All Forum Posts by: Ryan Braman

Thanks @Dave Foster, that makes sense. I definitely feel like I'm overestimating the maintenance, but with no experience I didn't want to deviate from the norm yet. Hopefully I'll know enough in a year or so to help develop more realistic numbers for future analysis.

I've briefly thought about dumping it, but I've got the emotional part of me where it's like, I just met all the tenants, had great conversations with all of them, it's not like they're my friends but there'd definitely be some awkwardness there. I know that's a terrible perspective and I have to work on thinking of this more from a business mindset.

Good evening Robert, I'm in Lexington, just up the road from you, but keeping an eye on Roanoke as the market there has more opportunities.

With regards to your question, I'm a total idiot with investing, but have been actively working to get smarter at it, primarily through the BP podcasts. I started from podcast #1 and have gotten up to around 40, although there are several that I need to listen to while I'm at a desk so I can take notes..I typically listen while I walk to/from work so I'm not getting nearly enough out of them.  The following list is 'curated' specifically from what I thought was most fruitful.

#5: dealing with death - good gouge, take care of it now while you are young~ish. Please take my word for that.

#7: making appraisals work for you - I feel like this was an area that I really took for granted, but it's a pretty key component in most real estate transactions...it doesn't seem to get a lot of press time though

#14: cash flow, creative financing and life - #1, inspiring to hear from someone who took a crappy life situation and is working it. #2, Mr. Leybovich really preaches studying the deal, not just jumping at everything. I'd be in a much better financial position had I heard this podcast four months ago instead of four weeks.

#19: Virtual assistants - this is super intriguing, there are all sorts of things in my life that I'd be willing to pay somebody a few bucks an hour to take care of if it gave me more time to focus on the things that will make me more money.

# 30: Conservative investing - I need to invest aggressively, but this guy makes a great point about identifying risk thresholds, which implies you need to put some work into quantifying your risk with metrics 

So I bought a home in Hawaii in 2005, rented it out from 2011 until this summer and sold it when my family moved to Lexington, VA. Thought that doing a 1031 made the most sense, but in the end felt kind of pressured to find a local cash flow property within the 6 month 1031 property identification window. Took what I thought was the best deal around, a $583k, 5-unit apartment building that brings in a gross $4315/mo.

Then I found Bigger Pockets...saw what everyone else was doing and feel like I need to reexamine my purchase. 

I put $268k down @ 5% amortized over 25 years, so this is what my cash flow looks like:

Rents: $4315 - (monthly payment: $1905; Insurance: $101; Taxes: $385; Vacancies: $259 ; Maintenance: $395; utilities: $150) = net cash flow:  $1120

This is not a whole lot of return for $268k, the upside is this is probably one of the better located units in the town, as it's walking distance to downtown, both universities in Lexington, and the local elementary school. I've been told the rents are a tad low for two of the units ($585 for 1/1, $785~ish for 2/1, and since both of those leases run out next summer I may be able to bump the total rents to $4415-$4450 without changing anything else.

The building is in incredible shape, so I don't think I can increase it's value by doing anything to it. The only way I've heard to bump up rents was a suggestion someone gave me to furnish all the apartments and pay utilities, which might allow me to add about $350/mo/unit for three of the 2/1 units. I don't know if that's reasonable.

I feel like I need to be aggressive based on my life circumstances, unexpected passing of spouse = halving of income; I have a well paying job, but it runs out in June 2023, after which I need to find more work or develop cash flow from real estate to support myself and my children. That 5% return on investment just doesn't feel aggressive..and definitely won't get me where I need to be in 30 months.

Looking for recommendations from others who may have jumped in before looking as well, how did you salvage it? Would it be better to turn around and get some of the equity out of the house at the expense of cash flow, just to have capital for better deals?

Thanks!

Hi @Carissa Meek, I'm not a GC, but my dad is and he's sitting right next to me now. His advice is that if you find someone below market price it's because work's slow..if work pick's up again while they are working on your project, you run the risk of getting delayed. Ethical contractors will keep yours on the front burner, but he says there are some real jerks out there that will abandon you when a sweeter deal comes along.

I guess it's probably the same problem if you pay market price or even above market and there's an uptick in work..the key would be finding someone ethical. Maybe accept that you'll pay market price at first and leverage the relationship down the road to get a discount based on some mutually advantageous trade (steer other good opportunities to the GC?)..I don't really know. I'm a complete rookie in this as well, but working just the other side of the mountain as you.

Good luck!

Thank you @Preslie Hicks and @Joseph Bridenstine

Good morning everyone! Recently moved from Hawaii, where I sold my former 'home-converted-to-rental' and used the proceeds to purchase a 5 unit apartment in Lexington VA, where I now reside. Bought my HI house in 2005, started renting it out in 2011, but the tenants and home were zero maintenance so I have very little actual landlording experience.

Recently widowed, 4 young children, 1 young Newfoundland puppy, 2 helpful but sometimes contankerous parents.

Educational background in business and engineering (the ocean kind), currently teaching at VMI..where there is no ocean. :(

There are, however, beautiful mountains, trees, and friendly people! I've been blown away by folk's hospitality and generosity, although it is taking a little adjustment to get used to the small town atmospherics..you have to plan way ahead to do work because small towns don't have the equipment or service resources that cities do.

Only recently became interested in investing for cash flow based on the financial conditions that my wife's passing has set..stumbled on bigger pockets as I charged into landlording with no real plan and no significant analysis. Hindsight is 20/20 as I've utilized my walk into work to listen to the BP podcasts; have gotten through around 30 of them so far, and start to understand how nuanced real estate investing can be. Thankful that God takes care of the stupid, however, and my purchase is looking at a respectable, not necessarily great, cap rate.

I am thrilled that BP exists, excited that in a few short weeks I feel like I have already learned so much but have only really scratched the surface, overwhelmed that I can see a path to financial stability for my family.

I look forward to interacting with and learning from so many of you, and eventually hopefully being a story that can possibly give other single dads and moms hope! Aloha, Ryan Braman.