzy since I’d be paying half of the “rent” for my unit but to make the point…

To put it another way, living in one of the units and renting out a room, the rent from that room plus the rent from the other unit cover P&I plus trash/water/sewer completely.So I would go from paying rent north of $1k per month currently to ~$500 per month to cover property management fees and maintenance.Depending on the state of the market, I plan to sell within 5 years or hold and purchase / move into a second property?

How does this sound for a first time investment?Good, low-risk starter opportunity or do I have rose-colored glasses on?