All Forum Posts by: Brian Armstrong

Like @John G said you need to talk to a commercial banker/portfolio lender. Some of them do offer 30 year DSCR loans but it seems rare. Call up every single credit union and local bank and ask to speak with the commercial real estate lender and explain what you're looking for. My 6 plex got a 10 year term on a 30 year amortization schedule so it pays down just like a 30 year loan but I'll have to refinance in 10 years. The only risk is interest rates rising by then.

Agreed with the others, looks like a nice little property, especially if you can bump the rents a bit

Generally speaking, if you're making $2500/month on a $350k deal you will be lucky to break even cash flow-wise. Don't forget you also are building equity though. I like to figure 4-5% for repairs and 4-5% for CapEx (think new roof, repainting, replacing countertops etc). You may spend less than that in the short-term but if you are considering holding for 10+ years then these expenses will certainly come into play, so I wouldn't lower them too much in your estimate. Same with property management, even if you are going to self-manage I'd include it in your analysis so you know how much you are making from management and how much you're making for the actual investment.

I think getting multi-family and turning into a STR could be a great business model and is something I'm looking into currently, but it carries more risk for sure. From the numbers I've run the cash flow will be 2-3x better typically

Typically when people talk about the 1% rule they are saying that the GROSS monthly rent needs to be > 1% of the purchase price. So if you purchased it at $350,000, the gross rents should be $3500 a month or more. Less than that and you are likely to lose money every month (negative cashflow). So currently we'd be at $42,000/year GROSS rents. Lets take out our expenses - $350/month for repairs, $280/month for vacancy, $350/month for property management, $300/month for insurance, $120/month for taxes, ~$1400/month for mortgage payment, $100/month for lawncare, $250/unit per year for turnover and $100/unit/year for accounting/legal. This bring me to a total cashflow of $6,500/year which IMO is GREAT if you can hit that for a single duplex. If you also have to pay utilities that is another ~$ 300/month, bringing your cash flow to ~$2,900, which would still be good for a duplex IMO. Especially if you are able to put only 10% down and the units don't need rehab, this would be an 8.2% COC in year 1, pretty dang solid deal.

So, what are the rents currently at?

 Can you share those platforms? My current home is a small 3 bed 1 bath that I was planning on AirBnB'ing when I move out, but it is centrally located ~ 10 minutes from 2 world wide business HQ's and 15 minutes from the biggest hospital in town so I feel like it could be great for a corporate rental as well. Do you just contact the business directly, list monthly on AirBnB, or what?

 If the tenant is going to move out then you're going to have 2 units to make ready anyways.

Looks great! What are your rents and cash flow numbers?

This looks like an awesome opportunity, but make sure you are thinking things through. What is your goal in real estate? Do you plan to continue working as a an agent after the year is up? The reason I ask is because while 200k is a lot of money, you will not be able to live off the income that that money makes you as an investor. So you need to ask yourself do I need to start generating income with this 200k? Or is it going to be used for the start of a long-term portfolio? If you want to survive off that 200k you will most likely to choose an active strategy such as flipping or wholesaling to generate your living income. If you put it in more long term buy and hold stuff then you will likely need to continue a real job for quite a while.

Just some food for though.

You've had a super interesting journey in such a short time and you've already experienced more about real estate than most people ever will! I agree with others that getting your license is a logical next step and with your hustle you will no doubt kill it, but only if you actually want to work as a realtor. If being a realtor doesn't sound stimulating to you then I would just look for the highest paying job that you can find (and flexible hours are helpful too). Unfortunately you're going to have to work until you can afford enough investments to support you financially.

Looks like a great house hack, do you plan to keep it as a LTR and repeat this every year or so?