All Forum Posts by: JT Spangler

I think the thing that pushes me over the top is your potential for appreciation and being able to add a 5th unit. If you do, my understanding is you'd be able to refi with a commercial lender, who will value the property entirely differently than a residential property (4 units or less). Which means if you manage well and collect maximum rent for the area (which, after your reno you should be able to), they'll potentially give you some equity in that valuation, which might make it so you can refi without PMI.

So if your expenses are good, rents are good, cap rate and cash on cash is good, I like it. This is a good example for understanding why the guidelines work the way they do. Your COC is awesome, for instance, because you're getting a huge loan with little down (300k for 15k ish?), but your expenses are high in part because your debt servicing numbers are huge (due to 400/mo PMI, of course, this is precisely because you're getting so much loaned with so little in). If you are confident the area will continue to grow strongly, I think it's a good buy. If it were me, I'd dump every dollar of cash flow into either extra principal payments or a construction fund to build out the 5th unit. The sooner you can ditch PMI the sooner this becomes a nice cashflow property and you don't have to count as heavily on appreciation.

I'd shoot for finding a way to finish that 5th unit in ~2 years or so, and at that point you can stop owner-occupying and be collecting rent on not only your unit, but also the 5th. That brings your monthly GOI up to nearly 5k. Of course, you'll have to figure out some way to pay for that construction, but if you're really attentive to the reno process the first time through, you can probably be the GC for that smaller reno and do it on a tighter budget. But you should be able to get a 1% property by then, and at that point you may be ready to turn it over to a PM.

Then, it'll be on to the next deal for you.

Looks promising thus far. Where'd you get your rehab numbers from, and do you have a contractor lined up to do the work? 203k comes with extra hoops, and not everyone wants to mess with them.

A lot of fallacious logic and misinformation in this thread (foster and amateur dog trainer here). First off: there's no such thing as a naturally human aggressive dog. This is a learned behavior. Meaning every dog on every THIS DOG KILLS list would be a completely docile, sweet, affectionate dog if properly raised and trained.

Second off: it's a fairly useless statistic to say pit bulls cause more deaths than any other type of dog, or more attacks. It's like saying Toyota Camrys cause more deaths than Mini Coopers. True? Yes. Useful? No. Reason? There's a ****load more of them on the road!

Third: the thing you do have to be cautious of, with any large breed dog, is that if they're raised wrong and do end up aggressive, the resulting bite can be a lot worse, simply because of their size and power.

Because of #3, I don't know that I'd rent to a pit bull owner even if my insurance allowed it. The only exception would be if me and my dog met the dog and my dog signed off on it. She's a lot better at picking up potential issues with other dogs than I'll ever be. But, I have fostered pits and I certainly would again. They're incredibly sweet dogs. It's a crying shame that they've gotten adopted by this hip hop culture as status symbols, and been the central breed in most dog fighting rings for years. The bad press because of those two are the reason why most people are afraid of them, but none of it is the fault of the breed, and all is the fault of the owners.

Of course, we're talking about investments here, so if it makes business sense to discriminate against dog owners, I'm all for it. :)

There's nothing wrong the display of the analysis. It's an awesome tool. It's just that if you ask people doing you a favor to go through an extra click to do so, most of them won't. Sad but true fact of the internet.

That said, just because it's brand new doesn't mean you shouldn't budget for capex. For me, at least, I'm padding all my numbers before I make an offer to make sure, even if it's a worst case scenario it still works for me. I also calculate with 100% financing in case I ever want to refi (or just fi in this case). Granted, I'm new, but I would be careful of making your analysis in a best case world so that a property looks like a better deal than it is. There's enough meat on this one that I think it'll be a good deal even with all that stuff factored in.

I was gonna also recommend flippa, except they don't have a forum. It's just a listing service.

I'm not sure there's enough information there to answer your question. How's the neighborhood? What are you projecting for maintenance, capex, and management? Does it need any work/upgrades anytime soon? Can you break down your mortgage, taxes, and insurance numbers?

So far all I can tell is that it's a 1.5% property that may or may not be a good deal for your area.

I have no authority here whatsoever, but my guess is that you'll get more responses if you actually put the information in your post, rather than requiring people to click away to a google doc. You're asking for a favor, so make it as easy as possible.

ETA: that said, will this be a cash purchase? The numbers posted are your maximum cash flow, but if you finance that'll change the equation quite a bit. And it looks like you're budgeting 3% for maintenance and nothing for capex -- that seems risky to me.

Huh, neither the at reply nor the link appear to be working.

Admirable goal! Check out @Brandon Turner 's article on going from zero to a million dollars. IIRC, it took 7 years in the example. http://www.biggerpockets.com/renewsblog/2012/12/12/make-a-million-dollars/

What I'd do is write an offer with three contingencies: (1) inspection, (2) appraisal, and (3) financing. Or possibly just (1) and (3) if I felt confident about the numbers. What that means is that you agree to purchase the property (you have an accepted purchase and sale contract), provided that the inspection results don't reveal anything serious, the property appraises for the loan amount, and you're able to get financing for it.

Some people say that adding these contingencies lowers your chances of buying any particular property, and I can't argue with the logic. But you have to protect yourself, especially when you're starting out.