All Forum Posts by: D S

Thanks for the reply Mike--some good points there.

On one level you are right, there is no point talking about it--after all I'm not actually at deal-doing stage right now.

However, we are pretty close to having enough info.

The listing specifies the terms of the owner financing so we have a rate.
I believe it was 5% down, 8% interest amortized over 30 years with a 5 year balloon payment. $115k asking price.

It also specifies the size and number of the units and we know it is in Dayton and needs a rehab so I'd expect we could prob use the low end of the rent range for 2 beds, 1 beds and an efficiency in the Dayton area. 14 2-beds, 2 1-beds, 1 efficieny.

The two big unknowns I see are "why is it completely empty?" and "just how much of a rehab does it need?"

If anyone could speculate on typical reasons as to why a large number of units like this might go completely vacant that would be educational for me.

Also, in general, in your experience when someone says it "needs a rehab" are they talking about spending $500 or $5000 per unit?

And third, I'm assuming the owner financing is being offered since a bank wouldn't finance it. Why is that? Just because it is vacant? Or because its full of lead paint and asbestos? How often do properties like this become bank refinance-able with a little paint and carpet and some new tenants?

I recognize that almost all of my questions are asking you guys to speculate wildly but I'm just looking to check my thought processes as I look at potential investments down the road.

Thanks for your time!

Dan

http://www.coldwellbanker.com/servlet/PropertyListing?action=detail&ComColdwellbankerDataProperty_id=12007203&page=property

I'm def just in the learning and research stage but I was curious if some more experienced folks might mind sharing the thoughts that run through their minds when they see a listing like this one?

Is 17 unoccupied units a major red flag or just this sign of a really really disinterested owner? Needs a rehab? Paint, carpet and mini-blinds or all new kitchens? What kind of cost ballpark woulf you put on a rehab on this many units?

The owner financing--likely means a bank wouldn't?

Anyone scared of the 5 year balloon on something like this?

Just trying to see if I am thinking along the right lines...

Thanks for the advice Tim. What you say makes a lot of sense.

There are so many nuances as to how to get into REI I think your fairly simple approach should work well and give me time to do the research as I ease into this.

Likely one of the couple large cities in SW Ohio. Not sure at this point.

I've moved a decent amount in the last few years and have never been able to buy before now. I'll be finishing my MBA and settling down in the Midwest and want to know what the best REI strategy to pursue would be? Have capital, good credit, but limited time and limited RE experience.

Options I'm tossing around....

-rent something reasonably nice/small for the wife and I to live in and invest in a smaller apartment building or commercial property

-go owner occupied on a cheap 4 unit place
(not sure wife will like slumming it-or that I would like the lack of investment/personal life boundaries)

-buy a 200k house to live in and invest in a smaller 4 unit-ish sized place

-buy a giant 400k house and just fund the IRA and don't bother with REI. I'll prob work 50-60 hours/week at the JOB with a very stable firm and I expect I have some super solid upside options there.

My parents had 2-3 rentals when I was growing up, I worked for a property manager before while in undergrad, ran a successful painting contracting business, am solid at negotiating and selling, have spent my share of time in rough neighborhoods, but I'm concerned I may be too much of a nice guy to ever get too good at evicting poor people. Maybe commercial would be better for me? I don't mind getting tough with other businesspeople.

Anyways I'd love to hear any thoughts as to what type of REI investing might fit best with my lifestyle, time constraints, experience and financial situation.