All Forum Posts by: Scott E.

Putting an offer on a FSBO house should follow the exact same format as putting an offer in on an MLS property.

Same process, following the same terms and conditions.

I love where you mind is at and how organized your post/plan is. Also love that you guys are getting started so young. I did my first deal at 25 years old (a house hack) and getting started early benefited me in many ways.

It'll be tough finding multifamily deals where the numbers make sense right now. Multifamily pricing is really high in the A and B neighborhoods around Scottsdale and Phoenix. With high price per door and high rates, you wont find any cash flow.

STR market is also very saturated and we're seeing more regulation there.

I'd keep the end goal bigger multifamily deals. And for the short term goal, do a house hack as you have planned.

If you need any more direction send me a message. Would be happy to meet up and discuss your goals in more detail.

Yes you are correct with your understanding.

To be honest, I'm not a big fan of any of these arbitrary rules. They are just made up rules that were meant to help new investors run rough numbers on properties but I think they do more harm than good.

You will be much better off if you just start actually underwriting deals. Run the real numbers based on the real property. This will get you to a real estimate on what the cash flow will be if you buy. It might be more time consuming at first, but you'll get good at underwriting deals pretty quick.

You're not going to meet this "1% rule" in Scottsdale, that's for sure. Phoenix is big so I'm sure there are rougher parts of town where you can get close.

You say you're focused on condos though. That means you need to do much better than 1% on rents. The HOA dues are going to eat up a bunch of cash flow.

If you need any feedback about specific pockets of town let me know. I've lived here and invested here almost my entire adult life.

I aspire to follow a similar path some day. Thanks for sharing this awesome and inspirational story Tim!

These construction loans can usually be extended 6-12 months (for a fee). But as Matt said, how are you going to pay off the $100k when you get to the end of the term?

There are properties that meet this criteria. You'll need to look into markets like St Louis, Columbus, Detroit, etc/

Pros and cons to investing in markets like this. Make sure to do a lot of due diligence. 

Some people like to call this the "1% rule" meaning that the property generates about 1% of the purchase price per month in gross rents.

Calculate the return on equity for this multifamily property that you own

NET OPERATING INCOME / EQUITY

If your net operating income is $50,000 per year and you have $500,000 in equity, that's a good return. I'd probably leave the deal alone assuming it's stabilized and in a good location.

If your net operating income is $20,000 per year and you have $500,000 in equity, probably a better plan to sell and move that money into a deal that has a better return.

The title company handles all movement of money.

First rule of negotiation - Don't be the first to show your hand. 

Ask the seller what interest he needs for the deal to make sense on his end. Then start your negotiations.