All Forum Posts by: Serge S.

Yes, it was a 5plex, 2 1 bd apts.

We are starting to get into multifamily investing. Here in AZ, all the numbers seem to work. Purchased the first one early this year. $42k for a 5plex with 2-3bd units, 1-2bd units and 1-1bd units. Got it up and running within a month and all units rented ($2,300 gross income) within a month. That experience went so well that we bought a few more in the same complex. Now we are dealing with tenant headaches with this being a low income city with the state penitentiary as the primary employer. Vacancies are high, good tenants impossible to come by, nobody can afford the security deposit and major damage to the units. This isn't necessarily a "ghetto" area, just lack of tenants with cash. We sold two of the three at a profit with one left but the multifamily experience has left a bad taste in my mouth.

Question of the day - do you always take the higher returns for more management headache, stay in target neighborhoods or just chase the best deal? I know there is no straight answer but I'd be interested to hear some success and nightmare stories with people and their [b]first multifamily experience.

Thanks J! New to the forum, investor in central AZ for 2 years now. I just stumbled upon your vault and the spreadsheets and contractor agreements are very helpful.

Regarding the 1099s, I'm just curious to hear some real world fines that have been slapped by the IRS upon smaller investors. I know a lot of people here use labor that may or may not be legal and its not easy getting contractors to fill out a W9. One contractor even told me he would file a W9 with bunk information. Guessing at that point its not the owner's responsibility to verify information?

I know a few investors that have never filed 1099s with contractors. They claim to either play dumb (thought it was a C-corp) or just never file. One guy has never filed in over 10 years and never a peep from the IRS. I'm wondering what real life experience people have had with the IRS? Anyone get called out, fines, etc?

So in this scenario would you actually insure it for $600k or $100k? Right now there is no point to build in AZ at $100/sq foot when you can buy at $20/sq foot. What is the right policy here?

It is an ACV 80% coinsurance policy I believe.

Trying to take this all in as it actually applies to me right now. I just bought a 5,500 sq foot 4 plex in AZ for $29k (it needs about $30k in rehab). When I went to insure it, Statewide recommended a replacement cost of $$600k for $3k yearly. I took a coinsurance policy for $800 using $120k as replacement value under the assumption if the building burns down, I take the money, clean up the debri and move on to the next. Right now, it makes no sense to build anything at $100/sq foot when you can buy at $20/sq foot. Why then would I insure to a value when I would not rebuild? Are you suggesting that the policy would not pay out unless I rebuilt and I'd be left with no insurance. Please explain.

I'm looking to upgrade my CPA with one that preferably has an expertise in real estate. Anyone have a good CPA they can recommend??

I use Buildium. There are a ton out there, I'd say the two best are propertyware and buildium.