All Forum Posts by: Robert Rixer

I'll add, since you're pre-closing it's worth reaching out to the seller/current property manager to see what they currently do. More so than industry norms, the tenants expectations will be based on what is currently in place. You're best off continuing what is currently being implemented and then making adjustments once you have a better grasp on the building.

Welcome. I'm partial, but the multifamily section of the BP forum is the best.

That's rough, nothing's going to look very aesthetic. How about a fireman's pole? Or an a plane evacuation slide? Haha

@Kevin L. One may see it as being harsh. Another may see it from the perspective that they've been getting a free ride all this time and now the party has ended. Emotion and sympathy will not bring long-term success in this industry.

Raise them to market rate ASAP. Charging only $800 for $1200 market rent is no different to pulling out your wallet each month and handing them 4x $100 bills. No one would do the latter but for some reason a lot of people are okay with the former. 

They will likely not be happy with the rate hike but when they look at the options on the market, they'll realize they are still probably better off not moving.

Give someone an inch and they'll take a mile. It's your property, you set the rates. It's fine to justify the rate increase with comps. But you need to take the emotional aspect out of it otherwise you'll get eaten alive in the long run.

"It feels like the city can operate without accountability." Trust me, it's more than just a feeling

The problem starts to be more about cashflow. 

When you start leveraging 90%+ especially with today's higher rates and the high cost of multifamily's compared to their rents, the numbers turn upside down real quick. Add to that when you put <20% down, you're going to have PMI on top of the regular mortgage payments. The PMI gets higher as you step up from 85-90-95% LTC.

So even if you can get approved for this, you need to ask yourself are you willing take on potentially years of cashflow loss, for the privilege of owning the property?

The actual amount seems reasonable and in-line but that structure strikes me as odd. They are trying to show incentive to reach certain milestone price points but it doesn't necessarily align interests between the seller and broker. An offer of $34.95M negotiated up to $35M would actually put the seller down -$95k net versus accepting the initial offer. 

Some great answers already. I'll add, in investing you have to follow your gut and if you're already calling it "very questionable", drop it and move on. There are limitless other investing possibilities out there.