All Forum Posts by: Tyler Zindars

You need to shop around a lot more locally. Especially look into smaller banks. They invest in their own communities. Before you even let the banks run your credit and pull those inquiries, you should sit down with a VP of commercial lending at small local banks that handle portfolio loans (lend their own money) and put together a plan on the what you want to do. You can at least get your name out there so that in the future if you have other projects they may consider you. Smaller banks are far more likely to consider your project versus larger banks like Bank of America. However, at this point your DTI is too high at 47%. You may have to go the hard money lender route. If you can get a track record established it will be much easier to get financing on rehabs.

These are good numbers as well as a nice looking property. If you are able to make some improvements in the other units and increase the rents as tenants move out you will be able to create some additional value down the road. It seems like this is a solid investment. Nice Job!

Again, I think it is a matter of perspective on your bigger plans in terms of properties managed or owned. It takes time to learn some of these programs. I use appfolio and I don't have any where near 200 units. You should evaluate different software programs to see what works the best for you. Getting property management specific software will absolutely save you time and money in the long run. The sooner you have the systems in place the easier it is to expand your business.

Hi Tyler,

I've been using appfolio for about 6 months now. At first I balked at the $200 per month fee, but once I realized the time savings I went with it. I'm very happy with it. Although, it is more expensive, I do think that it has a lot of features that you will find very useful once you get accustomed to the system. I know some people mentioned that it ideal for those with more than 200 units. I have a smaller but growing management business and for me, I would rather start out with a great system and pay a little more than have to relearn a new system down the road because I out grew the features on the more basic software platforms. You will want to weight the pros and cons of each software and determine for yourself where you are headed with your business and the features that you need. There is a learning curve so keep that in mind when shopping for software.  I find that appfolio is constantly updating their software and listening to their users.  One feature I really liked is the application to e-lease option which basically automates the lease and move-in sheet once you get your tenants application based on the forms they fill out. There is a lot of time saving either way.

Welcome to Bigger Pockets! You can get a lot of information through reading and researching on this website. We have an investor meet up a couple of times a year in Champaign, IL that might interest you if you want to connect locally.

I would be up for another meetup. We should meet again over at Jupiter's at the crossing. 

Hey,

I've been buying and rehabbing single family homes and renting them out for a while now and with good success. However, I was wanting to scale up and I prefer projects where there is rehab work as I get the appreciation, lower operational and maintenance costs, as well as better quality tenants where I can repair them. I've found a multifamily project in a smaller town that I'm having a difficult time deciding whether or not this project is the best use of my time and money. I'm looking at taking a family partner on this deal so I can spread my risk out a little bit. The property is probably a c location.

The bank is very motivated to get a deal done. I'm looking at purchasing the property for around $64,000 and putting about $104,000 into renovating the units over a six month rehab timeline.

Here are the specs on the property. 

There are two buildings on a corner lot. 6 units are two bedrooms/1 bath and 2 units are 1 bedroom/ 1 bath. Both buildings were built in 1976. Buildings seem pretty solid, but one needs a roof as well as almost all the windows need replaced. Most units need a full rehab. 

The estimated rents are around $450 for the 2 bedrooms and $375 for the 1 bedrooms. The property needs significant work. Only three of the units have paying tenants, the other 5 units are empty and in poor condition. I estimated I would need to spend about $15,000 a unit on one building and about $11,000 per unit on the second building. I generalized some of the expenses, but for me these costs average out based on past rehabs projects. I would work as the GC and oversee the work and any subcontractors.

I believe I can get the rents up to $500-$550 for two bedrooms and $425-$450 for the 1 bedrooms. 

Estimated Repair Costs front four units in 1st building

1. Flooring $3000

2. Windows $2100

3. Kitchen $4000

4. Bathroom $1500

5. Trim $1000

6. Fixtures $500

7. A?C $$1500 split unit /$3000 central A/C

8. Misc. $1000

9. Landscape $250 per unit

Estimated Costs are $14,600 per unit

I'm going to spend about $15000 per unit

Estimated Repair Costs for back four units in 2nd building

1. Flooring $1500

2. Windows $500

3. kitchen $4000

4. bathroom $800

5. Trim $600

6. Fixtures $300

7. Roof $5000

8.Misc. $1000

9. Landscape $250

Estimated repair costs are $9000 per unit in second building

Roof Repair? $5000-$10,000

Estimated repair costs around $11,000 per unit when figuring in roof costs

Estimated repair costs of $104,000 for both buildings

I could offer $64,000

Repairs would be $104,000

closing costs $2000

Estimated all in costs at $170,000

Estimated Gross Income of $43,800

vacancy 5% $2,190

property taxes $3,000

insurance $2,000

maintenance $2,500

snow/mowing $800

utilities $1000

pm $3,500

garbage $1200

water $1500

Estimated Fixed Expenses $17,690

Estimated Net Income $26,110

Anyways I wanted to get some feedback. This is a big project. If I were to sell this building later on and it was rehabbed what would you value it at? What would the income be worth to you if it were turn key? 

So I have a growing portfolio of rental properties. I wanted to know what the bp community things is a safe range for leveraging rental properties in terms of debt to equity coverage on investment properties? I was thinking that staying within a 60-70% equity position on my rental properties was too conservative? Should I leverage more capital to grow my business? With commercial interest rates at 5% does it make sense to increase my leverage by refinancing some properties and trying to lock in longer term loan rates on my investment properties? I have a long term buy and hold approach to investing. I have been buying distressed single family homes, rehabbing them, and then charging above market rents and renting them out for the long term. Any thoughts?

You can count me in! I'm looking forward to meeting everyone and sharing ideas and great stories.

Tyler

Hey Brandon,

Thanks for mentioning that keyword alert feature. Makes it easier to keep track of specific subject areas!