All Forum Posts by: Tyler D.

Utility bill is 150 per unit. 450 - 150 = 300.

If I have 2 duplexes paying full utilities, that is the same income per month, plus they are more likely to attract long-term tenants.

I will definitely be swapping to LEDs then. For appliances, do I need the latest and greatest or is there a happy medium? 

Also, what are your thoughts on solar panels, energy efficient windows and insulation upgrades?

 Thanks for the response Joseph.

The split is 1 2/1 and 7 1/1s. 

Looking at the rent rolls about half the tenants are long term and half are month to month, so I want to entice them to stay.

I'm thinking a separate utility payment is the way to go. It makes the sticker price seem lower and more attractive to renters.

I recently close on a great deal in a small town that I think has potential for growth. It is about an hour away from a much bigger city that residents have been moving away from to escape increasing rents.

I am considering buying more property here, because due to the small size of the city I could control a lot of the market, and there are a lot of great deals, unlike just 30 minutes away where prices are much higher. However, there is the possibility that jobs die off and everyone leaves, leaving me holding the bag.

I have considered spreading out my investments over several cities to hedge against a single point of failure, but doing so would mean settling for higher prices without much of an increase in rent. Your thoughts?

I recently bought two 4plexes for a pretty sweet deal. 100k. Both are in a small town which is why I got the deal, and are mostly 1/1s. Both are converted SFH and have a single meter, so the old landlord was paying for utilities.

The rooms rent on average for 450 and utilities cost 150, so I'm bringing in 300 per unit. 3/8 are long term occupied and the rest appear to be transient/ month to month. I'm considering several options to improve cashflow.

1) Split meters and tenants pay utilities: this would be a huge boost, even if I just did electric, which is currently costing me 75 per unit. However I have read that splitting meters can be expensive, up to 5k or more per split. To split just 6 electrical meters I would spend 30k.

2) Improve efficiency to reduce utility bills. The houses are old (1900), and I feel some small changes like LED bulbs and solar panels could go a long way. Not sure what the long-term ROI is on these, though.

3) Convert to duplexes. It seems crazy, but if I were to knock down some walls, I could convert them to duplexes, charge $600 + utilities, and attract higher quality long term tenants. And I would only need to add 2 sets of meters vice 6. I could also do more value-add like fresh paint, professional photos, etc to raise the rent in a 2/2 situation where in a 1/1 I think it would be much less likely.

Your thoughts?

Given that I don't have separate meters, is it okay to do a flat fee?

I've been prowling for deals and stumbled upon a housing auction website. I found a couple of enticing auctions, in particular a duplex and a sfh, both of which are (according to the website) occupied.

Both are incredibly cheap for their market, and assuming they are occupied they are at least liveable. My issue is that I cannot see the inside, must buy as-is and cannot get any information on tenants etc before I buy. Some are incredible deals (the occupied sfh for example is $10k in an area that rents for $600), but I cannot shake the feeling that I could be buying into a trap.

Your thoughts?

I recently bought two fourplexes, and previously all utilities were paid by the owner. The utility bills are quite high ($150/tenant/month), and with the average rent for my units being 450, eat up 1/3rd of my income. I'm looking for the best way to solve this situation.

Both properties only have a single meter each, so I could split the meters but that could be costly. I could do a flat utility bill on top (rent + x for utilities), or I could just slowly increase the rent. Though the norm for the area is only about 500/ unit for the type of place I'm renting.

Also considering solar panels or better insulation, etc. What's the best way to handle this?

Right. I'm also skeptical... hence why I'm posting here to ensure I don't walk into a trap.

The fact that it is fully rented tells me that it's in good enough condition. I'm willing to put some money into it as well, so long as it doesn't break the bank. I'll be hiring a quality inspector so if there are any major issues I'll know beforehand.

I am a new investor who just got my offer accepted for my first deal! After weeks of searching through various cities, I found two fourplexes. After some research I found that they were the last 2 properties belonging to an landlord, and offered to buy both at a discount. He accepted.

I am looking for some help analyzing the deal. The numbers look solid, but there might be something missing! Here are the details:

1) Two fourplexes in a small town. Total price $99,000 for 8 units. 

2) Each unit rents for 400-550. Total rent is 3650 and fully occupied, but will be 7/8 when I purchase.

3) Low crime. Quiet, blue collar town. 1hr from big capital city, 25mins from big suburb.

4) Currently managed by PM for 10% + $50 per extra door. $665 total. I think I can find better.

5) Both were built around 1900, look solid. Seller isn't aware of any major issues, but I will be doing DD.

6) Here's the kicker. Owner pays ALL UTILITIES. They are ~$150/month per tenant, so about 1.2k per month, aka 1/3rd of my rent. I assume this is because meters are not split.

Anyway, I ran the numbers and even with the huge utilities costs I still turn a good profit. I assumed 15% vacancy, 10% maint, 5% capex $1500 insurance and used historical taxes. Ends up cashflowing. Are these numbers conservative enough, and can I expect returns from this deal?

However, if I can tackle the utilities I can improve the cashflow considerably. If I am able to split meters for gas and electricity and have tenants pay them, I will save $920 per month or $11,000 per year. For the two properties, what would be the expected cost to split them, and would it be a smart move long-term?