All Forum Posts by: Andrew Flora

It depends on 2 things.

1. Do you plan to add significant value? If so, you may be able to actually gain tax free cash by refinancing later.

2. Do you want to use your available cash to buy one property or multiple? If you only want 1 property just buy it cash and you will still have the ability to refinance later if you change your mind. Otherwise If you have the ability to use bank financing from the start you will likely get better terms and you can lock in a low rate on several homes.

@Greg Stetz with good credit I wouldn't see why you couldn't get bank financing unless the house is way out of your budget. FHA 3.5% down.

I get the best results from Facebook Marketplace, Facebook groups(usually several different groups for tenants, landlords, etc, and a yard sign.  Craigslist is basically not even worth my time to post it in my area, Zillow is kinda the same but occasionally find people that way.  Newspaper classifieds work well but typically results in an older demographic.  Facebook is by far the best marketing tool in my belt.

Also, go to your local REI meetup, sometimes landlords can send good prospects to each other when they have no vacancy.

@Marci Stein I'm a PenFed member but last I checked they wont refi for people with more than 3 properties. Do you have a primary residence as well?

I would buy this if it was in my local area and I could manage it myself.  The numbers are a little thin for an out of state investment.  You don’t have the margins to support the risk.  If your property manager does a sub par job, if you have to evict a tenant, if you have a water leak or unexpected maintenance(something always happens when you’re least prepared to pay for it), if you get sued, if you have a double vacancy issue at some point, or a tenant trashes a unit, etc you would be reaching into your own pocket every year to subsidize your investment.  This would likely be a break even investment and your only gain would be long term equity gain, and appreciation IF it appreciates.

I take investments like these in my local area because I can increase cash flow by self managing, mowing myself, doing some maintenance myself, evicting tenants myself without an attorney, cleaning and turning over units myself, etc but when you’re out of state you’re paying a premium for all of that and trusting that people will do as good of a job as you would yourself(they never will).  It’s up to you, but think long and hard about the worst case scenario and what it would do to you financially.  If you won’t miss the 25k and you could easily spare a few grand out of your pocket without it effecting you’re life then go for it and wait 15 years to reap the rewards, but if you want supplemental income and accelerated wealth growth pass and keep looking.

Just came across this old thread. Have any luck with splitting water? Did you have a plumber do this or did the utility company do it for $2,000?

I would buy with those numbers.

Your goal should be to raise rents to $600-625 immediately. Based on his attitude I would assume there is some deferred maintenance that will probably need done but he might be willing to get them rent ready before your acquisition. You might also be able to sub meter the water and get rid of that bill.

Your cash flow will likely get better in 5 years when you refinance at a lower rate. This is a cheap acquisition that be great for your goals and help you scale up more quickly.

Most importantly you will be creating a business relationship with someone that can seller finance an entire portfolio to you and help you reach your goals without the bank shi**ing on you because of DTI, or down payment, or liquid capital reasons.

If you dont plan to buy send me his contact info lol

Buy the guy a beer, and say "tell me about your real estate journey". Like Jay mentioned above, if he is meeting with you it's likely because he is the type of guy that likes to tell the story of how he made it happen. Take it all in but dont annoy him with a million questions. The goal here is to build a relationship with him, buy him a beer two or three times per year as you become buddies, eventually he will grow to trust you, that's when you convince him you can bring value to him and allow him to passively invest in you while you swing the hammer and write him that 10% interest check.

Generally speaking I target MF for buy and hold and I target SF for flips. Hoping someday to have the working capital to flip MF as well and when I come across a cashflow gem I'll hold it long term.

But at the end of the day I'll buy anything of the deal is good enough. I first look to hold long term but if the numbers are not perfect I will flip it for a quick return and reinvest that money into something that can generate a better ROI.

Buy good deals, diversify, and consistantly increase ROI.

Do your thing.

I never suggest college but you're halfway there so you should consider picking it back up next semester. You can hustle as a real estate agent while you're getting that degree.

Regardless of what you do if you want to be a winner dont finance anything unless it makes you money(real estate). For example house hack where you live, buy a cheap reliable car with cash, stay away from consumer debt with credit, and dont take on a single dollar of debt unless it is a profitable real estate transaction.

Then plan on hustling! Grind for 80 hours a week until you reach financial freedom. REI isn't easily so respect the process. If you're a procrastinator, unorganized, or afraid to work you will fail! It's a lifestyle.

Enjoy the ramen noodles. You're 10 years away from steak and lobster.