Dang ! I need more apartments !!!

I have the only ones in town and the phone has been ringin off the hook the last few days . We are a wide spot in the road and last year I took a old laundrymat/ curio shop building and turned it into a 4 unit Apartment with a up to date modern Laudrymat , small mini storage and a big refrigerated Meat locker . Now we have all these miners and loggers coming in and no place to stay except for the flea bag motel in town and no body wants to stay there . I came up with an idea to do one more 2 bedroom apartment and had planned to hold off to spring and when my health got a bit better to do it.
I just informed my guys that on Tuesday we start another unit !
When in rains , it pours I guess !

I have a chance to pick up two more large buildings at cut throat prices but I am not sure if I want to get that busy . One is plenty big enough for a 10 -15 unit Hotel and would do great . It will need some majorMAJOR work to bring it back up . I guess about 100-150 K to repair . The other building could hold 4 more apartments and should cost about 75K to repair .

I don't do anything "Half Ass" and that is what scares me . I could dump way more than is needed in making them "WAy TOO Nice"for our little town .I may have to think about this one a bit ...

Good job, Big Al!

Like Mama always said, the truest tell of wealth is a big drawer full of keys. BTDT.

Before ya know it big Al will be runnin' the post office, general store and the court house.

Will it be Mayberry's Andy Griffith or Boss Hawg.

Before ya know it he'll be running for congress,LOL!! Seriously Al, with the way your body's been treating you lately, maybe you need to be a "Pickup Boss", ie: sit in the P/U or just walk around and look at things being done making sure they're done right.
Mike

It got the best of me and this evening i went down and took another hard look .

My whole life I get a tingleing feeling when I know I am onto something good or a money maker .Its never felled me yet . This may be stomach gas ,but tonight that feeeling is back .
Guess I'll spend the weekend running cost numbers on this little venture ...

Al you are going about this backasswards... Shield your taxable income and reduce the risk.

Partner with a non profit and accumulate govt grants, tax credits and subsidies.

Here is one that is worth $136K x 108 units.

http://www.startribune.com/business/185587162.html

What is your projected cost per unit? What would your cap rate be when rented?

al. was gonna say, 'listen to ur gut.'

apartments either make or break a person that owns 'em. properly maintained ones have waiting lists. ppl talk. lazy landlords keep tenants fer a few months. i figure u would be a great landlord.

BigAl said:

Guess I'll spend the weekend running cost numbers on this little venture ...

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So much for Panama this year...

Melensdad said:

What is your projected cost per unit? What would your cap rate be when rented?

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That is what I need to figure out in detail . I'll get ahold of the old owner and get inside to look around .

If I am not making a minium of a 1% profit a month , I do not invest in anything ..


I just realized that it is a 3 story building after taking another look last night . So it is bigger than I originally thought .

Mentioned it to the wife and lets just say she was not to happy . She wants me to stop working . I feel if I stop ,,,,,I die . Got to keep the body moving .

Buying it ain't the problem,,,, the biggest challenge is to win the wife over .

Really rough numbers ,,,,, it looks like a profit return after remodel at about 3% - 4% profit on my "total investment a MONTH" .I can usually hit my projected return numbers pretty close when figuring , but as you know there "can" always be something hiding in the wings , waiting to come out , that a person does not see . Those are numbers I can happily live with and it gives me a lot of wiggle room . !!Better than any bank or stock will give me .

I have the rental numbers on the other "one and only hotel" in town, so I already have a good idea of the average occupy rate per month . My place would be the first you see as you come into our little hamlet . A cafe sits across the street as does a reopened steak house bar .
My newly remodeled laundrymat is two lots down so I would be investing very close to my other building .

The nice part is the full time apartment units would be in the rear facing the stream . Good off street parking and plenty of room for snow removal.

Dang I gotta win the wife over . I may need to change my tactics with her . I may buy it and put together a total cost plan of operation and sell it as a package deal ...

Still a few things to check out , so we shall see .

Al go out past the first year in figuring..

"Redevelopment" works fantastic until the county shows up with a 500%-1000% increase in the property taxes. Fire insurance also rises to the replacement value, etc.

3 story means 2 egress methods: stairways, elevator. Makes for a lot of common area maintenance.

Anyways sounds like an excellent opportunity to add more revenue to your baseline. With enough revenue it can support a fulltime manager. Your free to do whatever.

grizzer said:

Al go out past the first year in figuring..

"Redevelopment" works fantastic until the county shows up with a 500%-1000% increase in the property taxes. Fire insurance also rises to the replacement value, etc.

