All Forum Posts by: Tara G.

First, congratulations on being a really smart teenager!

Remember, if an associate in the listing office is showing you the property, they are representing the seller, NOT you. Ideally, you should have your own agent. You are not going to save any money nor can you expect a reduction in the price, because the seller has to pay the set commission anyway, which the seller's agent gets to keep entirely.

The seller's agent will be trying to sell you the property, so take everything she/he says with a grain of salt. Do your own sleuthing. Look up the county records for comparables/ liens/ easements on the prpoerty.

Good luck.

Typically section 8 units are not difficult to rent and have a waiting list. Best way to access your local market is to call a nearby section 8 apartment complex and ask if they have any section 8 units available.

If you know the section 8 process, it will not take your more than a month to get it going. I am assuming that you are going for vouchers not any other form of subsidy (debt or insurance)

If you want to lease the equiment ( like MacGray, CoinMach), they like the agreement with 50/50 split of revenue. Owner is responsible for space and utility (big expense). If utility expense is over 25% of total renevue then you have a problem. They are responsible for maintenence and collections. For obvious reasons they like long contracts upto 5yrs.

You can certainly negotiate the agreement to increase the % of revenue in your favor. Also, make sure that washer/dryer have a counter. Otherwise there is no easy way to determine the exact revenue.

Rye

Hello..

We have been in the higher rent SFH market for the last couple of years. Moving into the lower rent apartment unit model by buying a 33 unit Townhome complex.

These townhomes are 24 years old, and frankly, more than a little dated. The architect in me wants to redesign them and make them nicer looking and maybe add an additional bathroom to the 3 bedroom units (currently at 1.5Ba). There is easy space to do this- huge walk in closet in the Master. Replace wood siding with vinyl and wash and paint the ugly brown brick white. That would make them look brighter. All told, bottom line is 3000$ per unit.

Rents in the area support a 100$ per month per unit increase, but only if we spruce these units up.

My problem is, the state they are in right now, I wouldnt want to rent them for myself. Any improvments we made to our SFHs were paid for in a month's rent... Here, we'd have to wait 3 years for it to pay for itself..

Am I chasing a fiscally irresponsible dream?

Rye :violin:

all-cash thank you for your feedback.

It is an apartment complex with 35 units. It has a turnover of approx 28 per year. I trust most of the numbers but for the "Supplies" and
"Other Maint/Repairs".

Are these some open category to show costs for tax purposes?

Operating & Maintenance Expenses $0
Supplies $7,647
Apartment cleaning $1,438
Carpet cleaning $1,847
Extermination $200
Grounds $3,979
Painting $3,979
Plumbing $513
Other Maint/Repairs $14,759
Maint Rent Free unit $0
Garbage /Trash Removal $2,413
Heating and Cooling Repairs $1,925
Maintenance equipment rental $0
Misc operating expenses $0
Main & Oper Payroll
Total Operating & Maint exp $38,700

I have been renting single family homes. This is my first foray into a multifamily home. I have not spent more that 5% on maintenance on
single family. I do fix most of the minor leaks and repairs on my own.

Is the 16% on maintenance in the proforma un/reasonable?

Thank you for your feedback,
Rye
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Gross Rent Income = 100%
Vacancies
vacancies apts
move in concessions
skips and bad debts
Total Vacancies = -10%

Laundromat
Tenant Charges
Application Fees
Cleaning/Damage/Paint
Late/NSF/Legal Fees
Forfeits/Lease breaks
Pet/Key/ID fees
Total Other Revenue = + 0.8%

Management Fees
Manager Salary
Manager Rent Free Unit
Legal Fees
Auditing Fees
Bookkeeping and Accounting
Management Total = 8.2%

(All utilities are paid by tenant. This is to cover common areas)
Utility Expense
Electricity
Water
Gas
Sewer
Total Utility Expense = 3.1%

Supplies
Apartment cleaning
Carpet cleaning
Extermination
Grounds
Painting
Plumbing
Other Maint/Repairs
Garbage /Trash Removal
Heating and Cooling Repairs
Total Operating & Maint exp = 16.6%
Real Estate Tax
Property and liability insurance
Total Taxes = 8 .1%

Net = 57.9%