All Forum Posts by: James Lehnen

Thanks everyone. I opted for a land contract because I couldn't provide the 25% down. I was ok with the 3 year balloon because I think the building is worth considerably more, although it hasn't been appraised. I will be taking advantage of the exterior facade program and also a lead abatement program is offered to the tune of $12,000 per unit. I'm hoping to get all new windows using the lead abatement grant. Also, the $126 light on top of my building is rented by a large bank; that has recently had a motivation to improve the surrounding area. I'm hoping this plays a role when I go to get the mortgage. Now...if that doesn't work, I also recently purchased a residential home and have around $40k in equity.

So far during ownership; the building has had very little need for maintenance. However, this leads me to my next question. I plan on upgrading the apartments and raising rent. Is there a general rule of thumb for renovation costs to rent? My plan was to invest $3-5k into each unit one at a time, raising the rent to $400-450 range.

Here is the rendering of the building proposed by the city.

So I recently discovered BP while researching how to scale out/expand property investing. In the short time I've been here I have learned a lot...too much! 6 months ago I spotted a commercial property on craigslist and I now own it! I did run some numbers before the purchase and was happy with the results, but I wanted to get an expert opinion.

Building is roughly 6000 sq ft, 3 story with a commercial unit on the main level and 4 apartments.

Current rents:
Commercial space - $500
Apartments - $300/ea (Tenants pay all utilities)
Light on top of building that banks rents $126
Total: $1826 per month

Purchase price - $92k (land contract)
Down Payment - $10k
5.5% interest on 20 yr mortgage with 3 year ballon
Mortgage payment: $564
Taxes - 3300 annually
Insurance - 300/month

A few things to note:
- Rents need to be raised. Rents range from $300 to 900 in the area.
- The city offers a neighborhood facade program where they pay 66% of exterior enhancements up to $45k

With that being said, did I do ok?