All Forum Posts by: Ronda Bogdanovic

Thank you. I appreciate the advice.

I'm starting a property management company under a local broker. I am negotiating the terms of our agreement and I'm not sure how to structure our partnership. Should I give him all of the contract fees and no percentage or a 10% of the gross. How are others doing it? I know it would be best to get my own broker license but he brings a lot to the table with connections and referrals. Any advice would be appreciated.

We recently listed for sale an investment property with 3 units cash flowing $2700 a month. All three tenants were 6 months into a 1 year lease. When we notified the management company of the impending listing we had to buy out the remaining 6 months of their fee and take over the management. There was a clause in our agreement that stated we had to list the property with them or buy them out. The leases were in the name of the management company. PM Co. sent a letter to all tenants notifying tenants they could be released from their leases. No where in our agreement or lease does it state this is an option. Then they proceeded to place the tenants in other properties they manage, some they may own. The buyer has applied for a commercial loan based on cash flow.  Does anyone know the legalities of this? We have 9 other properties currently managed by this company. They claim they have to protect their reputation and a sale upsets the tenants. I can understand that and we agreed to only show the property upon inspection and not disturb the tenants as much as possible. It seems like they should be just as concerned with their reputation with the owners that pay them.

what cap rate should I look for?

One last question actually two 1. Do I include the payment on loan in expenses? 2. Am I correct with the 8% cap rate? Thanks again!

Thanks guys. I'm canceling the appointment. I'm a newbie , I looked at my notes from a REI meeting and according to those I want no less than an 8% cap rate. That means this property is only worth $512,337 to me. I appreciate you walking me through it!

Hi everyone, I need help figuring out the valuation on a multi unit apartment complex. It's a 26 unit built in 1955. 14 units have been remodeled at a cost of $100,000.  Asking price is $1,350,000.

Income from rent is $12,332 a month. Taxes are $8167 a year. Insurance is $987 a month. Owner pays for the water. Grounds maintenance is $500 a year. I'm looking at it tomorrow but after looking at the financials I'm thinking it's not a good deal. 

The numbers they gave me are

Total Income  = $76,792

Total expenses= $61,161

Net income=  $15,630

They show a interest payment a month of $3633 but are not accounting for any other loan. Also they are paying a management company $1092 a month. I would manage it myself.

What do you think? Pass? Hoe should I figure the true value? Do I base it on cash flow only?

Thanks in advance!

Ronda

A foreclosure auction is a great way to find a deal. My advice is do your research on the property, get the title search BEFORE going, look at the page and book numbers and make SURE it's the first that is foreclosing and don't let an IRS lean scare you. Best of luck!