All Forum Posts by: Brady Potts

Hey Laura,

Congrats! That's very exciting. How much do you anticipate spending on the rehab, and are you doing it yourself?

Hey Bridger,

Nice to hear from fellow Montanans, I'm in Missoula myself. 

I would agree with Ian about being aware of the potential challenges with a portfolio spread across the US. Having a RELIABLE team in each place would be a necessity. Then, be sure to factor in the costs associated with having rentals in different states (PM, taxes, biz entity registration, etc.) on top of your normal expenses. That being said, if your company is kicking you funds to live there, I would jump on board with your idea. 

Last, because Bozeman's market is so expensive right now, it may be worth looking at how long you plan to be there between jobs. Im not familiar with rents there, but if its remotely similar to Missoula, theres little chance the rent would cover even the mortgage on a SFH. So, you would constantly be facing negative cashflow (potentially a lot) for your "home" while away. Additionally, being so cashflow negative on the Bozeman residence would hurt your D/I ratio when purchasing those other units.

Maybe it's worth renting while back in Bozeman, or purchasing a small MF unit in a few years that would at least break even while you're away. I see long term appreciation benefits in Bozeman, but I would view the cashflow as a big obstacle. 

Hi Jeremy, great ideas. Does the commercial loan have any early payoff/refinance penalties?

Great, tests for meth in MT are about $300, if that helps. 

Mitigation is a whole other beast though. 

Was he manufacturing the drugs in your unit? If so, you'll need to look into mitigation as well. If you have an HVAC servicing the unit/building, meth gets everywhere and can be affecting other areas. Not sure about TX, but in some states that now has to be disclosed with property.

Was he manufacturing the drugs in your unit? If so, you'll need to look into mitigation as well. If you have an HVAC servicing the unit/building, meth gets everywhere and can be affecting other areas. Not sure about TX, but in some states that now has to be disclosed with property.

@Rachel Hertel I have a property calculator that I use (combination of a few different ones out there) that i would be happy to share. Let's you compare different scenarios side by side to see the difference a change in each component will make (price, loan amount, interest, rent, insurance, etc.)

Let me know and I'll shoot it over in a google sheet link. 

Hi all, I am working on connecting with the folks that used to host the Missoula meet up. However, if they are not able to do so again I will go ahead and organize one. Hope to have them up and running in March. If you want to connect please shoot me a message.

Hello!

Is there an ongoing meetup in Missoula? From the content of this thread, it looks like there had been at one point. 

If not, I would be looking to start a monthly meetup fairly soon. 

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $295,000

4 BD, 3 BA - SFH with detached 2 car garage and 1 Bed, 1 BA apartment.

What made you interested in investing in this type of deal?

This was a house hack that allowed my wife and I to purchase our first rental properties. The SFH was already rented with a long term tenant. We moved into the 1 BD 1 BA apartment.

How did you find this deal and how did you negotiate it?

I found this deal online with a Zillow notification - listed at $305,000. As soon as it hit the market I called my agent to get us in for a showing. I ran the numbers through my calculator and found that I could make it work at $290,000. My agent knew what the other houses next door went for (by the same seller) so he was confident they would accept the offer. We made the offer that morning and it was accepted.

How did you finance this deal?

VA, 0 Down, with 5k in seller credit to pay off other debt.

How did you add value to the deal?

The SFH rent is significantly below market value. It was rented in 2014 for $1,100/month and hasn't changed since. Comps in the area are going for $1,400-1,500.

What was the outcome?

We purchased the house and rent out the SFH while living in the apartment. After we increase the SFH rent to market value and rent out the apartment, we will cashflow $150 after all expenses, capx, and reserves. We are also looking at refinancing to take advantage of lower rates which would add another $140/month in cash flow.

Lessons learned? Challenges?

The property management company was the party that arranged for certain repairs to be completed per the VA appraisal. They had unqualified and unskilled workers perform several repairs that were both dangerous and ineffective.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Realtor
Mortgage Broker
Inspector
Appraiser
Property Management Company