All Forum Posts by: Andrew Bondarchuk

@John McConnell - great quote, very inspiring!

Hey @Pingal Sapkota! I didn't think of PMI. No, you're not missing anything, I've just never invested before so I'm relying on the collective experience and knowledge of the BP community for guidance. I appreciate your contribution. :)

For PMI, I guess there goes another $150 per month. I could raise the rent by $50 per unit for an extra $200 per month. In your analysis I would have roughly $300 cash flow + $200 from raised rents - $150 PMI for $350 cash flow. Does this sound like a wise investment? Is this a deal?

Hi @Brent Coombs - thanks for the comment! It does make me nervous that I would probably just break even with two loans to pay - if something came up I would already be stretched too thin. Do you have any experience with the FHA 203(k)? 3.5% would be an out of pocket cost of $3,115 which I could raise without taking the 401(k) hit. At a decent interest rate the payment may come in under $500 monthly producing a little less than $200 cash flow. Still not ideal, but do you think doable or too risky?

Okay BP friends - I need your help...

I think I stumbled upon a great opportunity but I would like to hear everyone's opinion and perhaps whether there is anything I am missing.

This is a 4 unit building consisting of studio apartments at 336 sf per apartment (basically shoeboxes). It is walking distance to a university which makes me nervous since I remember what I did to my college apartment (not at all proud of it but this was 10 years ago).

All 4 units are occupied so I don't think I need to do repairs and I won't need to look for tenants. They are renting at $450-$475 each for a total of $1,875 per month, although I think I could raise the rent and the contracts are almost up.

HOA fees are $1,152 per month which sounds extraordinarily high to me but it says that outside repairs (such as the roof) are covered. Real Estate taxes are $50 per month (is this the same as property tax)? Total expenses listed are at $14,424 annually with $22,500 in income for a net of $8,076, $673 monthly.

The property is listed at $89,000. I could probably raise the money for a $10,000 down payment as a loan from my 401(k) which would eat up $200 per month from cash flow since I have to pay it back. Also, I would need to finance the remaining $79,000 and there goes my remaining cash flow. 

Still, if I were to break even to eventually own the property flat out or raise the rent such that I am producing monthly cash flow, does it sound like a good deal?

Or perhaps there are other options I am not considering that would not kill my cash flow.

I appreciate any advice, guidance, suggestions or warnings anyone can offer. I'm excited but I don't want to do anything stupid.

Thanks everyone!

Time, money and fear sound like the consistent obstacles for everyone posting. This is my plan for each:

Time: I have a 2 year old and work 50 hours a week. I also take care of my father in law who has a lot of health problems, is terminal, and is living with us. I free up my time by sleeping less. You'd be amazed that 4 hours of quality REM sleep is actually sufficient most days, then maybe once a week you can "catch up" with a couple extra hours. I stopped watching TV altogether. TV stands for "Time Vampire" in my household. In the time I have freed up I am on BP, studying for my RE license and reading some fantastic books. Currently I am on @Brandon Turner's book, "Investing in Real Estate With No, and Low Money Down." Maybe you've heard of this guy? I have freed up an average of 3-4 hours daily and I am still just as engaged with my family as before, albeit a bit more tired.

Money: So the aforementioned book I am on right now is getting the creative finance juices flowing, but you need to also stop spending money frivolously. I have just finished "The Millionaire Next Door" and "Rich Dad, Poor Dad." Both of these books preach frugality and until I read them, I had no idea that the problem wasn't "I need more money" - instead, it was "I need to KEEP more money." I've created a budget and I now know where every last dollar goes. Some expenses are unavoidable, but there are absolutely categories that can be controlled and reduced so more of your hard earned cash can be put into your investments or paying down those high interest loans and cards. By the way, I heard about both of these gems in the podcasts which I listen to whenever I go for a run. My former running audio of choice  was Classic Rock on Pandora. It would get me amped. Can you guess what gets me amped now? The prospect and thought of accumulating wealth! The podcasts have me running faster and farther than Jimi Hendrix ever could.

Finally, Fear: the fear of losing money, ending up in a bad deal, not having support from your spouse, being stretched too thin financially, etc. There are easily 100 reasons not to do something, but at the risk of sounding cheesy, here it goes: Your "why" must be stronger than your "why not." My why is my kid. I want her to go to a good school and I want her to be financially educated. I also want her to be proud of her father. It scares me to think that she will have a low opinion of me when she is older and finds out I didn't finish college but her successful friends' parents did - so naturally she will believe that we are not successful because I was lazy and irresponsible. Please understand this is not what I believe, it is simply what I fear my child will believe. I am not lazy, circumstances and life abound, even for a college student. I have worked my tail off to rise the ranks in my job and earn a great income without a degree. Now I am working even harder toward our financial freedom. 

I do sincerely hope that my experiences and my plan can spark some ideas for all of you to plan your steps towards taking the leap. And if you do not mind, I will offer just one more cheesy phrase: "Those who fail to plan, plan to fail."

@Douglas Larson - I'm wondering the same thing. This looks like a major success and there may have been unforeseen challenges, but $77k is a GREAT return for 8 months of work. That's a pace of $115k a year if you can keep it up! Are you done with flipping and moving on to other adventures?

Welcome, @Timothy DeCarlo!

I am in Valrico and I am just now learning about the possibilities in Real Estate. It is cool to hear about such early success and I do not look at it as bragging, but instead motivation for the rest of us. It's easy to accept that the guys on TV and in the "free" seminars made a killing in Real Estate and YOU CAN TOO for just $29k, which only serves to discourage people from actually getting started and learning the business. Guys like you help us see past that. I plan on going to the REIA meetings in St. Pete - it is a bit of a trip for me but well worth it. I hope to see you there!

@Mark Rogozinski

Any updates on this? Did you get the property?