All Forum Posts by: Andrew Major

@Tala Brunson to get a loan you could use local CUs or banks, commercial loans, put your partner on the loan, or find a partner/private money.

I hope this helps.

If you are getting out of the military, most of the Transition Assistance Programs have that as an option. There are also certifications and online classes you can do. I know for the Army you can use the Skillpoint portal.

Hi Aurelia! I would say there is nothing different between section 8 and anyone else. The key thing is to make sure they have a security deposit, in case they wreck the place. I would also reference their last two landlords. Their current landlord might be trying to get rid of them because they are terrible and the one prior would have no reason to lie to you.  This should be done amongst other things like a background check, social media check, possibly their credit (debatable for some), and if they smoke, have pets, etc. An interview is also a technique to get to know them along with the clean car check. The car is a reflection of how they will treat your property.  You can do a lot of this yourself and there are also businesses you can pay to do a lot of these services

This link is pretty good and will teach you how!

https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan

@jaleesa harrigan it depends on your market I am a numbers guy and have a spreadsheet and I collect data from rentometer, zillow, county website, and look at the city as a whole. But when it comes to it if i can conservatively input my expenses vs income and it is positively cashflowing it is good for me! It is normally around the 1% rule

I like to use the calculator in conjunction with the county website, rentometer, Craigslist, and Zillow. It gives me all the key historical expenses and mg criteria is at least $100 cash flow per door. But as a quick rule of thumb I do use the 1% rule. I’ve only done this once. But I did buy it while I was in Afghanistan and had a good agent so now I’m living rent free 

@Jaleesa Harrigan hi I am also military. I say buy it if the numbers work because it will be good no matter what or do a flip. If you’re renting you’re just wasting your money. The problem you have to figure out is finding the deal and once you leave finding a good property manager

Education: In preparation for my first buy, I have listened to every podcast from BP (mailed on a flash key from my girlfriend) before/during deployment to Afghanistan.  Read books like Rich Dad Poor Dad, Millionaire Next Door, both of Brandon Turner's books No and Low Money Down, 4 Hour Work Week, Never Split the Difference, and many more.  

Assembling the Team: About 4-5 months before going back to Fort Drum, New York. I started to reach out to the remainder of people missing from my team. I got pre-approved for a loan, I got my property manager, and already had my real estate agent.  

Finding the house:  Most houses on the market have been on for many months. And anytime a good one came along they got swiped up fast. I had 3 houses under contract and all fell through because people either wanted too much, wouldn't budge, or it would require a total rehab in which I do not have the time for as I am going to a training exercise for 2 months. I finally found a fourplex (2 2b1ba, 2 1b1ba fully occupied) that has been on the market for a while that my agent suggested to me. I lowballed a fair enough price but not insulting and it got accepted! The person selling was motivated because there was a sickness in the family (I did not know this beforehand). She recently renovated it because she was an investor and just had a new roof. I got it inspected (referred by many) and only minor things needed to be fixed in which the seller fixed for me. I did inherit tenants with pets and some are section 8. I will have my property manager do all 3 leases over again in the next 4 months when they expire (with his better more thorough lease) because the rents are way below market according to rentometer. 

The Numbers: 

-Purchase Price 137000, Appraised 143000

- Rent currently is $2000, Rent in 4 months 1950 (with me living in one of the units) Cashflow before -300 with me living in Cashflow after with me living -200. 

-I am accounting 10% vacancy, 10% management, 7% capex, 7% repairs. Utilizing a VA loan with floating interest rate (currently 4%).

- Mortgage, insurance, management, and property taxes will be about $1500

Looking Back/Reviewing:

- I wish I got more referrals for financing. I am closing this Friday the credit union has taken almost 2 months to get all the paperwork done, even though I am "preapproved". I know VA loans and etc take time, but the way I timed it I should have closed exactly when I got home. I should have cushioned more time.

- Did I assume too much risk by doing a live in because now I don't cash flow for 2 years? When I leave for another duty station I should be cash flowing $550. I also plan on airbnbing when I am there physically, going to try to get a roommate to fill the 2b1ba I am living in, or switching to a 1b if one of the other tenants leaves when we change the leases and bumps the rents to market price. 

- How much do you account for with pet damages? (I am thinking a fee of 200$ or adding a 25$ pet rent) I know my old place charged that price fee.  

- Should I get a CPA and do some cost segregation?  If so where? From local places like Watertown or Jefferson county New York. I don't plan for a majority of my portfolio to be here or incorporating should I do where I plan to incorporate or where I plan to have my portfolio.

- What else could I have done better? Thanks for all your help

@Scott Wolf @Brad Baker I got it past the due date! My agent said this person is sketchy but you were right! It is a trust sale and the owner is out of state.

So I have a New York State (Jefferson County) house with agreed upon price between my agent and the sellers. However the other agent is dragging her feet on getting us the purchase contract returned with signatures. She is definitely being unethical because the house is still listed as available on the MLS. What can I do?