All Forum Posts by: Patrick Malinowski

@Victor Vella

I agree with you that the auctions seem super risky. Not only are they very competitive but they also don’t give much time for due diligence in on the part of the prospective buyer.

I have four units so far and am looking to take what I’ve learned from rehabbing those to some more deals. Haven’t personally seen many great wholesaler offerings.

@Ehsan Rishat

Thanks for the explanation! It seems I was misunderstanding what is considered preforeclosure. In that case, I can use the initial filing of the complaint by the lender as a flag I can track and generate my own lists with.

I’m looking for information on how I can find preforeclosures in OH specifically. From my understanding, OH does not require a notice of default to be filed before the lender can file the foreclosure complaint in the common pleas court. So the first traceable document I can look up is when the lender has already begun the foreclosure process and the property will end up in a sheriff’s sale. I’d like to have a chance at getting properties before the lender files the foreclosure complaint and the lender bids it up in an auction situation. Besides looking at Zillow (which usually has out of date info) is there somewhere else I can find properties that are in preforeclosure?

I appreciate any help or advice!

Sorry, not sure why the link is not working. I've c/p'd the gist of the numbers below:

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Hey BP!

I'm looking for feedback on this deal analysis (see link above) for a triplex in Cincinnati. The rent ratio is 1.94% ($1750/$90k) and the neighborhood is C to C-. Owner is responsible for water/sewer/trash and utilities for the 1BR unit. The 2BR and 3BR units pay their own gas and electric. I'm withholding 8% for vacancy, 9% for maintenance, 9% for Capex, and 10% for property management, totaling $630/mo. PITI is another $692/mo, owner paid utilities are $350/mo, leaving the total monthly cash flow at a mere $77/mo. I haven't even accounted for other costs like lawn care and snow removal. Clearly, from the numbers I'm using this would not be worth it. I feel like many people would kill for a property that had a 1.94% rent ratio which begs the question, how are you making money off properties like this? 

I appreciate any and all feedback!

Thanks @Jason Bott! I will definitely look into getting a formal quote to get a better idea of insurance costs . . .

Hey @John Leavelle!

Good catch with the yard/snow removal costs - that will definitely eat up the $39.05 cash flow. 

The 4 units definitely need a little TLC. Outdated kitchens and new flooring needed in all of them. Deferred maintenance most likely includes roof and HVAC. 

It's pretty common for the owners to pay for water/sewage in the area but I may be able pass the trash removal costs onto the tenants. Or another option might be to raise rents slightly (~$25/mo) to account for those costs. 

Appreciate the feedback!

Thanks @Chris Sellers. I checked the auditor's website for the taxes and the semi annual net is $1625. This is also a short sale so market value is higher than $80k. Appreciate the input on the insurance rates - I need to get a real quote!

Looking for feedback on the assumptions I'm using for a buy and hold 4 unit multi-family analysis in the Midwest (Cincinnati). Each of the 4 units rent at $500/mo and are 1BR/1Ba. Separate electrical and heat. Owner would pay for water/sewage and common area electrical. Here are the numbers:

Property Purchased: $80k

Debt Service: $350/mo

Taxes: $275/mo

Gross Scheduled Rent: $2000/mo

Operating Expenses (per month):

- Vacancy: 10% ($200)

- Maintenance: 15% ($300)

- CapEx: 10% ($200)

- Management: 10% ($200)

- Owner Paid Water/Sewage: $150

- Trash Service: $85 (for 3 bins + recycling)

- Insurance: $150

- Owner Paid Electric: $50

Total Operating Expenses: $1610

NOI: $4680

Monthly Cash Flow: $39.05

The neighborhood is at best a C- if not D class neighborhood (high crime, high tenant turnover, low income tenants). Thus my assumption for slightly higher vacancy and maintenance rates. My main question is related to the disconnect I see in with this property vs. the 2% rule and the 50% rule . . . this property pulls in around 2.3% rental income vs. property value and seems to barely cash flow, especially for a multi-family. I know that a lot of people tend to stay away from lower income/high crime neighborhoods due to some of the inherent issues with tenants and high maintenance costs but I've also heard that there's a lot of money to be made in these neighborhoods w/ the right property management team and tenant screening. I would have expected based on the 2.3% rental income that on paper this property would have looked much more appealing vs. what I'm seeing. So what do you guys think - am I being too conservative with my operating cost assumptions (vacancy/maintenance/capex/prop management) or am I correct here and just need to re-evaluate my REI plan?

Thanks for any and all feedback!

-Patrick

Hey @Jeffrey Corpstein! Welcome to BP and Cincinnati. I'm also based in Cincinnati and new to REI . . . hoping to get my first property in the next few months. Definitely interested in the BRRRR strategy as well. Let me know if start your own meetups for sure and best of luck!