All Forum Posts by: Peter B.

@Jason D.

Ah that was what my second guess to what you meant. Yeah sure if your closing on hundreds of units a year. Pretty sure Op is 21 looking at his first property. 

My argument is diy is one of the more efficent ways to get started/scale up IF you have the skills.  I just find it interestining how often this is over looked or people refuse because the work is beneath them.. Maybe I'm wrong??

For what it's worth,my favorite thing about B.P. is all the different perspectives.  

@Jason D.

What do you mean by big picture tasks?

Building a porfolio large enough to work when you want, dropping your kids off at school, going on field trips,not missing a single christmas concert or sporting event, kids never seeing daycare, volunteering,coaching, being able to make donations to charities of my choice.. This is my big picture. And it was all done with a tool pouch on.

I get it if you don't have the skills to do the work by all means hire a contractor. Probably the second biggest complaint on this site is the challenges related to contractors. (First being p.m.s)  I just think it is kinda interesting all these folks posting on here must be making well over 100k a year "working on their buisness"

I use a contractor.. Myself. I have worked my whole career in the building trades.  There is no way to learn more about your properties than doing the work yourself. (assuming you have the skills for the task)

Don't fall for the B.S "I'd rather work on my buisness than in it" A good contractor can make more than a doctor.

 For example we will fininsh 2 complete gut remodel apartments this Friday. Started March 26. (Working less than 6 hrs a day)  If I hired out we would probably be around 12k in it. We will have less than 5k doing ourselves.  That is probably 70-100 per hour if we were to pay ouselves.  Not to mention the improvements will result in a 200-250 a month increase in rent, reduced water use and electricity. Which will increase the value of the complex by nearly 15-20k. If you figure that in our wages are over 300 an hour.

Filling out a rent increase notice is probably the easiest.

Seriously though... I would add vinyl plank flooring, energy effiecent fixtures (led bulbs,low flow shower heads, water saver toilets.)

I doubt a contractor will give you a solid per ft price without plans. If they do they will err on the side of caution and be high.

You really need to get drawings..

@Kyle Smith

I think the best "Rule" they refer to here for multi is the 50% expense ratio.. Although this can vary wildly. (my run 25-40 without management) 

Your largest expense will be property taxes.. I like the taxes to be less than 2months rent per unit.

Utilities will be next. How is it metered? Individual? Or one central? What is the heat source/system? Forced air individual? Electric baseboard individual? Central boiler? 

Sewer water is next. You can call for the history once you locate a property. This expense also will vary.. I have 15-60 per month and my units are all 15 minutes apart.

Then will be your vendors you control. Insurance, garbage, snow removal/lawn care, maintenance.

Then will be your cap ex which is a "below the line cost"  How old is your roof? How old/efficent is your heating system? You can force a great deal of appreciation swaping an old inefficent boiler with a new modern system.

I am sure I'm missing something. But this should get you a good start.

Peter

@Guy Yoes

The first hurdle would be getting the zoning...Can you do multi with out a variance? For some reason a zoning board is much more receptive to "Hey can I get a variance to build 40 duplexes which will give you around 8-10 million in tax base" vs "Can I tear this house down reducing your tax base then build a duplex in it's place resulting in an additional 100k in tax base" 

The next and probably biggest issue is cost.. Unless your doing a lot of it your self and your time isn't worth much, it is really difficult to build one duplex that would make sense..Cash flow wise. (A 3-2 with 2 car would be around 850-900 per month by us) 

We have tried to build a few times and can't get it to make sense.. I was around 60 dollars a ft on my budgets Gcing myself and doing some work.(I could buy for 30-50 fully occupied with opportunity to force appreciation). The reason the 40 duplex builder is building is there is massive material and labor discounts with volume. Imo this is why you almost never see a single multi-family structure go up.

Those are NOT drop ceiling tiles. They appear to be glue up. Or concealed grid tile (I doubt they are concealed grid, that is a commercial system)... Either way they they are grooved on all 4 sides. They have splines in the grooves that keep the edges consistant. You should be able to run an utility knife on the edges to cut splines then pull/scrape them off. They are easy to replace, the challange is finding an exact match.

I would google Armstrong ceiling systems or USG ceiling systems that would probably be your best bet.

I am with @Steve Vaughan here. Ours generally run less than 50 bucks. Just general cleaning supplies or small repairs. All in it's less than 2-3 hrs work including screening new tenants/showings. We usually have a deposit from new tenant before the out going tenant is even out. Longer notice and good photos are to credit for that.

If we are doing a full remodel flooring,fixtures,paint,cabinets and appliances. I would say around 2k. We do all the work ourselves and can turn the units in less than a week.

If you are going through a management company these costs would probably be over 1k and 5k. Not to mention you need to bump up your vacancy to 5% or greater. (Ours is lees than 2%)

We figured with the time it takes us and what is considered acceptable charges/fees by management companies we could pay ourselves 200-300 bucks an hour. 

@Kenneth LaVoie

I started requiring a 60 day notice.  When notice is given we start advertising and doing showings.. This has helped some. It really hasn't stopped an unstable tenant from moving in January. Just gives us a heads up. We had 6 move between December and Februaury this year. I don't think we lost more than 2-3 weeks rent total.

I have seen a lot of managers writing leases to end in August/March. I have also heard from applicants some do penalize for a december-february move out.