All Forum Posts by: Alex Owens

What's going on Trey, I just graduated from OU as well! I remember seeing you play ball a few years back. Glad you are preparing for life after the NFL, as so many athletes do not do so. Also glad to see you have found BiggerPockets! There is a wealth of information and tools in this community and everything you could possibly need to be successful.

As to your question, Ardmore and Shawnee are both good markets to be investing in right now. I personally would lean more towards Shawnee if I was in your position because it seems like the upside potential in that market is higher. There are several investors in OKC working on projects in Shawnee as well as new developments in the city. The area has good schools and the population is growing. Also, Shawnee is in the OKC metro, and if you are successful in that market then there are a lot of close markets to Shawnee you could be successful in as well. Ardmore, on the other hand, is a bit more of an isolated city in that there are not a whole lot of cities in that area with large populations. Sure you could be successful in Ardmore, but realistically how much can you scale your business in that city? You would eventually need to move out of Ardmore to be able to grow and scale. Just my personal opinion, but I think Shawnee is the way to go! 

@Fareed R. What are you renting it at?

I use Jeremy Proctor from A-Pro Home Inspections. His company provides additional services that normal inspectors typically don't - including a floor level reading to see if there is any shifting in the foundation as well as a moisture reading to detect any moisture build up in the walls. On top of that, he provides a warranty that will pay for any major issues found after closing that were not mentioned in the inspection report. These extras are all at no additional charge. Super good guy and excellent inspector!

@Antoine Martel thank you a lot man! I appreciate the warm welcome! 

@Joe Scaparra I really appreciate the encouragement! I have to admit that the apartment complexes initially turned me off from this investment, but the more I started thinking about it I realized that I have the advantage over these complexes. I think I need to be careful with rent increases - especially in the beginning. However, I plan on house hacking one side and upgrading it slowly. Eventfully I think I will be able to get $900 out of it when I move out. 

@Andres M. @Scott England Andres, I believe Scott is eluding to creative financing which is an amazing concept. There are certainly other ways I could have purchased this property. What I have not mentioned yet in this thread is that I offered the owner of this duplex a seller financing opportunity; I actually offered two different seller financing options. Ultimately, he decided to decline the two offers (even though they were for a higher purchasing price) and go with traditional bank financing. 

Because I have good credit and could qualify for a mortgage, I decided to go that route. However, to purchase my next investment, I will likely not qualify for bank financing on that property. Therefore, I will have to utilize a strategy like partnerships, hard money, seller financing, private money, etc. @Brandon Turner has a fantastic book on creative financing - I believe it is called Investing with Low and No Money Down. I read this book and it gave me the general knowledge about several different creative financing strategies. I highly recommend reading this book! 

@Derrick E. I appreciate the encouragement! I have to admit it was tough to turn down a free car, but ultimately I took a step back to see what my long term goals are realized that the car money could be used for something much greater. Depreciation vs. Appreciation. 

@Scott England I really appreciate you taking the time to give such a thoughtful reply! I want to give a few comments on the points you made.

1) Location: I completely agree that the surrounding apartment complexes effect the home value, rent value, and marketability. However, I realized that the apartment complexes are essentially offering me free marketing. The complex across the street has its leasing office about 100 yards from this duplex. This means that every potential client they bring to their property must pass by my duplex first. In my opinion, people would rather choose a duplex that is 500 sq ft bigger and has a two car garage over that apartment complex - or any other in the surrounding area for that matter. 

2) ROI: I am not exactly sure what you mean when you say the Cap and CoC do not "correspond" to the age, location, and building type. I'm no sure what you would look for on a deal like this, but I don't think a 11.70% CoC is anything to turn your head at with $40k invested into it.

3) Cash requirement: $40k is A LOT to have tied up in this deal. However, the property next door (same type of duplex, same layout, same sq ft, sold by the same owner a month ago) appraised for $195k - which gives me decent confidence that I will be able to ReFi in a few years and pull the 40k back out. Also, the $380/month in cash flow assumes a property management expense. Since I will likely manage this property myself until I ultimately sell it, the cash flow will be more like $500-$550/month. 

4) I have already secured this financing - 30 year at 4% fixed. I am working with a credit union back in Texas that provides exceptional rates. I agree that this will tie up most of my borrowing power, but at this point I am not sure how else I would do it. Even if I partnered with someone or used private money, it would create a monthly debt obligation that a bank would look at when I eventually would go to them for financing. I figured might as well us a bank first and then go to private money where it is less important what my debt to income ratio is and more important how good the deal actually is. 

I really do appreciate your feedback, but I believe for my investment strategy at this point that this is a deal worth pursuing. 

@Peter K. thank you for the reply! To fill in the gaps for you, I worked part time during all four years of college. I was able to save a few thousand dollars that I turned and invested into the stock market and crypto currencies (BitCoin and Ether). Additionally I sold a motorcycle that I owned for several thousand dollars more than I bought it for. This gave me about half of what I needed for this property. 

The other half, admittedly, came from my parents. I graduated with honors from OU and my parent's graduation gift to me was a shiny new car to replace the older one I had been driving. However.. I knew that the $20,000 they were planning on spending for a car could be used for bigger and better things and I asked them to invest with me in this property instead of purchasing a new car. This is where the entirety of the funds for this property came from. 

@Rhett Tullis I believe $850 in rent is reasonable, the duplex has rented at that for over two years now. However, I don't think there is much room for rent increases because of the apartment complexes you mentioned. I think the biggest thing that sets this duplex apart is the two car garage, the 1950 sq ft of livable space, and the down stairs study - that the apartments will not likely have. Thank you for the reply, I will definitely be in contact!