Investment Analysis- Duplex

Hi Prospects & Friends,

 

I wanted to share with you all this duplex I drove by to see a couple of days ago. I'm waiting for the #'s to come down & will try to make an offer. If seller doesn't want to reduce listing price, then I will move on to the next property for my investment portfolio. I currently manage & own 7 investment properties & looking for 5 more to make a total of 12 to complete my investment portfolio, my deadline goal is to have the other 5 investment properties by 2014. I will starting explaining why I want this duplex to come down in price. First here are the #'s & details of the duplex:

Listing Price- $164,500

Contract Rent- $1,590/mth

Taxes- $230/mth

Maint Fee- $85/mth

Proposed Ins- $150/mth

Total Sq.ft. 2,770- Side 1 $795/mth, Side 2- $795/mth

Side 1- 3Br/2Ba- 1,385 sq.ft.

Side 2- 3Br/2Ba- 1,385 sq.ft.

After carefully applying my investment analysis I've come to the conclusion this property can still come down some more in list price to even give me a better opportunity. I will explain see below:

Rents are currently renting for $735/mth not $795 even though the current owner has signed lease contracts stating so. To apply my investment analysis rule to this property see analysis below:

Rents from owners current tenants are paying $795x2=$1,590-$465 (expenses)=$1,125

So $1,125x6.00/1000=$187,500 (6% interest rate)

$1,125x7.34/1000=$153,300 (8% interest rate).

So based on $1,590 rent ($795x2) range is $153,300-$187,500 this range is off because rents are not consumerate with the list price. This is where many people mess up I take it a step further see below:

Contract rents say $1,590, but current market rents say $1,470 ($735x2) so I will re-apply but work with my #'s see below:

Market rent is $1,470-$465=$1,005

So $1,005x6.00/1000=$167,500 (6% interest)

$1,005x7.34/1000=$$=136,900 (8% interest)

See how my range looks $136,900-$167,500? My range is saying I can offer as low as $136,500 or offer no more than $167,500. The current list price is $164,500, so it's falling in my range of $136,500-$167,500, but I like to keep watching people reduce the list price on a property that has great investment #'s like this one, because you can't loose! So fact is I based my range of $136,500-$167,500 on the market rent & not the contract rent to negotiate so I don't over pay, once property is bought it doesn't matter if rent is $1,590, why complain about someone paying you more in rent than market says? My investment analysis range of $136,500-$167,500 says two things:

1. I wont over pay for property currently listed @ $164,500

2. I based range on market rent which is $1,470/2 or $735/unit. So if tenants don't renew I know market rent is $735/unit & not $795/unit & when I list to lease I will always have enough rent to service the expenses @ the $735/unit because I made sure I didn't over pay from beginning to cause the mortgage to be over $1,005/mth.

I use my investment analysis equations on all my investment properties I analyze & if the #'s don't work I walk away & move to the next. Soon I will offer another helpful article about investment properties.

Business Text Messaging

Hi Prospects & Friends,

 

I wanted to share with you all how business texting has found it's way into my company A. Colette Harris Properties, LLC. permanently, & how valuable of a row it is to allow it. I manage tenants & with everyday company duties I handle, one would think a simple phone call would work. Well my conversing with my tenants has shifted from phone calls/emails to texting for repairs, to when was rent received & general questions about the rental property. I have adopted the texting, because many of the tenants work at companies where they can't use company email for personal use or restricted to making personal phone calls while at work. I get text messages throughout the day/night concerning questions the tenants may have or want to ask me. I reply quickly & get the needs of the tenant accomplished while their at work. For example I had a tenant text me last Friday, saying the bathroom sink has a leak & could a plumber come out to fix it? I texted tenant back asking what is causing the sink to leak, & tenant explained. I said I would have a plumber out Monday, & tenant texted back , "OK thanks". I would say about 5-8 texts were sent back & fourth with I & tenant to converse the repair problem. Another example is most of my tenants want texts with me saying "Received Rent" with the date included in text message. I get texts now from many of my tenants & have accepted it as part of my business & think it's a great business strategy to keep everyone happy I manage. This may not work for many of you who run businesses, & many of you may think I have adopted a un-professional communicating strategy. Well at first I thought I did, and wanted just the email/phone calls during normal business hours, but as I continue to grow the communicating continues to change with technology & people, & in my case I'm accepting the best strategy that works for my tenants. I always thought I would only received texts from family & friends, but now when my phone goes off, it will be a tenant texting me too. My rule for tenants is I will take texts until 10:00 p.m. Monday-Sunday after that the phone gets turned off.