All Forum Posts by: Tim Nethers

 I'm finding rates at 10%. While not impossible, it's not ideal, is this what you think they would offer?

I have a solid relationship with the seller of a 5-unit (4 apartment, 1 commercial) building in Mercer County, PA. I currently have a reliable team with my managed properties in the area; however, I don't have a commercial lender. The seller wants $150k, and the numbers check out. Where do people find these 30+ year commercial loans that are mentioned in BiggerPocket Stories and Podcast. I keep coming across 5-10-15 year notes with balloons.

I use steadily.com for my long term rentals, and am entering into my first partnership on an AirBNB. We plan to quitclaim the property into the LLC after closing, and disclosed this to the lender. We had a few questions regarding this for insurance purposes. Do we insure ourselves as the LLC, or will the mortgagee require us to insure personally then change insurance when under the LLC? Are there solid big names in the insurance side for Short Term Rentals like Steadily for LTRs? Thanks in advance.

Thanks for that feedback. The energy sector bringing well paying jobs is a definite draw.

I'm seeking feedback for how it turned out for investors who invested long-term in small town, lower income tertiary cities, such as former mining towns and manufacturing areas (C-D class). These areas tend to have fewer options for property management and contractors, lower rents, but also lower cost of entry. When you look back 10 years, all the properties were worth $5,000-15,000, and now are $35,000-60,000. While there has been appreciation over time, the majority of it occurred in 2020-2023. 

On numbers alone, capex and repair costs pose issues, as HVAC/Furnaces/Water Heaters/Roofs/Kitchens/Drywall on a $30,000 house and a $150,000 house are much the same - yet the $1,300 in rent goes much further than $750 in rent. 

For those of you who went this route, did you manage to stay or was the juice not worth the proverbial squeeze? With your experience, have the tenants posed a higher rate of issues? Would you do it again?  Did you find a tenant standard that assisted in avoiding headaches and tenant-caused repair costs?

Thanks in advance.

One might think, but labor in Central Florida is absurd, unless you're talking landscaping.

I had always used Roofstocks's neighborhood rating as a super quick A (5) to F (1) rating system when eyeing properties in out of state areas, to see if it makes sense to run the numbers further. With Roofstock's Neighborhood Ratings seeming to be no longer functioning, what is your best go to? Area Vibes is good for areas, but doesn't do much on a street by street level, which would be critical for say Cleveland (not my market).

I have a decent relationship with the owner of a 5-plex in a small town in Indiana. The 5-plex is fully occupied, and professionally managed, pulling in $657/unit. The owner is willing to sell it to me with seller finance with $12k down, 5.75% for 3 years (22 mo amort.), $1000 in closing costs; but the price is higher than what I'd like to pay. I'd like to be at $185k (7.25% capex), the seller is asking $203k - non-negotiable. 

Expenses are $1,987/mo, including $475/mo in utilities, before P&I. When accounting for vacancy, management, capex, utilities, repair expenses and the financing, its cash flow would be roughly -$100-140/mo at that asking price (not factoring depreciation, appreciation and debt pay down).

I love the idea of adding a 5-unit, but I wanted some other eyes on the deal with more experience to assist in whether its a good idea to take it on for the appreciation/long term hold strategy - with such little skin in the game and with it being potentially negative cash flowing. I've historically bought single family and small multifamily, and never bought anything that isn't cash flowing. 

Knowing that I'd probably be subject to higher rates after the 3 year seller financing, and the asking price leaves it cash-flow slightly negative, I'm wondering if I still go-in knowing that it appraised at $250k last year, and when you consider the debt paydown, depreciation and appreciation factors are a huge upside versus the amount of funds I'd have in the deal. Would you buy or pass?

Agreed, we weren't sure if there was an industry specific operating agreement that was designed for joint ownership of real estate within an LLC.