All Forum Posts by: Ryan Dunne Ewing

@Todd Dexheimer I’m building equity in it quickly. It’s cash flowing heavily. I have surplus capital to throw down on the second lien. Second lien will be paid off in the next 10 months.

@Todd Dexheimer

There’s a second lien holder involved (I borrowed the down payment). I have to pay that off first before I can refinance.

I can do this over and over, yes. My buddy and I work on the property. We don’t hire our contractor help.

That being said, I am hesitant to move so quickly though. I need to pay down some debt first. Ensure proper cash flow and keep an oh oh reserve fund in the meantime. Then, when the time is right (and the property is right!) I will make my next move through refinancing the property.

I guess I just play the waiting game for now.

Okay this is all great advice. Thank you all. Couple comments re: over-investing in the property.

I bought the 4-unit property at $209,000. It is five houses from the state capitol building; it is most definitely in a desirable area for housing and young professionals.

The money spent on the house includes the hard stuff, entire new roof and new hvac units, etc... the stuff that needed to be done. I’m no slumlord.

There are no real comparable comps to my property because no one has really remodeled the multi family units in town. They are all the 1970s brown wood and yellow tile dated type of deal. You all know what I’m talking about.

So a 14% cap rate is basically useless because I have 4 units instead of 5? If that’s the case, then I’ll just sit and collect rent lol woe is me!

@Jay Hinrichs thanks jay appreciate you teasing the numbers out. Makes sense

@Jay Hinrichs I’m a licensed attorney so costs would be less. Where are you getting 80k in costs from?

@Jay Hinrichs

Rent more than doubled from $500 to $1085.

@Chase Louderback thanks for the advice.

Not to sound cliche, but there are no reasonable comps for my property around here. No one has remodeled multi family in my area and increased the property value like I have done. All of the multi family currently around are what the house was like when I bought it (run down, dated, total garbage). Besides large ant farm community housing, I’m literally the only game in town.

My units are brand new stainless steel kitchens, butcher block countertops, LED lighting, etc on and on it goes.

That being said, comparable cap rates for multi family (not updated) are selling for around 10.5%, and I purchased the property at a 10% cap rate.

The commercial lender at wesbanco wanted to use a cap rate structure in determining value of the property.

I’m one year in to owning my 4 unit multi-family property. Bought it for $209,000.

i have dramatically remodeled the building in under a year and doubled the gross monthly rent income.

As of right now I have a cap rate of 14%. Remaining remodel costs and associated rent increases bumps the cap rate to 15%.

A commercial lender in my area (Charleston, WV) said they value property around a 10% cap rate, which would put the value of the property (subject to appraisal) at around $458,000.

Someone help me out. What do I do with this thing? There’s a gigantic delta in anticipated selling price and the money I’ve put into it. We’re talking about a $130,000 difference in just over a year! That would ghost my student loans and I could start all over! Maybe the flip and sell is a terrible idea? How can making 130k in under a year be terrible?

Then again, my cap rate is really high. Average cap rate is 9-10.5% here.

Do I try to refinance? If so, how does that work if I wanted to buy another building but I don’t have any liquidity (besides an oh oh fund for emergency repairs).

Or, do I just sit on the property, collect my rent checks, and hang out?

Thanks for any and all advice!

Thank you both.  Sage advice.  I will increase rent at the units to $750, lock them in for another year, and fix the exterior of the property.