All Forum Posts by: Won Lee

Check the age of the hot water heaters (if they don't have an age write down the serial number and look up the model online for year built). Water heaters here usually last 15 years +-3 years. Replacing 4 hot water heaters if you have a plumber do it: $2800.

How old is the carpeting in each unit? 7 to 10 years use and then replace are good numbers for us. We figure $1.75 x the entire SF of the unit = replacement cost ($1500 to $2200)

How about the heating and air conditioning - here we us heat pumps mostly to heat and cool. They last about 17 years, and then the owner is spending $4000 to replace.

How old is the roof? Even tile roofs need the under layment replaced at about 25 years. Roof replacement is usually way more expensive than you think it will be. $5000 to $10,000? Not sure of numbers on this.

How does the exterior look? Exterior painting if hired out might run $5000 plus for a 4-plex.

How is the parking lot? Paving is expensive.

Is there any fencing? metal or plastic wonderful. Wood - bummer. If a wood fence makes it to 10 years here that's pretty good (rot and termites love wooden fences).

How old are the fridges? Renters are hard on fridges. We buy used ones to replace broken ones.

Dishwashers here only last 5 years due to our amazingly hard water.

As an example we own a mobile home used as a rental. We set aside $250/month for big expensive repairs. Probably a little more than we need but better safe than sorry.

Anyway, just our numbers for our area and the quality of the properties we manage (good quality).

Don

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Originally posted by @Walter W.:

Won,

I am by no means an expert but am happy to provide some thoughts. Every market is unique and I can’t say if commercial real estate or apartments is a better investment in your area. I would suggest that you look at a lot of properties and learn the numbers behind real estate (read this book: http://www.amazon.com/Every-Estate-Investor-Financial-Measures-ebook/dp/B004BKIEUS).

Also, determine your financial objectives. Are you investing for cash flow, appreciation, or a combination of the two? Are you interested in Class A, B or C? Do you want to have a property manager or self-manage?

I would highly suggest that you talk to the managing partner at the CRE Company. Just be respectful and listen. That meeting certainly can't hurt.

Good luck!

Walter

Walter,

Thx for the response. A few people have suggested that book and that will definitely be the next one I read. Agree that I should meet and talk to as many people as I can to get differing perspectives.

Do you like to invest in the spendy Seattle market or go abit outside to find value plays?.

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Not to thread jack but I am in the exact situation as the OP. I too want to invest 150K right now and debating between MF apt's or small commercial building.

I have more realistic expectations though and I would be happy with a 10-15% return annually.

I started a thread(multifamily section) but nobody has responded to me yet.

2 Votes

Hi, I seek advice on here from all the experts regarding the question, MF apartments vs small commercial RE(thinking office space).?.

My only experience is that I owned a townhouse rental 10 yrs ago and sold it a year later in 2005 when I saw some topping signs and did well.

My partner and I are both medical professionals and we both have great credit. We would like to start by investing 100 to 200K, so total purchase price around 500-800K.

We seek income generating properties with potential for appreciation. We can take some risk, as if we didn't have tenants(commercial office space) for awhile, we could carry the mortgage without bankrupting us.

1. for our situation, would you favor commercial real estate or multi unit apt's???. I live near Portland , OR and things are very expensive here(not quite Seattle but getting there). Most apt complexes with even 10 unit's selling for over 1 million. If you go to smaller towns just outside of Portland, 4 plex's selling for 100-130 a SF. Office space selling for 100-200.00 per SF. I am just looking at Realtor.com and Loopnet.

2. My goal is to buy a new property every 1-2 years. I have a senior banker friend who is setting me up with senior managing partner in a major local CRE company but I would feel kind of guilty wasting his time dealing with newbies such as myself. How do you find young smart guys who are hungry and want to grow with you.?? Obviously I would like to be on his shortlist so I can have access to good deals first, as the stuff I am looking at on Realtor.com and Loopnet do not seem to pencil out financially.

3. other than reading a lot of books and coming onto sites like this, anything else I should be doing?. What would be great is to watch someone in person negotiate deals and get hands on experience but I know that would be tough unless you knew someone in the business well.

Thx and sorry for all the newbie questions.

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All Forum Posts by: Won Lee

Won Lee has started 7 posts and replied 25 times.

Post: New Member from Portland, OR

Post: Should I jump right into Multi-Family???

Post: Advice Needed From The Experts Here:

Post: If you were just starting out and had $150,000 to invest in real estate where would you begin?

Post: Advice Needed From The Experts Here: