All Forum Posts by: Eric Hildebrand

Technical accounting question:

I hold nine SFR rentals - I have a Holding Co. LLC and an Operating Co. LLC. with an operating agreement between the two Technically, Hold Co. owns the properties, and Op Co. manages, although I need to do better at segregation of duties.,

I just signed up for basic Buildium and am trying to set up the banking structure (which should mirror what I "should" have been doing).

Can anyone speak to how the banking relationship should be set up for a "property management" company and its owner?

I am a CPA by trade so can handle the technical junk if anyone has ten minutes to spare for a phone call? I have done my research but have a few questions. Feel free to post but an in-person call is helpful.

Please DM and I'll give you my #. Happy to buy a social distance drink for those Tampa Bay area folks who can afford 10 minutes to hash out my issues.

Thanks in advance!

Investment Info:

Single-family residence other investment.

Purchase price: $95,000

Cash invested: $80,000

Contributors:
Ingrid Poole

Full renovation. New roof, plumbing, electrical, updated kitchens and baths.

What made you interested in investing in this type of deal?

We want to build our investment portfolio by renovating homes then refinancing to hold.

How did you find this deal and how did you negotiate it?

Off-market through our wholesaler

How did you finance this deal?

Line of credit

How did you add value to the deal?

Full renovation. New roof, plumbing, electrical, updated kitchens and baths. Interior paint, new drywall, texture, flooring.

What was the outcome?

Overall

Lessons learned? Challenges?

LOTS of challenges. Our main contractor got arrested at one point and we had overpaid (of course). The electrical panel caught fire. It seemed like everything that could go wrong, went wrong. The timeline and budget went out-of-control and we should have looked into refinancing way sooner to reduce our carrying costs. Even after we got the renters in, we've continued to have issues (plumbing lines swapped - under warranty; electrical in back of house didn't work - we never checked back there and didn't know there was an issue until renters moved in; bought used appliances and had several warranty issues and just had to buy a new dishwasher.).

For my wife, who managed the project, it was a huge undertaking and now we're doing 2 more this summer. We must be gluttons for punishment :) 

Lessons Learned: Don't put all your eggs in one basket and be a lot stricter on the budget and timeline.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My wife, Ingrid Poole, is a real estate agent and manages our rental portfolio.

Hey all - this is my first analysis of a large multifamily deal. The property has been listed on & off for the past 5 years and hasn't sold, which tells me it's been overpriced each year it's gone back onto the market. Currently listed at $850k. 

View report

*This link comes directly from our calculators, based on information input by the member who posted.

@Matt Foster - I'll have to factor in some repair costs as you and @Joshua Sclafani state.  I really appreciate the feedback - that's why I'm reaching out.

I'm not really in this to lose money for a couple of years - I love your point about the newer construction impacting appreciation on older homes. New construction probably also puts downward pressure on rental rates for older properties too. Solid point.  

I like the area because there is appreciation potential but I'm not looking to buy into a property that I struggle to make cashflow. 

I'll double check the rental rates - if anyone has any recommendations on best approaches to researching actual rental prices in any given area, that'd be fantastic.  I'll look at previous forum posts for some thoughts but if the topline numbers are off, that blows my entire analysis up. Even if the other estimates are reasonable, which I believe they are, then it really comes down to rental income and what I could reasonably expect for such a property.  

@Tyler Wehrung - The purchase price is $130k - running comps now for ARV but would expect at least $150k - no significant repairs needed. Goal is buy and hold. I'm not sure why the link isn't working for you but I'll look into it!? Thanks for the response.

@Michael Key - I definitely don't think that $54 dollars/month or the reported COC is a "good deal." I guess my big question is what the hell am I missing? Are my estimates too conservative or is that just the way it goes when you look at these prices? I suppose being certain of the rent prices/comps will make a big difference in the assessment.

The property is in Wesley Chapel which is growing pretty quickly. Not many properties in the area for that price. I bought my personal residence there for $118k FSBO three years ago (appraised at $103k) and that was practically the only property I found at that price point. My residence appraised a few days ago at $145k. The subject property is 300sq/ft bigger with an extra bedroom compared to my residence.

Hi everyone -

I wanted to see if you could help review this analysis.  A quick shout out to @Ryan Sanders for the use of his tool (I love it and can't wait to use your updated version).

So, the attached property is for sale at quite a good price relative to other sales in the area but I'm struggling to justify the return on investment.  My instinct tells me that the price is right and that it's a good buy but the numbers tell me a different story. 

I was wondering if anyone would look at my analysis and help pick it apart for both the positive and negative aspects of it (particularly if you're in the Tampa or Wesley Chapel area and know the market).

Thanks for all your help.

Eric

Check it out here

*Edit to add:  I'm not looking to put lipstick on a pig - if it's a bad deal, it's a bad deal and I'm ok with that.  I'm just surprised.  Note that I think my rent estimate is low for the area but rent.com was showing $1,350 for a similar sized 4/2 so I went with worst case.

Welcome Andrew - 

I'm pretty new here as well but it seems like a great community.  Hit up some local events too... they can be quite educational.

@Beau Barry - it was in 7 Oaks off of meetup.com.  Wesley Chapel Real Estate Investors Meetup.

If there's anything that I can do to help coordinate, please let me know.   I went to a meeting in Wesley Chapel yesterday and thought it was very well done.