3 story means 2 egress methods: stairways, elevator. Makes for a lot of common area maintenance.

Anyways sounds like an excellent opportunity to add more revenue to your baseline. With enough revenue it can support a fulltime manager. Your free to do whatever.

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I figured in a full time manager in the original cost and it still works . No way in hell I am going to start staying up at night to check in tourist !

Wife is being very stubborn about this ! Hell , I am the one doing all the work . All she has to do is eat Bon Bons and watch Orpha

I hail from the big cities, Big Al, and would be concerned about code requirements for fire suppression (sprinklers) in a multi-story rehab. Any requirements in your little hamlet?

Can often be a real deal killer.

Kane said:

I hail from the big cities, Big Al, and would be concerned about code requirements for fire suppression (sprinklers) in a multi-story rehab. Any requirements in your little hamlet?

Can often be a real deal killer.

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Permits ??? For what ???? LOL No permits required . Only a plumbing and electric permit would be needed and in this case I would be exempt because it is already a motel/apartment .

Dang ! I think I am slowly wearin her down . This morning she is talking to me again !!!!

Told her maybe I should just pick it up as a future investment . No need to get in a hurry to remodel it . Told her I would buy it with my "Mad Money" that I keep pigeon holed in my underwear drawer !!!

God ,,, I can be so charming when I need to be

OK ,, I just got done running the basic cost numbers for the tenth time and a yearly operations cost to get this baby up and running .

Its a solid 3% return on total investment a month on the low end and closer to 3 1/2 % .Could easily go 4%+ on the high end .

Thats a 36% plus return on TOTAL investment yearly on the low side !!!!
Again this would be my Construction company doing the Remodel/Reconstruction work to keep the cost "in check" and on time . Reconstruction Time frame would be 9 months to complete. To take advantage of the tourist/hunting season in 2013 the Hotel building would need to be up and ready to go "operational" no later than June 30th , so the first building that would house the hotel would pull priority over the 2nd "4 plex apartment" building .Appears to be no major structual engineering to repair though I would do this "In House" if need be .
A Concrete reinforced retaining wall to stop stream "over flow" at the rear of the property , should it ever happen , would be cheap insurance in case we ever experience a flood situation .Has never happened "yet", but I believe in being prepared !
Going to pull some additional County paper work next week to verify a few things .
Wife is still a "NO GO" on this .
If nothing else I am having fun dusting off the old brain and using it again ....

BigAl said:

Wife is still a "NO GO" on this .

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Had the same problem. Had to drag her kicking and screaming to sign the papers on a beach house rental. It is only now, a year later, that she finally 'gets it' and doesn't mind the income. But women are like that; they keep our ambitions and risks in check.

Kane said:

Had the same problem. Had to drag her kicking and screaming to sign the papers on a beach house rental. It is only now, a year later, that she finally 'gets it' and doesn't mind the income. But women are like that; they keep our ambitions and risks in check.

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LOL ! and i thought I was the only one whose wife refused more money !!

I'll keep workin on her . Today she even hugged me again !

Tell the wife it's gonna be a saloon downstairs. Call it the "Krusty Saloon". A place for Krusty owners from all over to come and hang their heads down in shame. Tell stories about how they plan on getting their snowkitties running and venture out 75 feet from the parking lot without breaking down.

WEll........ I want it . The wife told me yesterday that she knows I am just waiting for her and the girls to go back East and then I am going to buy it

Me , buy it ?????? . Start lady !!!!

.

Took the wife out to lunch and just happened to stop at the new building to explain what could be done with it . She just rolled her eyes and said
"Do you really want to be tied down to a hotel and more apartments" !!!???. I tried to explain that we would hire a manager to run it all , but I don't think I am winning on this . The bad part is now I know that its just a matter of time before someone does this and makes a killing .

Tomorrow I am on a new plan . I am going to tell her I want sex every day since I have to just stay around the house . I figure in about 1 day she will give me the go ahead to buy the property .
I just wonder how pissed she would be if I bought it and just tucked it away for a while without her knowing anything about it . I could use my Mad Money and she would never know for awhile . 36% profit a year is nothing to sneeze at !!!

What if your wife is right? 36% is no guarantee, nor do you need the additional headaches. You could go from not having enough apartments to having way to many as the work changes due to layoffs or better jobs elsewhere etc. Besides, you'd have more fun in Panama I suspect, these would just be something else to tie you down here.

better buy her some jewelry.