All Forum Posts by: Andre P.

I think everything @Corina Eufinger said is spot on. I echo her sentiment that your CapEx and Repairs number are low, one way to help ensure you're prepared is to run your numbers "worst case" so I would double both of those amounts at least. Even if the HOA takes care of the roof there are still plenty of items that can and will go wrong that you'll want to be prepared for.

Your taxes & insurance line seems low, I'm guessing you know the tax amount, but insurance for a rental property is typically more than your homeowners policy- I would get a quote and verify the amount.

Otherwise based on what you've posted there is certainly the possibility of a good deal, make sure your HOA allows rentals!

Perhaps someone else can correct me if I'm wrong, but I don't believe you can owner finance a property that you don't own free and clear. So if you refi with a bank to pay your hard money lender, you can't then sell it with an option to owner-finance.

Why don't you find a real estate attorney to help you with the purchase? In my area they will assist with the process for a flat-fee.

A few years ago I decided I wanted to be a real estate investor and worked with my now wife to make that a reality. Our plan, which we've now executed, was to essentially save her entire salary and then use that to buy our home and turn my bachelor pad in to a rental property.

I was lucky enough to have bought my house at just about the bottom of the market and managed a refi last year with a crazy low interest rate.  Since I've lived at this house for a number of years here's how I decided to breakdown the numbers:

Purchase price: $141,000 (amount at refi)

Down payment: $10,000 (cost of upgrades & maint required prior to renting)

Here are my Rental Numbers:

Rent: $1500/mo

Mortgage: $620

Taxes: $275

Vacancy: $115

Repairs & CapEx: $225

Insurance: $90

Given those numbers I cash flow over $160/mo which gives me a Cap Rate of 6.7%, a Gross Rent of 1.06% and a CoC return of just under 20%

Perhaps not the best deal ever on the site but still not bad for turning my primary home in to a rental.

I signed a lease w/ tenants this past week, they move in July 1 and we move out to our house which is being built currently.

Looking forward to spring boarding off this "deal" to the next one!

Why not just buy a duplex (or tri/quad) and live in one side and rent out the other? You can get some experience that way while still qualifying for a conventional mortgage on a primary residence.

@Matt Motil has this perfectly answered on the first reply!

 If she's in retirement and doesn't have many sources of income, can't say that I blame her and if I were you I wouldn't try to force her to either.

If you need some cash to cover expenses a HELOC would be a good route to go depending on how much you're talking about.

You'll surely find advice which says to explain to her all the benefits and potential upside of purchasing a multi, etc. If she's comfortable where she's at, and needs that income for her retirement, I wouldn't risk it on more property- it's her money/property, explain some options, but it's ultimately her choice.

 So given that statement you have two options; 1) Offer the price you feel is justified and see if the seller accepts, 2) Determine this deal isn't for you and work on finding the next one.

Welcome to the forums! Contrary to your initial statement this site is filled with great information on how to get started, forget about the numbers, learn all you can about analyzing deals, how to network, etc. If you don't have a lot of money down right now, work on saving! As a 20-something resist the urge to upgrade your lifestyle and focus on putting as much away as you can.

Figure out what type of real estate investing you want to do (only you know this answer), start attending local REIA meetings and volunteer to work with someone, you get experience for free!

Listen to the podcasts, they are full of great information too.

Welcome to BP!

I like having as much control over as much of my own money as possible, so if I can, I take care of taxes an insurance on my own.