All Forum Posts by: Tab Teehee

I own a small multifamily (20 units) property in a somewhat rural area. This is the first and only property I have hired professional management for and since I live in another state it was pretty much a "no brainer" to hire one. Since it's a rural area I didn't see many available management options, so I reached out to another property in town and worked out a deal with them to take mine on as a sister property. Their property is 100 units and has an on site manager as well as a seasoned maintenance staff of 3.

My property was completely vacant when I acquired it and went through a full rehab and value add. Our first units began leasing in march of this year and we are currently 80% occupied. The rehab is being completed on the very last unit now and should be complete by months end. My concern is this...I'm paying roughly $2400 a month in management fees and I'm concerned that I may be overpaying, especially for the service I've been receiving? I'd like some opinions or examples of what others are paying for similar sized properties.

@Greg Scully they're charging a $2500 origination fee, $295 doc prep fee, and customary titlework, didn't mention an appraisal but since the appraisal for the purchase/rehab was ordered by them they're probably using it?

@Tab Teehee

Just spoke with a commercial multifamily lender and was told that they wouldn't write new business in a county below 100k population? Maybe that's why my bank is quoting what they are?

@Jaysen Medhurst

Great article! Thanks for sharing!

@Syed H.thats more along the lines of what I was expecting. I've got a good relationship with this bank so I feel a bit uneasy about looking elsewhere, but I business is business

@Syed H.

Thanks Syed.

So how much better should I be looking for?

@Greg Scully

Thanks Greg

I am a little under the gun since my construction loan matures 5/31! The bank had mentioned extending the construction loan term if I wasn't 100% finished with the rehab, but I wonder if I should just bite the bullet, stick with them, and look to refi later?

@Gang Liang

Just wanted to give an update on the ductless heat pump mini split install.

It's been a year and we made it through a cold winter and many hot days with very few issues. Not only do they work very efficiently, the tenants like the zoned temp control via remote control. The systems also qualified for very generous rebates from the electric company.

well after a long long year of rehabbing a 20 unit property, it's time to convert my construction loan to permanent financing. The local bank that did the construction loan has presented me with two different loan choices, and neither sound as good to me as I had hoped.

Here are the details....

20 unit property ARV of 1.25M

Construction loan balance 705k

Currently 70% occupied but we have several applications being processed now, so could be 100% by closing.

Bank is offering:

20 year amortization with a balance of $705,491.55. The interest rate choices are:

* 3 year adjustable 5.99% and a 5.99% floor (based on Wall Street Journal prime rate + 0.49%) Payment will be aprox $5055/month

* 5 year adjustable 6.25% and a 6.25% floor (based on Wall Street Journal prime rate + 0.75%) Payment will be aprox $5160/month

* Accrued interest will need to be paid at closing on the construction loan, if no changes $3011.63 as of 5/31/19(this would increase if the $10,500 of undisbursed funds are disbursed.)

*Either one of these options will come with a $2500 origination fee for the long term loan.

*Commercial loan document prep fee $295

*Title work will need to be updated again.

*All fees will have to be paid in cash at closing (cannot be added to the loan)

Thoughts?

@Nicholas Aiola

Again I say...you're an animal!!!

So, just to be clear...all repairs and improvements that were made to the apartments in 2018, will jump forward to 2019 and become part of the adjusted basis of the property?

So as far as the LLC goes for 2018, that would just leave travel expenses and other expenses that wouldn't contribute to the basis? I live in Florida, the LLC is registered in Oklahoma and that is where the property is. I've spent thousands on travel last year dealing with contractors, etc, so I assume that would be a deduction for the LLC regardless of whether the building was rented in 2018 or not, correct?