All Forum Posts by: Robert Gandy

@Corey Melkonian, the concept that you are thinking of is called net metering. Net metering is allowing unused electricity generated by solar panels to flow back into the electrical grid. At bill time, you will pay for the electricity you purchased from the utility company at one rate, and you will be reimbursed by the utility company for electricity that you "sold" into the grid at a lower rate.  You pay for the net usage of electricity.

Submetering is a different concept. If you have a multi unit building with one utility meter, it is not possible to tell how much each unit is using. Sub metering is installing a meter on each unit. Sometimes it is not worth the upfront cost if the builder comingled wiring or piping between the units or floors. If you can sub meter, you are then able to assign the known usage of each unit the appropriate fees to reduce your expenses. 

If this is not entirely clear, let me know I need to expand upon.

@John Hixon, I neglected to consider that the tenants may not stand for the rent staying at $850 if they no longer have an electricity subsidy. It would probably be prudent to decrease rent to $750 after submetering, then raise to $800 through attrition. Best of Luck!

@John Hixon, I like the deal. I see the opportunity to increase value by $700K to $800K by submetering the units. You eliminate the $150/month max utility charge. Even if you have to spend $100,000 (just throwing a number out), you have the potential of increased cash flow of up to $7,000/month. If you bring a plan and cost to do that when searching for financing, you can likely get that cost covered in the financing.

@Kyle Sutton, everyday, I check the MLS in my target area. I look for new properties and I also look at price reductions. You can check www.floodsmart.gov to see if flood insurance is required. You can (depending on the jurisdiction) check to see what the property taxes are. You can use an online mortgage amortization caculator (or import one to Excel) to see what your monthly payment is. Then search zillow, postlets, craigslist, realtor.com for comparable rentals and rates. You should use the bigger pockets calculators or develop your own tool. Be sure to think about how much you will put down, what is a realistic interest rate based on your credit and/or loan type? What about closing costs (these could be up to 6% of the home price)? Are you going to buy move-in ready, or do you need to do any rehab? What are the potential holding costs until it is move in ready? Are you going to manage or will you hire a property manager (could by 10% or gross income)? You have to practice each day so that you know what your numbers to succeed are. That way when a deal does hit, you can be ready to move quickly.

@Christian Lincoln, well said. Even if things seem going to be going well, keep your day job until you see at least one thing go wrong. Then you will begin to see if you are ready to take the good and the bad.

@Mike Wood, I use a satin finish on the walls, ceiling flat, and gloss or semigloss on trim. I find that satin is much easier to clean than eggshell.

@Brian Knox, I use Venmo. It is an app that works really well for person to person payments. You link your Venmo account to your bank account. Your tenants will do the same. You request them to pay you, and they complete the transaction by transferring money from their bank account to their Venmo account and then to your Venmo account. You can then transfer the money to your bank account. It is pretty neat. It is not limited to just rental payments. You can pay friends with it for dinner or anything that comes up without having to write a check.

@Brian Coble, on a 5 unit or larger, the lending agency will focus on the Net Operating Income (excluding any financing obligations) vs the cost of the asset to make most determinations. However, if this is your first time, they will most likely not approve unless outside property management are part of the deal. Additionally, they will likely ask for 30% down payment. For better chances at approval, have a detailed management plan documented to include who is managing, how you will keep costs the same or lower, what cash reserves are to be kept, and what are your potential exit strategies.

@Adam EbanksYou can go to www.batchgeo.com. Put your addresses into an excel file with house # and street in column A, city in column B, State in Column C, and Zip in Column D. You can a name for each house if you like in another column.

You can go to www.batchgeo.com. Put your addresses into an excel file with house # and street in column A, city in column B, State in Column C, and Zip in Column D. You can a name for each house if you like in another column.