All Forum Posts by: Dean Hulsing

I have a 9 units and I recently finished a property that I would like to sell.  However I am sure that I would be able to rent it quickly and I feel very confident in the improvements that I made in order to make a great rental with very little capital expenditures.  The home has 4 bedrooms and is in a C+ to B- Area.  I have approximately 75% of the value of the property invested and it has been on the market for about  one month now.  I feel that I am just holding on and I want to move on to the next project.  I was just wondering how long you would hold a property that you feel was listed at a discount.  I keep thinking that I could always sell the property at a later date but the area is probably not going to appreciate in value.  I think that it would take me about 8.5 years  (about 100 payments/ months)  to receive the amount of payments (gross) that I have it listed for.  If you could shed some light on this subject I would be very appreciative.  Thank you for your expertise.

I have looked at invested with Mid South Homebuyers.  The proposed cash flow appears to be good but I think that the numbers seem to good to be true.  Am I just being pessimistic or have  I just found a great deal?  please let me know what you think and if you have good or bad experience with them.  Thank you!

https://www.yelp.com/biz/mid-south-home-buyers-mem...

I was doing some "internet research and checked this out on Yelp.  Not able to make much out of two reviews but it is something I thought that I would add to this forum.  Hopefully it helps.

I really think that this depends on what you know about the repairs that have to be done. (ie..  you have three bids for the work to be done at $5K and they are willing to give you $10K in discount then it makes sense)   Not enough information in your post to be able to answer the question.   I would not go into the deal unless you have your own estimates from trusted contractors.

 I think that including the VALUE ADD  is essential in determining the long term play but the loss revenue has consequences also.  I believe that an overall improvement in the complex and the common areas will be a better place to invest than just one or two of the apartments.  I think that this will be done as there is turnover.  I received the last expense statement today and they are in the middle of a major remodel on one apartment.  The other units are in good shape and very clean but this could be our chance to impress under new management.  I look forward to closing before the remodel is done so that we can get in and get some of that done to my standards.  I may be optimistic compared to some other investors but I think this is a good deal!  I probably could find a better deal but with the location, my personal abilities and the ability to improve these places I feel that it is time to move forward.  It is up to the banks to approve me!  I will keep posting on here the best that I can.  I truly appreciate all the input.  BP rocks!

@Joel Gabelman There are only about 5 that have been long term tenants (2 or more years) and the other 10  have been within the past couple of years.  Currently there is one unit that is being rehabbed and should be finished prior to closing.  2014 was the worst year of the last 3 years and this year most 15 or 16 of the units have been rented with One year leases.    I will try to put the current numbers (500 X 8- 1 bed) (550 X 8- 2 bed) through your above evaluation.  Here we go....

PGI  = 100,800

Less Vacancies  = -12,600   (this is at 14/16 rented)

EGI= 88,200

laundry= + 2,400

less Operating expenses = -38,795  (This is the average for the past 3 years)

NOI: 51,805

This is Good but I think that we can make it better.  I think that the investment stands on its own right now but if we can make a few low cost improvements and a few incentives then we can boost that yield!  I will keep you all informed.  It is now up to the bank(s) to see if we can get the financing approved !  I will have to wait an extra day!  Bank Holiday on Monday.

Thanks for the different perspective.

@Vishal Gadhia I will check into using a property Tax attorney.  Are you saying that I would get the refund even if I did not own the property yet (if they file it for the two years)?  That would be about 4000 bucks!

WOW!  That is a whole lot of money!  Who's fortune are you building?  I would definitely follow the advice of @Matt Motil above!  Good luck!

@Fred Heller The deadline for protesting the taxes is within the next two weeks.  The deadline would fall just prior to the date of closing so I would prorate the amount to the date of closing and save the $3600 on the first year as opposed to having to wait a full year for that to happen.  I believe that the personal property I mentioned in my first part is all personal property that CAN be removed from the units without damaging the units.  The exception to this would be the carpeting and the lighting fixtures. 

@Kyle Hipp The reason that I would want to lower them now is because of the deadline that I have to be with in regards to the property Tax of this county in IL.  I think that it would benefit the seller if they protest them but I do not think they are managing the property up to the standards that I think are necessary for maximum return.  

@Roy N. The property is in a good area, It is adjacent to a multi-million dollar recreation center, run by the park district, It is also within a few miles of the largest employer in town.  It is located on a relatively active street, well maintained street with Individual Garage parking. Therefore the tenants that are renting at this location seem to be at least a class "B".   I think it is difficult to judge a tenant by their outward appearance and I have not gone through the lease agreements yet so I don't know where they work, who they are or much of anything about them.  I should know more as I go through the process in more depth today.  Another jewel of information that I found, last night I looked at property taxes and past sales.  The property was purchased in January of 2007 for 590k. I think that there just seems to be more and more that we have to look at and I don't want to make a mistake about taking on something this big but I feel like I do not want to miss an opportunity either.  I think that every point that people have made especially all the comments on this blog have been and continue to be made with my best interest and to protect my decision.  I sincerely appreciate the concern.  I feel that all I do is keep asking more questions and I am not making forward progress on this project.  But I keep tell myself "NO Deal is Better than a BAD deal, right?"    I know that there are other complexes that do the "1st month free" deal but the rents should be higher than they currently are and today hopefully I can find out why they are priced lower than the market.  Thanks again for all the input.  I am learning more evaluating this deal thoroughly and with the questions that people keep asking,  I sincerely appreciate this!