All Forum Posts by: Anthony Deringer

@Darin M. Sorry for my terrible response time!  I actually close on the house today.  I am excited to get started on another rehab project.  If you are ever in San Marcos, give me a shout and I will give you a tour.

@Ronnie McClain Thank you for the info.  The closing has been delayed a couple of times, but now I am getting serious about getting the foundation work done, so I will be contacting Trinity.  Thanks again for the reference!

Darin, thanks for the recommendation!  I will check in with them.

Can anyone recommend a good foundation company in the San Marcos area?  I am working on a deal that may need the slab to be raised and supported.  Thanks for your recommendations!

Great Brice!  As soon as I get a few people who are interested, I will put together an email and send it your way.  

Thanks for the response!

Does anyone know of a REIA that is focused on the area between Austin and San Antonio? I am interested in networking with other investors in the Wimberley, San Marcos, Canyon Lake area. Anyone know if there is a club in this area? Anyone interested in attending if we started one?

If you are investing in this area, you know that we have our own set of challenges and sometimes the San Antonio and Austin clubs don't allow us to connect with people that work in our area.  I am interested in getting a little more local and talking to people investing in the same areas that I am interested in investing.

Reply if you have a recommendation or are interested in getting something started.

Thank you all for the tips on expanding to a 5 unit.  I will now be spending a significant amount of time next week doing the research you all have suggested.  I will report back when I have something.  

Ron, it sounds like it might be quite a bit more expensive to add on than I was thinking.  It is a slab, but it does not appear to be sloped.  I will double check.  Thanks!

Elizabeth Colegrove.  I appreciate the thought, it is definitely something that I will have to consider.

Greg, I think the numbers you give would be an almost worst case scenario.  It is good to know that I would still have some - although not great - profit in a scenario where the 65% rule is applied.  Thanks!

Joel, I don't believe so.  Something to double check though.  Thanks!

Anyone else have an opinion on the property as is, without the addition?

Thanks for your feedback!

@Dave Savage, thank you very much for that information!  I will check with them this week.  

I am considering buying a deal with the following numbers (provided by the seller):

Current purchase price 309,000

Sq. Ft. Actual Monthly / Actual Yearly

Unit A 1000 / 12000

Unit B 775 / 9300

Unit C 885 / 10620

Unit D 575 / 6900

Total Rental Income 3235 / 38820

Vacancy (5%) 162 / 1941

Gross Income 3073 / 36879

Management (8%) 259 / 3106

Insurance (estimate) 100 / 1200

Maintenance (5%) 162 / 1941

miscellaneous grounds, well, septic 50 / 600

Taxes 384 / 4603

Total Expenses 954 / 11450

Net Income 2119 / 25429

Cap rate @309,000 = 8.50%

25% down 5.5%IR 30 AM 1273 / 15276

Cash Flow 846 / 10153

Cash on Cash (ROI) 13.50%

Currently the property has the four units listed above and it has a large unfinished garage.  My plan would be to add value to the property by spending 20-25k finishing the garage and adding another unit - most likely an efficiency ($575/month).  Most of the money from the added until would fall to the bottom line each month, but lets just say only half would become net income.  If I sold the property at an 8.5% cap rate it would make the property worth $339,000.  So my questions are:

1. Do these number look reasonable?  Anything you would add?

2. My understanding is that going from 4 unit to 5 until allows me to increase the value of the property based on cap rate.  Is this true?  Are there legal issues I should be considering when increasing from 4-5 units?

3.  Would you do this deal?

Thanks in advance for your thoughts!