Investing out of state

Investing
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Part of expenses for computing cap rate?

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16k rent is very good for 1.7M purchase

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Welcome, @Edubravo,

Cool last name… Bravo! Bravo! Bravo!!!

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Yup, the current cap rate is with landlord still paying utilities, once I’m done stabilizing rents I’m going to explore doing RUBs and backfilling tenants, should add .5% to the cap rate

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Thanks! This forum has been a favorite of mine for a long time :slight_smile:

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Sounds good. Make sure that Portland will not have rent control.

Every landlord needs to understand rent control fully

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Asumming you are self managing? What’s your expense rate on your multifamily? .

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25%

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My experience is similar (don’t have an exact number), but managing self locally is a fraction of what it was costing me remotely in Sacramento

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What’s the 25%? Does it mean that you spend 25% of gross rent on property tax, insurance, vacancy, repairs and maintenance?

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Yes that’s the standard in the industry. Except repairs can fluctuate. Some may be considered capital improvements.

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I have a “out of state” I was leftover with some moeny from 1031 exchange so rather than paing taxes I bought where I could out of state. So far it has been in over 10%. Have lost about 3 months of rent in reahbbing that and don’t expect to spend more ( hopefully ).

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Did you go there when you rehabbed the out of state house? It can be time consuming and costly

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No the property management company regabbed it and they did afternoon the lease was up and before putting a new tenent in

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Thanka folks I will need to re-run the numbers, currently I have around 45% expenses estimated including property management fee

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Hey cloud sounds like you found a nice opportunity 10% is really nice. I find it very hard to find good properties with a decent cap rate

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He’s in the game for a while, and he’s a builder - he gets the first shot in a bunch of properties.

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Have you dropped out of the contract? If yes, any experiences you want to share on why you did let it go?

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I ended up terminating the contract, there was a path to reduce expenses to around 35% (backbilling water via RUBS) but the inspection report was a nightmare :confused: . Anywhere from foundation issues (leaning walls), electric panels that should have been changed in the previous purchase, and a unit that needed a full remodeled, and many more. I could have negotiated a discount, but didn’t feel comfortable managing the whole foundation repair, etc from out of state, so I passed and will look for something a bit more turn-key.

3 Likes
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Agree on managing such a project out of state. Finding correct GC and PM will be a challenge.