Posted by Tim (STL MO.) on October 20, 1998 at 02:19:10:
Fred, you seem to be in the same situation that I’m in. I have yet to close on my first deal. I have the same dilemma. I have found several multi-fam. units (2,4,6 fam) that appear as if they would be potentially profitable as rental units. I really do not want to be a landlord either, but many of these properties seem like a profit could still be made even after paying someone else to manage it for me. I know I wasn’t any help, but keep me posted on your progress. It seems as if we’re in the same boat. I’ll be checking back, hopefully someone could help you, and me in the process.
Sorry I couldn’t be of any help!
Tim,
St. Louis, MO.
Help–Need advice on Property Mgmt/Rehab!! - Posted by Fred in Dayton
Posted by Fred in Dayton on October 19, 1998 at 20:39:27:
Hello everyone!
I’m trying to set up my first deal. Here are the specs:
5 family in small town
gross rent: 1925.00
taxes: 1111.64/yr
owner wants 60,000 cash (but told me on the phone prior that he would take 55,000 to 60,000). He owns a construction company, pizza place, storage units and about half the town…he’s 62 years old and said he “needs to slow down a bit”! He’s not interested in taking any amount back–just wants to cash out.
All the units are currently rented (one to the same lady for 15 years.) The outside needs siding (probably vinyl?). Has new windows and a new roof. 2 of the units pay for their utilities and the rest are on their own–I have to call his wife tomorrow to get the utility costs. The furnace is ten years old. I haven’t seen the inside, but I assume its at least rentable.
Here’s my dilemma: I’m active duty military and I would prefer not being a landlord–an impossibility actually. I’d rather finance right for $10k profit at time of purchase and then rehab and sell in 6 months. However…on the surface, this sounds to me like I could pay all the bills, make a nice monthly income stream, and still pay someone to manage the property for me. The income stream (even if only 2 of the units were rented) would cover my “holding” costs.
I’m looking for input from anyone on this–property managers, rehab gurus and finance wizards!
If the owner told you on the phone that $55K was his lower limit, then place that on your WRITTEN offer. Mind you, the only offers that count are those that are in WRITING. So get that fellow’s fax machine number and send something over as soon as you’re ready.
The numbers look good, if fully rented. There ought to be a Realtor in town who can manage it for you, (or know someone who can).
If he balks at $55K, simply counter at $65, with a credit for $10K in repairs, and deferred maintenance (including required repairs [boiler]). Either way, your bottom line will match his.