All Forum Posts by: Scott Anderson

@Helena Wu These are definitely more "rural" areas of the Huntsville market. I would expect that rents are lower in these areas and it may be more difficult to fill vacancies. Hazel Green has the most growth of the areas you mentioned. I wouldn't say they are bad areas when it comes to crime and those type things, just more rural and less population in those areas.

In the grand scheme of things this isn’t a “large” apartment property. Management isn’t going to live on site. Management will likely be 5-10%. Probably 8%.

This will vary from property manager to property manager I’m sure. However, generally the management fee only includes collecting rents and handling the contractors (lawn care, repairs, snow removal, utilities, etc.) they will generally pass-through these expenses to the property owner.

Bobby Walters The Decatur market is very stagnant and hasn’t had any new development in over a decade. Most apartments were constructed in the 1980s when there were a lot of plants being constructed along the Tennessee River. Apartments sell for $30-35k a unit. Cap rate should be in the 8s due to lack of expected rent growth. If you have any questions regarding a specific property in the Decatur market feel free to PM. I know the market very well.

After real estate taxes before income taxes and does not include principal pay down

Definitely sounds like an interesting deal. I’d need to know a lot more to tell you what to expect. Your all in costs look like $33k a door. Would be interested to see what comps are for the area but a fully renovated 68 unit in Houston area for that price is probably a very good deal (completely guessing). No easy undertaking though so hopefully your expertise has led to a great opportunity.

Hey Bill. We actually work at the same national company so I know exactly how you feel. We often sit around wondering “if they can do it why can’t we?” All the time. I’ve recently branched out and led some partnerships that bought small MF and am a limited partner on a syndication. Appraisal work definitely comes with the benefit of being very educated on real estate, financial statements, etc. but often in my experience leads to knowing too much, being too conservative, and holding yourself back. Just have to fight through that and do a deal!

Got a 6 unit inspected for $500. Was in Alabama though and I’m sure it varies based on region.

If the rental income from the long term rental won’t cover the loan after a refi, why don’t you sell it and 1031 into a multifamily?

I’d assume you’d have to convert the property into condos (wouldn’t be without it’s costs for legal fees, etc.) but then you could sell the units individually.