All Forum Posts by: Brian Zintel

Thanks for the input Roger!

I have (2) prospective tenants for a property of mine. One tenant works at a restaurant and the other at country club. Both tenants claim that most of their income is cash and that they can not meet my minimum requirements for income. I require 3X the monthly rental income in gross salaries. Both tenants have a good credit history and no previous evictions. My properties require security and first months rent at move-in. The tenants are willing to offer last months rent as well at move-in as an added incentive to compensate for their particular situation. We are offering them a 1-year lease.

Any experiences with this type of situation / potential issues?

I purchased my first home a little over a year ago (2-unit Property). I placed a 5% down payment on a conventional 30-Year Mortgage.  

I've completed a kitchen renovation in one of the units that has seen an increase in the rental price of the unit. The market in Buffalo, NY is still hot and sale prices are continuing to rise. Aside from saving cash for a second 2-unit property purchase, I'd like to do a cash-out refi, to fund a portion of the next purchase.  Is it possible to cash-out refi with as little as 5% down.

Pending any kind of bank assessment, I would be expecting somewhere in the neighborhood of $225K on a mortgage with a balance of $192K

I concur...THE ABC's of Real Estate Investing by Ken McElroy was the first real estate book I ever picked up. It's cut and dry, and lays out sound principles for property management, operation, and investing.  

Lamar,

Welcome to Bigger Pockets...

Talk to your real estate agent, If you do not have one, then shop around. They will be able to assist you in determining area's that are best suited for the type of investing you'd like to do (i.e. buy and hold, flip, etc...)  The Buffalo market is still hot and the supply is low, but there is still value there to pick-up. Buffalo has excellent opportunity right now.

Your real estate agent will have access to on and off market opportunities. They will have access to tax records, user fees, and other costs associated with the property you are interested in.

Good Luck!  

Rich,

It's a B - C type area. I'd spend more time investigating properties in the West side, North Buffalo area, and parts of the Amherst area.

The housing market is on fire right now, so the area's I've mentioned will come with a premium, however the ROI in these area's are much more attractive. The revitalization that is going on downtown and in the surrounding areas are driving the investor and renter interest in these area's.

Cheektowaga is a stable area with many single family homes, some multifamily. I personally wouldn't invest in this area but don't let a strangers opinion deter you. The higher property taxes will eat into your returns, and with mostly single family homes, I do not see what will be driving renters to these area's. I would think your vacancy rates would be higher. 

I invest in the North Buffalo Area. A large mix of multi and single family homes with a decent range of property values.  Vacancy rates are virtually nill, due to the high demand. Taxes are very low. I believe that the mass development going on downtown and in the surrounding area will drive renters outward to the area's like North Buffalo and the West side. You can already begin to see the massive increases in rent rolls downtown, Development tends to expand from the epicenter, that is why I am so high on these area's.   

Good afternoon everybody!

I'm in process of investigating my next investment property purchase, and would like input based on others  experience. 

My investment strategy focuses on multifamily properties with little cash down and positive cash flow.  A background on my first purchase made nearly 6 months ago.

Purchase Price: $208,000 (5% down w/ $8,000 credit - First Time Home Grant) 

Unit 1 (Rented) : $1,250

Unit 2 (My unit, Projected income) : $900

Projected (monthly) Income: $2150

Mortgage/Taxes/Insurance: -$1415 / month

Water/sewer/user fees: -$60 / month

Electric / Gas = By tenants

Repairs: -$170 / month

Fix repairs (Furnaces/Roof/Water Tanks): -$50 / month

Less Vacancy: -$215 / month

Total Monthly income = $2150 - 1910 = $240

Cash on Cash return (Money out of pocket at closing: $10,500) = (240*12) / (10,000) =  27.4% / Year

The icing on top: Both roofs for the garage and home are brand new, and the home inspection came through clean. The lower unit had also received a remodel 2 years ago.  The rental area is in high demand, and is an established area. The development / real estate market in Buffalo is on fire right now. 

A second home purchase will typically require a 20% down-payment, and those lending requirements become even tighter for multifamily homes. Some lenders vary from the 20%-25% mark but I'm thinking conservatively.

Other than finding homes willing to be owner financed, what options do I have, with less than 20% down? 

I've found conflicting information for purchasing an owner-occupied home. I'm willing to move to another property, but I do not know if the money down requirements decrease if an owner-occupied home is purchased as a mortgage for a second home. 

Say I can buy another multifamily with less than 20% down, and I need to occupy that home, I will forfeit my $8,000 grant, which will require my to pay $500 / year until the remainder is paid off, therefore my Cash on Cash return drops to 23.7%

Your inputs are greatly appreciated!