Realistic Expectations on Profitability and Headache

[Tim Shanahan]

Hello, all!

My business partner and I are working on getting our first deal, which has proven difficult. Our goal is to get a 2 - 4 unit property, with minimal rehab needed, already rented units (ideally), for around $50k. Is this realistic? We have the 20% cash, but now we are jumping over the financing hurdles. Is it reasonable to expect this to be a profitable endeavor, with minimal headaches as far as tenants paying on time, maintenance, etc. The properties we are looking at are in northwestern Illinois, eastern Iowa (Quad Cities). Is this a better price range for a flip scenario, rather than a buy and hold? Any insight you all may be able to provide will be greatly appreciated.  

[Meghan McCallum]

@Tim Shanahan I have purchased a duplex for $57.5k, performed a $25k reno and it rents for $1600. Appraised at $115k. Ready to do my cash out refi.

Those deals are found off market, with a ton of hustle, and boots on the ground supervision with an already existing team for the reno.

Minimal headaches...no way. You could find a few steals on low cost houses in locations like East Moline that you can grab for $25k and get 6-700 in rent...but they often need bundles of work. Expect to pay 10% management fee plus a month's rent to find a renter.

My suggestion if you are looking to invest in the QC is to find a "boots on the ground partner here". I do think we are about to have a correction here around August nationwide...but I don't think it will hit the QC. Appreciation is only forced here. It makes it a REALLY safe place to park some money to ride out the storm.

@Account Closed did you see this?

https://www.biggerpockets.com/forums/521/topics/42...

We are starting a BP meetup. I belong to 4 different ones in the area and I feel the BP folks are much farther along in their investing concepts. We are meeting April 11th! Join us.Tim...you are welcome too!!!!