All Forum Posts by: Warren Straley

Be careful when purchasing homes to demo and rebuild. I am not sure about other areas, but I would imagine the same everywhere. There are large sewer lines running underneath residential homes in my town. If you happened to own one of those homes and it would burn down, or you would knock it down for some reason the city would not allow you to build over top of that sewer line again. So then you would just have a more or less unusable lot that you need to maintain and pay taxes on.

Just do your do diligence when purchasing to tear down. Talk to the city to find out location of utilities, zoning, and and any other limitations. Luckily I did not find this out the hard way!

Can you look at it from this angle? Say he owes 80k left on his home , and monthly payments are $800. He could pay that mortgage off, and effectively earn 10% on himself? 

If/when my current deal under contract goes through and I build my next duplex I will be at 20 units.

I think that same way as well. What if one of our major employers leaves? Just off the top of my head though I would say there are at least 10 employers that have 100+ employees each plus multiple smaller ones between 20 and 50. It would definitely hurt if one left, but if multiples left that would be bad. Currently 50% of my tenants are seniors and the other half aren't. That is one reason I like seniors. They are a little more "recession proof tenants" then anyone else who isn't retired.

I live in a small town of approx. 10,000 people. I have often wondered if it is unwise to grow a large (50 to 100 units) rental portfolio all in the same town. Has anyone ever thought about this, or have any advice on this?

I imagine there are approximate 5,000 residences in town. If I were to grow to 100 units that would only be .02% of all housing. Am I making mole hills into mountains??

Does anyone know much about US Marshall auctions? We just had a property in my community go to this type of auction and sell for $0.40 on the dollar. No one knew about the auction, and only one person showed up to bid. Got an absolute steal on the house. He will make an easy $50,000 on this deal. I don't want to miss a deal like this in the future. I found the US Marshall site, called, and left a message, but no response yet.

Any ideas?

I guess everyone's investing strategy is different, but let's look at this from an ROI standpoint. Say purchase price is $375k. Downpaymemt would be $75k. NOI is $40,000 (after debt service it would be $14,000) so $14,000 divided by $75,000 gives am ROI of 18.6%. In my opinion that is a fair asking price... or am I doing this wrong?

20,000 ish per unit is a good price. Not sure about other cap rates. Not much sells in my area.

Thanks! would love anyone's opinion. https://www.biggerpockets.com/forums/88/topics/464245-12-unit-apartment-complex-possibility

I have been managing this complex for three years now, and know it inside and out. 12 total units (5 buildings on slabs. Three duplexes and two triplexes. Ten two bedrooms and two one bedrooms) decent part or town, but nothing to write home about. Units are about 30 years old, but had new roofs in 2011, and I have slowly been replacing water heaters, ACs, etc. All need new doors and windows, but otherwise they are nice, good condition, clean aparments. I have a waiting list to get in to be honest.

Gross rents are $63,000. NOI is $42,000 after taxes, insurance, maintenance, and 3% for vacancy. What should this be valued at is my question.