Rental #4 under contract

[Bryan H.]

Happy to say #4 is under contract.

It's a rehabbed bungalow in SE Michigan. 3/1.1 with basement and garage. I'm going to check it out on Friday.

Best thing about it is, I'm getting it after doing a cash out refi on a property I bought in 2012 for $20k. It's worth $60k now. So no money out of my pocket, YEAH!

Rents: $850 / 1.98% - could be a 2% if I squeak out a little more rent

Purchase Price: $43k

20% down @ 5.125% = $187/mo

Closing costs & rent certs: $3000

Taxes: $115

Ins: $35

PM: 8%/ $68

Reserves: 20%/ $170

Cash flow: $275/mo

NOI: $3300

ROI: 28.4%

Or via 50% rule

$850/2 = $450-$187 = $263/mo x 12 = $3135 = 27.0%

With my cash out refi I'm looking to do 2 more of these this year. Gotta love turning a $20k investment into 4 properties that bring in over $3000/yr each.

[Glenn McCrorey]

I'm using a local credit union and just got a 5 year loan at 4% interest, 30 amortization, 85% LTV so 15% down. I refinanced 3 loans I had at 5.5%, 20 year amortization and 75% LTV so was able to get cash out to buy two more which I now have under contract. All these properties are in the LLC name, fyi.