Quote from @Paul Deliso:
@Aaron Cabrera,
First off Congratulations on your first multi family purchase that is very cool. I was curious about your whole deal if you wouldn't mind dissecting it a little more. I am currently looking for my first multi-family property in Florida and the prices are around what you posted so that is pretty much what drew my attention to your post. I have been curious if I have enough capital to go forth with a property. I know you wrote the purchase price and how much invested, how did you go about getting a loan and/or the 14k you invested was that with down payment? What was the percentage of down payment? Also how did you run the numbers on the property to help you understand that the property was going work? just curious and eager for information from people who are actually doing it so thankyou.
Great question, Paul!
I got a loan by working with a great realtor. He had his network and his badass loan officer was on point and got me a property by jumping through some hoops for me. I know I said I invested 14K but by that I mean that was only the closing costs. That included the normal fees, about 3k worth of the down payment, and credit cards I had to pay down and close out because I'm a new investor jumping right into a deal that's a little risky for the lenders but I got it done. So I basically bought this deal with 3k that was included in the closing costs. The total downpayment was 3.5% so it was about 14k. My loan officer helped me get down payment assistance of 11k and that was it.
I ran the numbers on the property through the biggerpockets calculator. Just the normal investment property calculator, not the BRRRR one. I used rentometer.com to determine the average rent in the area and a good amount of properties in this area was going for 2k a month for a 3 bed 1 bath. What I realized when I moved into the property was that a few of the duplexes (same build and blueprint) around my area were only going for 1500 a month per unit. It's a little below market rent but it's nowhere near the 2k a month mark per unit (maybe 1700 a month per unit). What I should've done was gathered more comps to get a better view of how my property will perform. I was a little off with the calculations because now I believe I need to put more into the property by updating it and all that to get the rents up to break even before moving out of it. But I'm still going for the goal to get it to cashflow even $50 bucks a month, but in the beginning, I was calculating it to cashflow about $400 a month once stabilized.
So a couple of things I needed to improve here:
* Gather more comps to get a better view of how the property will perform
* Be more conservative with the numbers so that there's a bigger margin for error
Good luck man! Hope this helps!
