All Forum Posts by: Bala P.

Thanks @Dmitriy Fomichenko

Thanks @Bruce M.

Appreciate it and good luck

Hello Bruce,

I am not taking sides and not trying to start a war but as far as my queries Mark and Dmitry both has been very responsive and helpful. But has not selected my sponsor yet. So far this is the first post I have come across unhappy with Mark. Always there are two sides to a coin, so blasting a service provider even before starting a relationship would certainly hurt his business and frequent posters like @David Beard has been successful with him.

I myself am looking at both @Dmitriy Fomichenko and Mark and I am not affiliated with Mark.

No offense and good luck and let us know who you went with.

Hello @Dmitriy Fomichenko , you bring up a good point. Is there any recourse if the original sponsor is no longer in business? are we left in the dark?

Carlos F., thanks for the invite. I am in the middle of a rehab, critical project at work and also shuttling kids around for summer camps and stuff. If time permits I will be certainly there.

Jon Klaus, thanks for the helpful thread as always.

John Evan Miller, thanks for keeping up with the thread. The original numbers I posted was before I visited the property. Not trying to argue but your previous post in this thread had an assumption of 20% down, 3.5% at 30 years which might not be practical for this property but I used that numbers which took the debt service to $6,687.12. The proforma from the seller had 10% vacancy already built in so I used the general rule of thumb of 50% to arrive at that number. But after viewing the property, yours and Jon Klaus' response realized expenses will be way over that rule and came up with $120,000 to be a decent deal. But the buyer thought I was crazy so decided to move on to the next one. Either he will realize soon or another buyer might over pay and soon find out. Anyway decided to not venture the black hole like Jon put.

John Evan Miller, thanks for the reply. I visited the property today and the rent is below market and the reason is there are some deferred maintenance I could spot and they own 32 properties in that area and have a full time handy man around. I could right away tell they had slapped lipstick on it and like Jon Klaus guessed this is definitely a black hole and cannot afford right now. Thanks for the advice everybody.

BTW John, apart from the condition of the property, why is this not appealing because with your calculation each door should cash flow around $140 which is pretty decent, don't you think or am I missing something? Just curious.

Uwe K., The $11,405 are the expenses from the owner, since this was word of mouth referral I have not gotten the breakdown or the comps yet. I have not comped it out yet. Thanks

Kris Patel, the appraiser value is $20k more now, other than the tax bill it does not mean a thing. Thanks for pointing out though.

Chris Sweeney, I see lot of good wholesale deals that look good in the paper in our area but 99% of them are manipulated numbers, your numbers are great though. Thanks for chipping in. I will offer the 50 times rent offer and see what they come back with.

Jon Klaus, exactly that is what going in my mind too. This certainly could be a black hole and am going to pass it but will throw out a number like Chris suggested and see. Atleast would get me back in track.

Thanks everybody

Hello all,

Had been away for a while due to other commitments.

Anyway today this property was brought to my attention through an acquaintance. Here are the details and would like your opinion on this.

- Quadplex in Richardson, Texas
- Gross Income : $27,600
- Expenses : $11,405 (Utilities paid by the owner, insurance and property tax
$4200, I think is little too much, almost two months of
rent, but this is Texas remember)
- Asking price $165,000
- Built in the 1960s

Using the 50% rule, expenses would be almost $14,000

So per unit calculation would be

Rent : $575
Expenses : $288
NOI : $287
Debt Service : $185.49 (Based on 25% down, 6%, 30 years asking price)
Cash Flow : $101.50

Calculated Cap Rate 8.8%

The property is 100% occupied, and owned by an elderly couple with several other units. Considering the age of the property I am little skeptical how much deferred maintenance it holds. I have not viewed or started any conversation with the owner yet. The property is in a blue collar neighborhood.

To achieve a cap rate of 10% or above the price has to be $137,760 or lower.

What do you all think and how much should I consider without too much or a too low ball of an offer?

Thanks

Congratulations Jon Klaus, the more you benefit is good for all of us who follow your posts.