All Forum Posts by: Scott Kelly

Originally posted by @Curtis Rouse Jr:

@Scott Kelly

Congrats on taking the plunge into the apartment community space. Based on the financials provided and doing some of my own analysis, it looks like a pretty good deal, I would just be a little worried about a 9% cap. The reason I say that is because this usually means the property isn't necessarily in the most desireable location (I could be wrong as market specific), but on the other hand you will be cash flowing from Day 1 depending on what your renovations are looking like.  It also helps that you are within driving distance and can check on what's going on. I like the value add play on this deal in regards to the increase rents, LR and RUBS you mentioned to implement.

With very little money to put into the deal, I would recommend trying to raise private capital or do a jv and partner with another investor giving up a portion of the deal. I wouldn't recommend HML for this deal especially with not as much capital because the int rate and points can get costly for this type of short term financing. I would recommend getting a bridge loan where the lender will wrap the renovation into the loan that will save you some money there.

If you need help putting together a financial package with underwriting (example on my website), please let me know as I have helped many investors free of charge. I hope this helps and let me know if I can be of any assistance!!!

 Thanks for your reply! I have heard a bridge loan mentioned before but I'm not really familiar with the specifics. I'd love to talk with you further about my options. I'll reach out tomorrow! 

Let me preface this with I am a newbie investor having only one SFR but found a small apartment complex that seems to be a good buy and seeking any advice I can get. It is not local to me but could drive to get eyes on the property. Lets get into the numbers: The property: 4 building 14 unit apt. asking $350,000 with 9.1 cap rate but I feel confident I could get it for less. Only recently full occupied by mainly college students. 8- 2br/1bth, 6-1br/1bth. Avg rent is $486.NOI @86% vacanacy and 54% in expenses (property management included) would be $31,706. Thats prior to debt service. My plan: remodel each unit as they come available. From the pics every unit but one I wouldnt want to live in personally. According to rentometer average 2/1 apartment goes for 700 in the area. So room for improvement there. As a room that previously was a laundry room but now a storage area. I'd want to get it operating as a LR again to bring in additional income. Water is currently paid by property management. If the numbers work get it submetered to have tenents assume their water expense. The problem: I have little cash to put into the deal.I recently purchased a primary residence and have a baby on the way. Should I get a HML or investors or just pass on the deal?

@Michael Pearse @Dave Foster Thanks for your replies! I failed to mention I put 20K down so I financed 175k and have made additional principal payments and only owe 161k on the property. It was my primary residence and escrow is included in my 1483 monthly payment. I'm still on the fence about what to do but ya'lls input has given me something to consider. Thanks again! 

@Doug Shapiro that is a good idea doing a 1031 if I find a better deal at a larger price. I did fail to mention I put 20k down and have thrown money at the principal to get my remaining balance down to 161k at the moment. I am currently leaning to rent it. Thanks so much for your input. 

Hey everyone, 

I'm new to BP. I recently bought a new house and have listed new old property for rent but I'm having trouble deciding if its my best option. I bought the house 2.5 years ago for 195k. I put 30k into remodel. I had it appraised 3 months ago to drop my PMI. It appraised for 255k. I have it listed to rent for 2100. My mortgage is just shy of 1500. From my understanding in Texas you can't take a heloc out on an investment property so I don't see a way to take my equity out to reinvest in a future property. So I tempted to just sell it and get the equity out to invest into a different property. I appreciate any feedback, thanks in advance!

Scott Kelly

Hey everyone, 

I'm new to BP. I recently bought a new house and have listed new old property for rent but I'm having trouble deciding if its my best option. I bought the house 2.5 years ago for 195k. I put 30k into remodel. I had it appraised 3 months ago to drop my PMI. It appraised for 255k. I have it listed to rent for 2100. My mortgage is just shy of 1500. From my understanding in Texas you can't take a heloc out on an investment property so I don't see a way to take my equity out to reinvest in a future property. So I tempted to just sell it and get the equity out to invest into a different property. I appreciate any feedback, thanks in advance!

Scott Kelly