All Forum Posts by: Pete Kelly

Thanks Zack........Not much of a discount but comfortable with the purchase price because of the market for rentals and the Management Co.  This is more of what you see is what you get.....No amenities or improvements that would significantly raise rents.  Solid property that I can buy and hold.

Thanks Kelly for the feedback and agree with your assessment but could not get it for less...

Thanks Thomas...I sincerely appreciate everyones's willingness to support other like minded members. 

Percy,

I went in with an offer of a quick close with the date of August 31st.  The HVAC units are being inspected next week.  This property has 22 (2) bedroom/(1) bath units......for the past 2 years it has averaged only one of the units being vacant and without any incentives like first month free provided.  I believe in my revenue numbers I accounted for the loss of rent of $7200 annually and based on the prior two years.

Oren,

Thanks for the analysis with this reply:

Current owner had the properties over insured and getting a revised quote based on current market pricing.

College Community but these units are not rented to college students.  7% Mgmt is solid and known entity but do have some of the fees mentioned.

Total Maintenance should have been $36400 and not $26400.

Renter responsible for utilities but do have an annual pest control and grass cutting.

Taxes and rate have been confirmed.

Thanks for Bridget's inquiry as I had a typo on the total expenses.  They total maintenance expenses should be $36,400 annually.

Bridget,

I would classify it as Class B, more because of the age.  They were built 18 years ago.  Based on significant number of properties I have researched, either sold or for sale, an 8% cap is the norm.

I have the spreadsheet from the Mgmt company that shows $256 per month expense for each unit. 

I am under contract to purchase 11 duplexes and have a 10 day DD period.  Although I have scrutinized the numbers I would appreciate the feedback of the BP community:

Details - $1,034,000 purchase

$94,000 per unit

$1200 month rental with a 10% vacancy rate over the past 3 years

Total Annual rent - $145,000 net of vacancy

Expenses:

Payment - $4454 x 12 = $53,448 - 30 year amortization w 15% down - approved w local bank

Annual taxes - $10,000

Annual Insurance - $8000

Annual Maintenance - $26,400 -

Mgmt Fee - $10150

Total Expenses - $107,998

New Roofs in 2014

All inspections of HVAC being completed next week

I sincerely appreciate the informed analysis of this deal.  Please let me know if there is any additional information needed.

Thank you Nancy for the feedback and full capabilities of QB....I need to become more familiar with the version we are using for my small business and see if it provides the details, per unit, as you suggest for my llc....currently I have 28 units and want to scale to 50.

Percy,

I have a small business and use QB for it as well as setting up my LLC for the rental properties for banking, taxes etc. I still like spreadsheets though to look at the money in and money out, but something more substantial than excel......but without the bells and whistles or larger monthly fees..........I have 28 units out of state in total to keep track of more for just the comfort and ease of the spreadsheet.

Like you the property mgmt. company has their own system.