All Forum Posts by: Alexander Russell

I'd be interested. Thanks!

I'm in the middle of analyzing a potential 6-unit rental property. Looks like a pretty good deal but one thing that concerns me is there aren't any other Multi-unit properties nearby. The county assessment actually values it via the cost method due to lack of comps and as such has given it an assessment value way below what it's actually worth in terms of what it can cash flow as an investment property.

Should i be worried about this when trying to get a loan from the bank. Are they likely to view it in terms of what it can and has cash flowed with rents and derive a value based on that or are they likely to go off of the county's assessment? Thanks for the help.

Hi, does anyone know if you can use a Homestyle Renovation Loan for an investment property with 3 units? I thought i would be able to use this when reading up about it but it sounds like you can only use it for 2-4 unit properties if it's your principal residence (i.e. if it's a second home or investment property, it can only be used for a 1 unit property). Am i right here?

If so, does anyone know of an alternative loan product that can be used to purchase a 3 unit property and also wrap some of the funds for renovations into the loan/mortgage?

Thanks.

Hi everyone. My wife and I are just starting out and have been looking at some initial properties. I came across a 6 unit Multi-Family Property that looks like a good deal from an initial glance but i would like help asking the right questions.

The seller is listing for $300,000 and says that it brings in $57,504 in rent roll (4 units rent at $795, 1 at $785, and one at $827). I drove by today and it looks in decent shape from the outside. It's an all brick property which i like as I would think there would be less maintenance from the outside. All 66 windows were replaced in 2013 with double pane energy efficient windows, three kitchens are brand new and 3 are satisfactory (a little dated but generally seem ok), the furnace boiler was recently rebuilt, the roof is 3 years old and the hot water tank is 5 years old.

It would appear to cash flow well using the 50% rule (i.e. if it CFs $4800 per month * .9 for vacancies = $4,320 / 2 = $2,160 <-- expenses estimate). If i put down 20% my mortgage would be $240,000 at 5% = roughly $1,300 per month and assuming i pay a PMC 10% of rent (or $480), i would estimate CF of around $820. Am I missing anything here?

It falls short of the 2% rule but not by much ($4,800 * .9 = $4,320 / $300,000) = 1.44% but since it CFs well i think that's probably ok.

Since this is my first property, i am just looking for some advice on the right questions to ask. Would you recommend finding an experienced real estate agent who could eye-ball red flags or big ticket items, or go a step further and try to find a PMC representative to view the property with you (i don't even know if they do this kind of thing). 

I would also need some serious help financing the down payment. I've been told that wholesaling is a great idea but i really want to get started with cash-flow generating rentals. Is there a big risk in getting this under contract and failing to get an investor to go in on this with me?

I appreciate the words of advice! Thanks.

Anthony Angotti yeah I went to the meeting last month and enjoyed it. I should be there again this month. Josh Caldwell thanks for the reply, that's some useful initial information. I'll do some more digging to see if it's worth bringing to an investor. By the way, do you have any recommendations for property management companies, real estate agents, and attorneys to work with? Brandon Turner thanks! You're an inspiration and I love the podcasts.

Yeah I would like to bring it to a local meeting soon. The problem is I want to call for more information but not sure how to be taken as a serious investor without having any deals under my belt or a team in place.

So this is my first post on BP but i've been reading topics and stories for months now and have found this community to be very helpful. Just finished up Rich Dad/Poor Dad and now on to Cash Flow Quadrants. Once i'm done with that i plan on reading a few of the Brandon Turner books to get into specifics of real estate investing. My goal is to ultimately build a portfolio of rentals and outsource the management to a PMC.

I recently came across a post from a seller who has 4 properties all on the same street on Pitt's campus that has 25 total rooms. He's listing it for $900k or best offer, says it brings in $100k per year and has 10 years of rental history. Although students might not be the best kind of tenant, i know that the university isn't going anywhere so there should always be a healthy flow of new tenants every year. All of the units are rented out for the next year.

I'd love to go big on an investment like this to start out, but the problem is i'm so early in the process and don't know how i would bring value to an investor. I don't have a team yet (i.e. PMC, accountant, contractors, etc.). Any advice on how i would find an investor and bring value to this? Thank you all for the help.