All Forum Posts by: Steven Juelke

Christian,one other thought , when you ask for operating statements to evaluate the numbers , forget about their (or their realtors) projected income statement, ask for an actual accounting of all income and expenses from the last 3 years, preferably the schedule from their annual 1040 tax filing , then note some of the expenses that you would not have, such as auto expenses , excess legal and accounting fees that you may not have if you did your own books and evictions etc. You will find some owners maximize their expenses a little much while minimizing the income ( mabe they dont report tenants cash rental payments, you should of course, since its illegal not to ) this way you will get an accurate financial picture rather than a puffed up projection. The value of an income property is based on the net operating income or CAP RATE and more times than not 2-4 unit properties will be priced far above a reasonable cap rate when you use the real income and expense numbers vs the projected ones they are showing to justify their asking price. Learn the basics about CAP RATES , NOI, ROI etc. Good luck.

Christian, you are on the right track , you should be able to live free in a 3-4 unit, a duplex will be a little tougher but possible with the right deal. (depending on your market)Try to avoid an over under situation if possible, unless newer with sound deadening between the units,  i have  owned many of these and renters always complain if they hear the tenant above or below.Separate utility metering and thermostats eliminates a lot of tenant complaints also. Be wary if the units are basement or semi basement, darn minn summer rains can get them wet and musty , then the  tenants move,  wiping out your game plan financially, ask me how i know, could i be from minnesota ...ya , sure ,you bettcha! The basement is a great place for a coin op laundry that will give you some weekend fun mon(ey) Also stay away from old (pre 1955 prox) buildings with plaster and lath that have baseboard (radiant) electric heat unless you see the electric bills and they are reasonable. The higher the heat bills the lower your rents will have to be to compete with newer easy to heat apartments.Also when these same old buildings have the old hot water radiators tenants will complain about being too cold or hot unless they have their own thermostat.Shop around a lot before buying... Because the bigger money tends to to go for larger units and 2 -4 units are usually in less demand you should be able to find a motivated seller with a good price , then get them to give you as many concessions as you can,  so if you are getting a loan your down payment will be minimal.Last but not least get a good " LANDLORDING" book and never let the tenants know you are the owner, you will always need to be able  tell them you have to check with a higher authority when they ask for "stupid things". I hope my past mistakes  can benefit you. Good luck. 

Im a seasoned real estate professional doing SFR deals that sometimes produce a carry-back note/mortgage.Im looking to connect with a principal buyer interested in high return deals that may not fit the institutional buyers "cookie cutter "profile ( so no brokers please) I currently have a performing note in Missouri and one in the works for Pennsylvania.