10:11 If a boiler is more than 15 years, it should normally be replaced. With a new heating system in place, we can charge more in rent, because a working heating system is what renters want.
Plus, I'd imagine a new boiler would be a little more efficient than an old, dated 15 year old unit. I could be wrong, I'm not a HVAC guy, but it seems like that'd be a case. Which, would help keep the tenants power bill a little lower, happy tenant. "Oh my power bill is only $60-80 and it's January?! I love it!"
Excellent job explaining this deal and covering the financials. Many times just listening to these small conversation pieces helps understand so much. Thanks and great RE deal.
Hey hvac contractor here. Have you guys thought about vrf for for air conditioning if you want to keep boilers? Highly efficient depending on the region of the buildings, but they're quiet and zoned for each unit also.
We are doing a live Q+A discussing it. None of us know what it is. We ended up putting window units that we installed into the wall. Can you explain VRF? cost?
Well it stands for Variable Refrigerant Flow. But its essentially a "large mini split" oxymoron I know. Benefits: perfect for buildings with large boilers. Can say that the units have central air so you can charge more per rental. Thus increasing value of building. High efficiency so the power bill wont be so bad. Cons: Depending on the size of the building and how many rooms per unit, the cost could be substantial. Atleast 15k for a 6 unit building. You would also be responsible for the energy bills, but that can also be billed back to the tenants.
Well done with the video! I really enjoyed watching it. I'm looking into getting my first multi unit property this year and this breakdown really helped me understand a lot of what goes into it
The program was great, super informative and educational in the details. But, the music was distracting. Please remove or lower the music volume in future episodes.
The expenses on this deal seems understated. A property that old there is no way it only requires kitchen and bath remodel. You are guaranteed to have mold and damp issues, pest control issues if not outright damage, roofing and ceiling issues, plumbing issues, flooring issues. What is the point to have new kitchens and tiles and a lick of paint but old plumbing and roof etc
You're right. We didn't touch on all the repairs. Some of them just didn't make the final cut for the video. There was a lot of other work completed during the rehab.
For 6 units that’s $100 a unit that’s a bad deal, but in today’s environment any cash flow is good and the numbers definitely ensure positive cash flow.
Its all about networking! That's the secret its tough right now because of covid but keep you projects posted on social media and ask your social followers do they want to invest an old IRA or 401k on your next project hope that helps.
Thanks guys! Terrance and I have been following your show to get some ideas. Lots of great ones... plus ones of like not getting locked out :) I say that as someone how has been there and done that too. haha
Bad idea on heating best way to go to forced air with air conditioning is to keep hot water boiler and install water to air heat pumps you use the boiler to temper water temp and you run to heat pumps .maintain water at only 85 degrees heat pumps will heat or cool according to apartment demand .if bottom tenant wants heat and top apartment wants cool they feed each other hardly no energy use at all .to cool water temp in summer you use a cooling tower best energy efficient system you can have you can cut energy cost more than half. Mechanical contractor 35 years
I've been investing in apartments in DFW and other Southern growth markets for the past 6 years and have never seen a cap rate over 5%, but that hasn't been a barrier to great returns.
Boiler? For real? Why waste the money and piss your tenants off? A lot of archaic pieces used to save you like negative several thousand dollars. Hmm, weird. Not very bigger Pockets level I am used to.
I'm 18, trying my best to convince my dad to help me get started. I have the knowledge (I think) and I just need his help with the finances. He doesn't trust the market, especially with the events of 2020. Hopefully I'll be able to get something soon and show him it works. Right now I'm looking at a $50,000 property the needs to be fixed up really good, then turn the garage into an efficiency living space to create more value and income for a better appraisal.
We're doing a Facebook Live and discussing this. The three of us all recommend house hacking as the best way to go. It's less risky. Have you thought about it?
How much of that profit (once you sell the property) would you lose once you claim that in your annual income taxes? How much would the IRS take? On the other side, don't you lose some of that equity by paying rental management , which includes your gardener, maintenance guys at the apartments that are there day to day, the front office people, your overnight security, ?
For low income people close to 700k is a life changing amount of money. With someone not having necessarily a ton of capital to start buying properties or to start a renovation project how would they enter the world of real estate to build wealth?
