All Forum Posts by: Tom Scott

Greg,

I'd be curious to know what REI group you've found. I've had a hard time finding one in Gainesville.

Tom

@John Santero, I've been looking into this. The main building I am looking at is in a great area and appears to be a bit run down. I think the rents can be increased $100 per unit if I do a little sprucing up and throw a washer and dryer into each unit (hookups are there but they are currently owned by the tenants).

Tom

I'm looking at a few 4-plex buildings and most already have long term tenants. I know I need to look at the lease agreements before I buy, but what else do you do in order ensure an easy transition for the tenant? How are the tenants various security deposits usually handled as ownership transitions? How do you handle migrating the tenants over to the new payment system (if applicable)? What else should one look out for when buying an occupied building? 

Tom

The existing duplex has, in the past rented for $400 per side, $800 gross (from what I know, this seems low but those are the numbers they are giving me). A new larger duplex on one of the other lots would rent easily for $800 per side, $1600 gross.

The existing duplex is small, each unit is only about 800ft^2 so the rent potential is limited. In my area most 1400ft^2 houses rent for around $1000 a month. 

Tom

I've not seen the layout of the lots yet (the tax map shows the whole thing as a 1acre parcel) but I'm guessing the remaining .5 acre is worth only around $10k as raw land to be built upon maybe maybe $20k if I could squeeze 2 buildable lots out of it.

Tom

A duplex in my small town has popped up in the past few days. The deal includes 5 lots, the existing duplex takes up 1.5 of the those lots possibly leaving the the other .5 of a lot useless though I need to check on that to be sure. 

The duplex, which is 1600 ft^2 total (2- 2/1 units) is supposedly grossing $800 a month total though it is currently vacant. They are asking $160k for the whole package which I think is too high. 

The remaining 3 lots are buildable according to the agent, though I will verify with the county before moving forward. If I could build 3 more duplexes, perhaps 2 story units with a larger floor plan around 1200 ft^2, then I could get around $800 a month for each unit. The Duplex alone is obviously not a money maker at their price point, but I am unsure how to factor in the additional lots. 

Tom 

I should also point out that the area would only support basic apartment complexes, nothing too high end. I'd say 1000 sq ft max blue collar /  young professional type units. 

Tom

First, I should point out that I am in no way venturing into the world of commercial real estate development.......at least not yet. But my area is expanding and one area in particular is seeing a lot of growth from large lot single family to commercial/ high density residential. As a result a lot of property is going up for sale in the area and I started to wonder how much it costs to build a basic apartment building. How does one estimate such a cost? Is there a rough price per square foot cost one can use or is one of those each case is different situations. 

Of course every project would be unique, but I think it's a fun mental exercise to run the numbers on big deals like this to see what the possibilities are. Who knows, maybe one day it will come in handy. 

Tom

@Account Closed

I'm currently trying to get my foot in the door in the Gainesville market. It's a tough one for sure. The town itself is great but there is a ton of competition driving purchase prices way up. As it stands now, the foreclosure market as well as the multifamily market seem to be pretty overpriced and I am personally having a hard time finding a deal on the MLS. I'm running a direct mail campaign as well but so far I've only had 1 real realistic lead come out it. Foreclosures are selling too high for a decent rehab profit and the multifamily units are selling for prices that make even the 1% rule achievable. To further complicate the issue, Gainesville is just starting to get back into a new housing boom with many large developments popping up. I avoid the East side of town due to non existent appreciation and low overall tenant quality. I also try to avoid the Tower Road area (This is near the area you asked about) for the same reasons. When scouting houses online be very careful you are comparing houses of similar build date, construction type and lot size. Gainesville has a lot of new construction intermingled with older homes and this can lead to comps that are not apples to apples.

I think the multifamily market is really the way to go in Gainesville, but as I stated the prices are premium and if you are in the wrong area you won't get students. Feel free to let me know if you need anything in the area, I am somewhat new to the game but as an engineer I feel I have a pretty good set of skills when it comes to houses and real estate. 

Tom

Unfortunately this one will was not meant to be. The buyer backed out today believing they can sell it on the market for more than I am offering. Oh well, that's how the cookie crumbles. I'll follow up with them in a month or so and see how it's going. 

Tom