All Forum Posts by: Jeff Bridges

read and learn. If you don't know the terms, learn them. Then learn the strategies. Then select a strategy. Then find a deal. Then tell everyone to include Bigger pockets about the deal to make sure everyone agrees with you it is a deal by sharing your calculations. Have your agent and inspector confirm. Then if you are renting, follow the bigger pockets guide to screening tenants. then follow all of the rules. Then consult BP if you have read all of below/ blogs/ podcasts and still have questions.

https://www.biggerpockets.com/real-estate-investin...

https://www.biggerpockets.com/renewsblog/2013/01/0...

There is something your agent could have done: provided you with adequate insurance to cover your rental. Unfortunately they let you down and didnt suggest you add sewer overflow coverage. I would consider dumping the agent unless he did suggest it but you declined and shopping for a new policy that provides adequate coverage for all known perils to your area. definitely add sewer overflow coverage next time. I like the indepedent brokers who can shop around for the right policy for you. You might have to bring all of your policies over, but it might be worth the savings and having a good agent to help you as you grow in future.

consider talking to these guys below for quotes:

https://www.pardridge.com/about-us/our-insurance-c...

I'd work to calling service master and negotiate their rates as they bill the max that insurance allows them. Since you will be paying out of pocket, they might cut you some slack.

You can't shop around for emergency coverage from service master since they helped you clean up immediately following the backup and that ship has sailed. But you can solicit multiple bids from contractors for the put-back and repairs to the basement or whatever needs to be restored once everything is dried out by service master. Service master would be a mistake for doing the entire rehab after the inital clean up, sanitizing and dry out. get three bids from local non chain guys and at least get cost control for the rehab. You need to find non-retail contractors so you can minimize your costs and that is the only thing within your control at this point. You have time now that things are stabilized.

Also consider getting those backwater valves installed on your sewer main to protect you in future. Illinois isnt getting out of its budget crisis anytime soon so dont expect for them to come out of pocket for your losses. Home warranty will replace something defective inside your home, but not something defective outside your home and not pay for associated damages, so not worth pursuing.

It takes me all year long of looking and being patient and doing lots of analysis before finding a deal that works for me. They wont fall into your lap. The sellers market doesnt help, but there are always deals to be found... You just have to look harder and be patient..

So essentially its a breakeven cashflow opportunitiy. So when you move out, its not worth keeping the place fully rented. That would just be an unpaid internship as PM with maybe some equity pay down of 14k in 5 years. Doesnt seem worth the tenant hassle.

 Longer vacancy means your 5% vacancy needs to be raised to something like 8% to account for longer vacancy between tenants. or you can rent for 650-700 and get it filled faster. but the point is you have an agent admitting that 750 is pushing it and would deter many applicants from considering. That doesnt instill confidence to me for use in my calculations... What if you had a bad vacant streak for 3 months and needed to lower the rent to get it filled. Will that agent reimburse you for your vacancy? I'd lower the rent for your analysis and see how it pans out, so you have real honest numbers to be used for your rental. Not fluffy income used for depreciation or some perceived tax benefit. real solid figures you can take to to bank.  Otherwise what was the point of the exercise. good luck.. consider posting the new calculations based on 650-700/ per unit to be conservative...

median rent means midpoint. Do you know if your multifamily unit falls above or below the midpoint? I would think duplex property might result in lower rent than a detached single family property. Who said 625? Usually you want to use conservative rent numbers for your unit, because your calculations dont pay the rent, tenants do... what would your numbers look like with 1250 in total rent... Prob would make you barely at breakeven no? Are you saying a single unit would get 1450? I guess I'm not sure what you are projecting? A single unit rented or both units projected? 

The VA funding fee would be 3225 for you to be exact. That is not including the 1% lender origination fees. also 500 appraisal fee and then there is the settlement fee from your title company and the title insurance. so 2000k for closing seems really low.

OK VA loan lets you live in one unit and rent the other for at least a year before you can consider renting out the other unit and moving out. Is that your plan? Can you talk it out what you are actually doing from lending to living in the unit? Are you budgeting for the VA funding fee and rolling that into the loan total? Because your loan would go up to roll in the funding fee..

Why are you calculating with a loan, yet with no down payment? What lender would give you a no down payment loan on investment property? minimum down payment is usually 20-25%. If "currently renting for 625" per unit, why is your estimated cashflow 1450 for both units rents. Isnt that wishful thinking? You are expecting 2189 a year at your calculations, however, its actually 2 units, so you are getting 1050/door/year which is pretty thin for the privilege of a mandatory job as property manager for 2 tenants, since you dont have enough budget to hire a real PM and scale your empire. Yes you have 1 roof (maybe), but you still have 2x the tenants and 2x the toilets and all the responsibility for the 3am phone calls.... I don't see this as a deal. I see this as a valuable learning experience on how to hone your analysis. Keep trying, keep practicing. I'd shoot for a minimum of 200/month/door. My minimum cashflow is about 330-350/door (with property manager calculated in my analysis). Set your standards higher. Your ROI looks really good because you miscalculated how much you would need to put down up front. that will change once you correct.