Go to another market other than Denver. I just purchased a duplex for $90k in Columbus, OH. You could get it at 25% down for $22,500 or the best thing would be to house hack and live in one side which means you could get an FHA loan and get the place for $4k or less.
Well I bought a four plex using my va loan no money down. Also look into fha loans which only require 3.5% down. Just depends on what game you are wanting to play
House hack to build experience and equity. Or if you want to get into bigger deals sooner, find a value that you can add to investors. Which for most is finding the deals.
TBH in this situation you will need to build up a nest egg I would recommend anyone bring a 20% down payment to anything. FHA loans are great but ultimately you need to raise your income check out wholesaling because 3 deals at 10k apiece can get you the money you need to truly start building wealth. Never allow your self to real estate rich and real life poor. Because repairs are apart of this business and you need active income/ nest egg for that. I explain what wholesaling is on my channel.
tenants should pay for electricity and heating they use, not landlords. If landlords pay, then tenants do not care saving it. If they pay what they use - then they do not waste it (and make landlord pay it).
Most multis are individually metered for electric in Denver. Some have one gas meter or individually. We write our leases with an estimated amount of utility usage. If it spikes, the landlord is allowed to collect more. It rarely does. Gas is soo cheap, that's helpful.
Loaded question. Lots of networking, persistence, and then performing (buying quickly) when people bring deals. A quick way to burn sources is to give criteria for what you want and then not buying it when a deal comes your way.
That's the whole point of the show! We bring someone to walk the property with us and ask questions. A lot of the Q&A, unfortunately, gets cut out in the editing process.
Hi Julie, sorry to hear about your situation. Do you have someone collecting rents or do you do it yourself? Are the tenants not paying because of covid? Do they know that when this situation is over they will owe you full back rent and this could also affect their credit rating? They should also be getting stimulus checks to help pay something on the rent due.
@@MasteIsIllmatic Sure, it's not the rents. She needs a forbearance on the property taxes until the cashflow comes back. Local and State governments need to address the current shortfall due to Covid. Most banks and financial institutions are already adjusting like the car insurance industry taking smaller monthly payments until the economy comes back. That's the most pressing issue.
There wasn't a walkthrough of the finished product in this video. Later this week, we're going to update the blog post on Bigger Pockets with after photos
Cap rate is NOI divided by price, meaning price is NOI divided by cap rate. NOI is what the investor influences by the quality of the renovation and the type of tenants that can be subsequently placed, at what rent,, and by controlling expenses, while cap rate is determined by the local market.
@Luis On all the data that I've reviewed, I still think we'll see cap rates compressing.(1) Cheap debt will fuel the growth. (2) Many investors from CA and NY are 1031ing money into Denver because of the stronger cap rates and upside. (3) Overall, Denver is in an extreme housing and rental shortage. Lots of people are moving here. a few PM's have told they've had a spike of NY and CA renters moving to Denver. With many workers going remote, I wouldn't be surprised if many left the expensive markets. Denver is still relatively cheap too many of them.
BuildingWealthWithRealEstate where do you find this data to review? Do you have an specific websites you use to gather such real estate data? If so what websites as I want to conduct research.
Essentially I gleaned from this look for a hard up Boomer who didn’t spend any money to keep his place updated, low ball your offer, reno, then double(?) the rents. Gotcha.
Number 1 mistake is she needs to dress like a lady. You do not have a professional image. The best thing you can do is hire a videographer a college student who needs an internship or a friend who knows how to put videos together and start your own RU-vid channel showing your journey. I not sure if that was a man’s suit jacket and tie but apparentcr is everything in this business. Once again this is not shade not being mean This info could make you hundreds of thousands. Start your own yioutube channel REAL ESTATE WITH ATHENA OR ATHENA REAL ESTATE GODDESS.
maybe in ten years this video will be relevant. real estate investors are going to be put thru hell on earth for probably the next five years and five years to recover... else we hyperinflate, then owning real estate would be essential to maintain yr net worth
Time will tell. I have an 11 unit under contract for a client and the rates from a local came in at 3.85% for 5 years, 4% for 7, and 4.1% for 10 years. They are not worried.
