All Forum Posts by: Steve Hilborn

Congratulations Emily, I've purchased 2 4plexes in Frankfort in the last year as well.  Naturally, I'm curious who your PM is, and how you like them over time, and how this property performs for you in the long run.   

Julie,  I'm a new investor in Oak harbor.  I would eventually like to be in buy and hold, but the market seems currently overpriced, so I've been looking at flips.  Although I haven't done any yet, I have lived here on the island most of my life and could put you in contact with a few contractors I know.  Might be a place to start.  

--Steve

I'm looking at a 6plex in western Washington.  I seems to have a bit of a bug problem.  I have zero experience with bugs, but this looks pretty bad.  Can anyone tell me how big of a problem this looks like? Should I run for the hills or try and get it for a good price?  Is it likely that the entire building looks like this under the siding or are these type of things pretty localized. Help!

Hi Deanna, I'm a new investor in Oak Harbor.  I'm currently working on acquiring a multi-family, but I have been going to the courthouse auction when I have time.  I don't have a lot of wisdom to impart, but I would be glad to share what I have learned so far.

--Steve

Hi BP, I'd love to get some input on this deal I'm looking at.  

Sellers 2015 numbers

Gross income  $176944  (current rent rolls work out to $188,340)

Insurance  $3733 (seems low)

Taxes $13569

W/S/G $37386 (rates for sewer are going to increase the next couple years)

Repairs $23876  (some cap ex seems to be included in here)

Misc  $4118

Other numbers not included by seller

Vacancy  $5308  (3%, its almost 0 in our area right now)

Management $14155 (8%)

NOI $72910

Asking price is $1,550,000  too high right? Cap rate is about 6 here.

Now the rents are really low for our area, the building is being self managed by an out-of-town owner.  I talked to a local PM company and they said current market rents would work out to $251,000 in gross income.  

The owner bought the property 10 years ago for the same as they are asking today, so I think they might prefer to sit on it rather than sell for below what they paid.  Is it worth worth overpaying based on current numbers knowing that future rents could be substantially higher with minimal additional costs?  Or just offer based on 6% cap ($1,215,000) and see what they say?

The building was built in 1970s looks to be in decent shape. B neighborhood.

Thanks in advance,

--Steve

I'm looking at an auction house that will need a complete remodel.  Does anyone have an idea on cost?  I'm located in Oak Harbor, WA.  Specifics:

2000 sq ft

4 br 2ba

Needs;

All new appliances, including a furnace

Possible layout changes (move a wall or two)

New electrical and plumbing

All new drywall, floors, fixtures, doors, cabinets, countertops, etc...

Not looking at anything custom, but a standard finish.

Roof and siding are newer and may just need some minor repairs.

Any ball park figures?

I love this thread.  Quite interesting.  Let me get your opinions on this.  So if we enter a period of deleveraging and deflation, the fed will most likely either employ some form of NIRP or QE?  But if inflation then gets out of control, can they really raise rates substantially without blowing the national budget on interest on the debt?  And in the long term is there any other way of reducing the national debt substantially other than inflating it away?  Given the track record of the fed, am I wrong in concluding that the likely hood of inflation is much greater than deflation?

--Steve

I'm looking at a duplex that's in a small town (700 pop) about 30 min away from major civilizations.  Seems to be made up of commuters and small town type people.  The building is 100 years old, but the owner's almost completely rehabed it and then apparently ran out of money and are getting a divorce.  I don't know the rental market in the area that well, but I put an add on CL for $800 and received 9 responses in 3 days.  So here are my rough numbers.

Purchase Price 90K

Finish rehab est. 10K

ARV 130K

Taxes                     900

Ins  est                   600

W/S/G  est             1000

Rents est              1600-1700

Questions:

1  what should I estimate for repairs/cap ex on a rehabed 100 year old duplex?

2  how concerned should I be that I don't know the town very well and it's so small?

3  how do the numbers look?

Thanks in advance for your input

--Steve

Kyle, the property along with 4 or 5 other multi-family properties are part of a chapter 11 bankruptcy sale, so I don't think seller financing is an option.  Do you think it's worth talking to the bank that holds the notes on the properties to see if they would finance it? It would turn it into a performing loan for them.

I'm looking for my first investment property, and I've found a 6plex with pretty good numbers in my area, SFRs don't seem to compute here.  I have enough cash for a sizable down payment, but I have a pending lawsuit on another business that I'm a partner in that I'm worried will scare off a regular bank.  Does anyone have any suggestions on how to approach this with a bank or what other financing alternatives might be out there?  Thanks!