All Forum Posts by: Peter B.

@Marcus Narvaez

I am south of you in Waupaca county.  I own a 2% 4 plex... and a couple 2% sfrs.

The group here has explained my experience pretty well. These properties generally attract less desirable tenants.

 There is more turnover and damage during turnover. 1/5th of my properties fit this group, yet 3/4 of my evictions and court time is from this group.

These older converted buildings are much more difficult to work on.  It also costs a lot more to update than a conventional building. You will go broke if you try to make everything perfect on these properties.

 Take a close look at your expense on these as properties. Utilities and Wisconsin property taxes will eat you alive with one eviction and 3 late payers..They are what they are. 

With that being said.. If you self manage these properties you will get a fast education. I know I did.

I stay away from these now days and focus on B properties. 1.25ish with poor management and value add capable.

There are people on here absolutely killing it with these properties. There was just a podcast on these types. Just has not been my experience.

Peter

A ladder and the splitting mall in the photo would take care of your problem..lol

I have a satellite addendum stating nothing can be attached to the building period... I have made that point clear with all our satellite providers.

They call me now directly before any installs.

In my units with individual hookups, I do not suppliy... But will rent them.. I charge an xtra 25-35 a month for me to supply. (depends what floor they are on)

If they bring in there own I will at a minimum inspect to make sure they are properly installed. And make sure there was no damage during the install.. I will install for 50.

In the past I provided machines. They were constantly in need of repair/replace due to misuse. Charging for them has seemed to make some accountability.

Peter

Hi Matt,

Welcome. I am in Waupaca about an hour south of you. I checked out your dashboard. I am also a contractor. Carpenter. 

 I don't know much about the Wausau market. I kinda stick to my area as I self manage. If you have any questions don't hesitate to ask I'll help best I can.

Peter 

Blair,

The only issue I would have in Basement parking is you wouldn't have any barrier free units. (without elevator).. In my design the lower units can enter their apartment from the garage. I do have a 6 unit design with basement parking. It is a 8 unit with the 2 lower front apartments are the garage..

As far as income for the building to cover expenses.. It really depends.. Taxes and water vary a lot from town to town here.

What is nice about quads, is they qualify for fixed rate financing. I just got 3.5 for 30. So that really helps. This building grosses 34k has 12k expense. 10k. loan. clears about 1000 a month. I do my own management so that helps.

Good luck with your search.

Peter

Blair,

Agreed... There is a lot of new construction here as well. Some 4 plexes. I am at about 70 a ft. I own the land free and clear. I have some really good contractors to work with and have a very efficient design. With attached garages in the front. Self storage is pretty saturated here..

My experience has been 4 plexes cost a little more per ft to build than the larger complexes but they command a little more rent.

I bought all mine for under 50 a ft...They are newer modern layout and were realativly turn key So I have not pursed building beyond getting  my budgets. That and I have a zoning nightmare where 6 of my lots are.... I haven't given up on it though.

I would suggest stopping in one of the new construction sites and start asking questions. The contractors may even open up the plans for you? I was able to access one big developers plans and budgets on line. They had a sub contractor link and complete sets of plans. The plans included there budgets. (who knows how accurate they are). They came in at around 100 per ft. on there 4's and 70 on there larger complexes.

BP has been great for a lot of reasons, but it seems most here are spending more time chasing below market property. New construction is a whole different level..

Peter

Hi Blair,

I feel your pain there is nothing out there on the web with efficient quad designs.

However I have 3 newer 4 plexes that I want to use the design from, but adding a bedroom and bath.

 I want to do 3-2s. I'm having trouble getting the construction cost to cash flow even when owning the lots. I will probably get 900 rents on 300k cost. I wouldn't mind sharing anything I have come up with If you think It would help.

Peter

@Steve Vaughan

Yeah, That is pretty much how I do it as well. Always have my tools on me. I have 2 sets. 

"Homeless construction, painter, plumber" That's my dad to a t.. 

I often find myself in my work cloths (I am a contractor). My wife is a nurse and has done showings in scrubs. I really don't think it matters. It has more how you run your business. There is a Local owner he has about 300 units. He and his brothers built them all. They are in there 80's now. I have never seen him in anything but bib overalls and always wears his chrome hard hat, Same one for like 30 years. Has an old red truck probably 200000 miles on it.  Neat old guy.. Probably worth 20mill plus.

We have always allowed pets. I feel it has been an additional income stream...

I can tear out and replace carpet and pad for about 1.50 a foot.. There is about 600 ft in a 2 bedroom apartment. So $900...

Worst case scenario... (This has happened once in 15 years)  Tenant/Pet destroys new carpet in first year. Security held $550. 12 months of Pet fees ($35) a month $420. Your about even.

Best case scenario. Tenant stays for lets say 10 years. (I have experienced this multiple times)  $4200 collected in pet fees. 900 to replace $3300 gain.

The Norm....  Tenant/Pet stay 2.5 years and do moderate damage. Partial Security held carpet remains next tenant stays 2.5 years and does moderate damage partial security held and I have to replace. $2100 in pet fees collected $550 in security held. $2650.. $900 to replace. $1750 gain.

Our occupancy has always remained well above market.... We have never had to discount rents....

These are just averages...We screen the pets as well. We always meet the animal. Sometimes I'll ask the owner to walk the pet around the complex and up the stairs to see how they act.  So it has worked out for us.. Most in our market do not accept pets or charge excessive fees...

Peter