All Forum Posts by: Quinn Lamb

Andrew- Curious if you found anyone that you liked for your project or if you're still looking.  I've got a similar project in Victorian Village and will need someone soon...  Let me know if you've found anyone and I'll try to do the same if I run across anyone good.

Did anyone have any luck with the contractors listed? Thinking about using Superior but they seem to be on the higher end in terms of cost.  

I have two duplexes in Victorian Village that need alot of TLC from tuckpointing the exterior brick, replacing wooden box gutters, refinishing all hardwoods, updating all electric, and replacing kitchens and baths.  

I'm buying two multifamily duplexes that are situated on one parcel. Since they are on one parcel they do not qualify for any Fannie or Freddie conventional fixed loans (or so I've been told). Two banks are telling me that I will have to take out a portfolio loan and the options are 3/1 vs 5/1 ARM loans. Not being super familiar with either, and taking out over $450K in the loan, I'm anxious to learn my options as this is my first buy and hold investment.

Since this is an unconventional property, I'd love to hear stories about people with similar experiences.  

Great point, William.  I'm hopeful that the repointing would only need to happen under a couple of windows that look like they had some shoddy patch job.  The rest of the mortar passes the eye test but we'll see during the inspection.  

Thanks for all of the great detail!

The purchase agreement was built with a ton of contingencies so we are protected at this point. We offered 3k in earnest money. I appreciate your analysis but I feel like the current rents are not an accurate barometer for cash flow. This property is grossly under-rented for the area, $400 per bed (current rent) is close to half of what the average renter is paying right now. I believe this is a factor of current mis-management and minor aesthetic potential. I would use at least $1,800 per unit or $86400 per year ($43,200 after 50% rule gives you ~6.5% CAP rate). This also gets you almost 18% ROI in year 1, likely less with closing cost to your point but still strong.

I agree that my expenses could be refined above, and I have the hard numbers to support the cost associated with these units but I understood the 50% rule as being an ultra conservative metric that would cover CAPEX+Insurance, taxes, vacancies, etc...

Also, the 100K is included in the loan payment but would likely not be financed, making the loan payment decrease.

I'm in the process of buying two brick side-by-side duplexes in my neighborhood for $568K (4 Units/3BR/1BA each- Currently renting for $1200, comps in the neighborhood rent for $1800+). A very similar duplex just sold two doors down the road for $340K... When I put in the offer we had only been in one of the units and of course it was the nicest unit available. We were planning on making renovations to the bathrooms and kitchens plus obvious aesthetic work but upon seeing the other three units I fear there are some more serious issues and wanted to get some feedback from experienced REI. Quick financial summary below for context:

Monthly Rent: $4800 currently, Goal is $7200, 

Expenses: $2400 a month (50% Rule)

Issue 1-Potential Bad Tenants

• One of the units was absolutely trashed with mouse traps and obvious apathetic tenants
• One of the units looks to be a party house for recent college grads

Do we have any leverage to get these tenants out, both expediting our much needed renovations and getting us higher cash flow from the higher rents.

Issue 2- Wooden Box Gutter Rot, Missing Mortar in brick

• We're getting estimate on this but it seems to be an expensive fix.

Issue 3- Old AC Units/Water Heaters

Issue 4- Leaks around windows to interior

• probably ties back to the mortar issues in the brick

Do any investors have experience in seeing major issues like this after the initial offer was accepted.  Curious to hear stories on how much sellers were willing to move after the buyers discovered more serious issues.  These units seem to have great potential and are in an unbelievable location, just worried about all of the "if's"

*meant Bill!

Great advice, Jim.  I'm very familiar with the area and had personally rented for almost a decade in the neighborhood.  Unfortunately and maybe fortunately, I used to pay a lot more in rent to live in a lot less... Basically I'm comfortable saying this property is under pitched from a current rent perspective.

Hoping this property actualizes, thinking there is about 20-30k of opportunity in the listing price as well.

Looking at two adjacent duplexes.  Listing for $580k, the four identical units are each 3 bed 1 bath renting for $1200 a unit.  Average rents in the neighborhood for comp houses are $600+ per bed.  Taxes are $9600.  Not sure on insurance or other expenses so if others have insights on that please share.  I'd be putting 20% down at 4.1% interest.  Does this seem like a good initial investment?  The properties are in decent shape in a great neighborhood, with minor cosmetics they'd look great.