All Forum Posts by: Chad Adams

Total Monthly rents = $2,150
Asking Price = $200,000
Yearly taxes = $950
All units are 2 bed 1 bath.

Rent is slightly below market, could be raised $40-50 per unit.

1960's construction, hard wood floors, brick exterior, new HVAC last year, seems to be in overall good condition (no deferred maintenance to speak of). It was built as a 4-plex, it is not a converted house.

All units are separately metered for all utilities except trash (owner pays). Also there is a light pole over the parking area that the electric is paid for by the owner.

Owners are out of state and seem motivated.

Over all the neighborhood is nicer, but right next door there is another 4-plex (studio apartments) that is in very rough shape (sold 2 years ago for $45,000).

I'm estimating expenses as:

8% vacancy
8% Maint & Repairs
10% Property Mgmt (though I'll do this myself)
$950 yearly taxes
$613 insurance (I'm estimating that using this calculation = Purchase Price / 1000 * 3.5), but the result seems a little low to me, can't remember where I found that formula, perhaps here on BP?

I'm estimating I can purchase the property for $175,000-$185,000.

What am I forgetting?

Based on a $175,000 purchase price AND the expenses above AND not raising the rents AND 100% financing @ 5% for 30 years (though in reality I'd be putting 20% down), I show a cash flow of about $130 per door ($521 total) per month.

This would be my first investment property.

Thanks for any advice/guidance you can provide.

Chad

@Eric Fernwood Thank you.  Very good advice.

@Larry Turowski Thanks!

@Marcia Maynard Thanks!

Thank you for the great advice. I'm pretty new to this community, but it blows me away how knowledgeable and giving the people are here.

@Marcia Maynard I REALLY enjoyed the podcast you just did, thank you.

Hi Gary,

Did you ever find an agent?

I emailed Jo recently and she replied that investors were not her expertise.  I'm looking for an agent as well.  How has your search gone?

Thanks, 

Chad

Hello everyone,

I've been reading and listening to everything I can for the last several months. Thank you to all of you for making BP such an amazing place full of awesome info.

I am beginning my search for my first investment property and I'm having trouble deciding which direction to go. I don't really have a mentor, so I'm hoping BP can be a "sounding board" of sorts for me.

So, what are my goals:

I'm interested in passive income with a focus toward building up a portfolio of rental properties to provide income during my retirement (still 20ish years away)

At some point in the future (retirement years), I know I'd like to have 10-15 (or more) units that are mostly paid for and require fairly low maintenance (quality construction, nicer neighborhoods).

I don't live in an area that appreciates well, so I'm mostly focused on cashflow.

Other info:

I'm pretty handy. My dad was a handymand while I was growing up. I built my own house (I didn't GC it, I actually built it).

So, I'm trying to develop a plan of action. Right now the plans available seem to fall into these areas:

• Single Family Houses - focus on houses that need work. Buy, rehab, rent. I don't see many of these that seem like they would provide decent cash flow.
• Multi-Family - focus on duplexes, triplexes and quads.
  
  • This seems to cash-flow a lot better that SFH.
  • Because of my goals I would rather end up with MFH designed to be MFH, but it seems the SFH converted to MFH cash-flow a lot better, so I wonder about focusing on cash flow in order to build experience as well as bank some extra money to reinvest down the road.
• Multi-Family - the best cash flowing properties where I live seem to be small apartment complexes (less than 20 units). I have found several that are 5 to 15 units and the numbers seem to look best on these, almost to the point of it seems too good to be true so I feel like I'm missing something.

More Info:

Average rents in my area:

1br = $350-$425

2br = $500-575

3br = $650-800

I don't have a lot of Cash in savings. I'll be using a $60,000 HELOC to help finance any deals I find (at least to get started). I work full time as a software developer (home office), but have a fairly flexible schedule.

Looking for guidance.

Thanks,

Chad

Hi Gary,

I've lived in the Joplin/Neosho area my whole life.  I've bought and sold many properties, but they have always been my own personal house.  I'm just getting started in real estate investing.  I'd be happy to pass along the names of the agents I've worked with in the past, but to be honest I don't know how investor friendly they are.  The best one I worked with when trying to sell my house was Jo Kleinsorge (http://justcalljo.com), but that's been about 3 years ago.

I'm eager to talk to and meet other investors in the area.  Good luck with your search for a realtor.

Chad

Thanks everyone for the warm welcome, and even more THANKS for making BP so valuable.

I've been lurking for several weeks and have already learned a TON.

Thanks,

Chad

Thanks @Rob Scarborough !

I'd be interested to learn more about how your plans are changing.

@Gerald Harris Thanks Gerald. I have the keywords setup for my area and I've already went to lunch with an investor in the area that I found on BP. Thanks for the advice. I admit that marketing/lead generation is probably my biggest area of confusion. When I first started thinking about REI, I assumed I'd just find a property on the MLS. I'm starting to think that in order to make the numbers work, that may not be possible.

@Paul Timmins Thanks Paul.  I've read the UBG, and I've listened to 10-12 of the podcasts so far. I'm having trouble locating REIA clubs in my area (the one I contacted is no longer meeting, next closest is about 1.5 hrs away). I just ordered this book as I think that's the direction I want to go. Thanks for the great advice and awesome links.

Hi everyone,

My name is Chad Adams, I'm brand new to real estate investing.  My day job is creating custom software for small to medium sized businesses.

I've always loved real estate and considered investing several times, but life always seemed to get in the way.

I'm almost 40, have been married for 18 years, have two kids (ages 13 and 11).

My only real experience with real estate has been my own primary residence. In those 18 years of marriage I've lived in 8 different houses. And of those I've sold 3 of them FSBO. We've never lost money on a house, so guess you could say I've done 7 really slow flips :-)

My goals are to acquire 12-20 free & clear properties (or units if we do small multi families) over the course of the next 20 years. I'm looking for retirement income through buy and hold rental properties.

Chad