All Forum Posts by: Robert Hernandez

@Joe Randazzo Unfortunately, I have already made an offer. Rookie mistake I know. The orginal was 215 and I got him down to 206. But, since they include closing we went up to 212. But, in your eyes what are your thoughts. I am paying market rate. The seller wasn't very motivated from what I saw. 

The two tenants in there paying $650 been there for about 3 years.

Offer has been accepted and I am closing in a week.

I'd say the market is decent. Alot of property sold there is on the market for a very short period of time from the MLS listing I saw. This was an offmarket deal that my agent brought me. So I am hoping I didn't get played.

Hello BP!

I am closing in my First deal week and as such I am very nervous whether or not its a good deal. The unit is old ~40 years old with old HVAC 3/4 are about 13 year old and one is about 8 years old. Roof about 5 years old.

3/4 Units are occupied. But, there is one tenant who lease is due and I do not plan to renew the lease due to past history of not paying on time (the old owner helped and lowered payments). Therefore, there will be one unit that I have to put a tenant in when I own it.

Purchase price: 

Purchase Price: $212,000

Loan: 3.5% FHA Loan Morgage rate 3.3%

Mortgage/PMI/TAX/Insurance: $1350/yr

Expense: (10%/8%/8%/10%): Vacancy, Capex, Repair, Property manager: $1080

Utilities: Electric and Water is tenant paid

Rents: $650, $650, $700, $700   -= $2800

Cash Flow: $370/month 

Cash Flow (10% expense):  $280

Cash at Closing: 8.5K (6K paid by seller)

The home is in a C class neighborhood, not the best there are some section 8. But, relatively quiet, not the worst place. Being that this is my first deal I am very nervous. My cash flow is pretty low since I was conservative with the numbers. But If i'm less conservative of course I can get close to $500/month if I do like (Repair 6%, Vacancy 8%, Capex 8%, PM 10%)

I would be living in one of the units, but i'll count my payment towards the income. 

I'm worried that I am "Overpaying" by paying market price for something that requires alot of potential CAPEX expenditures. Nearby Comps sold for around 205, 207, 220.

The appraisal came at my purchase price. I'm concerned about a downturn and this property isn't worth much. The seller is buying a homewarranty so that gives a little confort. But, I can't help but feel like this is a bad deal. I'm worried about vacancy too. The community has like 7 Zillow ads for rent around my area. The community is a quadplex market with a like 20 in the subdivision. A lot of which have been on the market from 1-2 months. 

Any Thoughts?

@TIm Harstead 15days - month is about standard from what I can see. That is true zillow may not be updated, great point. I will definelty be on top of this!

@Account Closed You're correct each market is different. If you don't mind me asking when you say you average 2 weeks. What advertisement do you use, do you have a property manager. And do you rent in "C" class? I'm very nervous being new to the game.

@Account Closed I am not 100% how they market. I knowthey use trulia and zillow. Yes, I am starting to see that regarding bad tenants. Any idea how long on average a "C" class takes to get tenant in a decently sized college town?

Hello,

I am in the process of purchasing a quadplex in a C class residence. This would be my first investment.

Area is low income, 2br/2 bath run anywhere from $650 to $800. This mostly seems working class not individual such as prison warden, school teacher, grocery employee. However, that is not to say there is no crime. There have been reported theft every now and than. 

My concern is that I recently found of from the seller that one of the rooms is facing eviction due to not paying. Apparently the tenant has been arrested for what ever reason and failed to pay rent. My concern is finding a tenant in a timely manner. I have a property manager lined up who works in the area and rented one nearby with the same price point and found a tenant in 2-3 weeks. They screen pretty hard too, 3x rent, background, etc.

My concern is I have seen alot of zillow post in the same subdivion at similar price and even lower that have been on the site anywhere from 15 day to 2 month. Should I be concerned?

What can I do to make sure I find a quality tenant in a timely manner? How can I ensure my PM is on top of it? May they screen to hard for the area? Referrals? 

@Jonathan Bombaci That is a great point, would I live there to tell if it is rent ready. And I'll check out my competition. I'm a little concern because there are a couple of units up for rent with cost less and more than my rate.

@Anthony Dooley Yeah that is true that I will live in one and can increase the rent. Yeah if they are offering by all means!

@Michael Walton WOW that is very unfortunate. Sounds like a nightmare to navigate through that on your first deal! Especially at closing too. I see now that vacancy are a pain and so are inherited tenant too. If you don't mind me asking what type of area is your in? Mine is "C" class so fairly lower income area. Definitely, not somewhere one of my peers would stay (fresh engineer from college). I am concern it may be hard to find renters cuz I see a couple that have been on the market on zillow for 15-30 days.

Hello,

I am closing on my first deal a quadplex in about a week. I am very excited. However, if found out that . Units will be vacant. They are eviction both this week. One unit was expected to be vacant, I am using fHA and this unit had a tenant that was known for not paying rent on time. Other one has been arrested and only been there for a month. Area isn't bad but not great, c class. Now the seller said that they will clean both units and get them rent ready. I have final walk through next week. Is there any way I can make sure they're rent ready beside asking? Are they required to even make it rent ready. This is a FHA loan so I'll live in the worst one and make repairs if necessary.

After closing my PM will start looking for applicant and lost picture. My question is has any one been in a similar situation? Any advice? How can I make sure it really is rent ready at closing. When I buy the property do I get the evicted tenant security deposit and can I use it to make the unit rent ready?

@Matt M. I considered managing myself. But, I am constantly out of town for work. I got PM quote at 8% rents incoming. Any advice on PM?

@Dennis M. Absolutely, I will question every deal. If you don't mind me asking what are goods # for a 4 plex?

@John Warren Exterior is mostly brick with some wood covers. Expense 2340 includes 

Morgage ($987)

Insurance (200)

Taxes ( 212.77)

Capax (264.03)

Repair (147/month)

Vacancy (235)

PM (294)

Utilities is paid by tenant

Roof is about 5 years old. Relatively newish.

Building is 1981, and 4500 sqft