All Forum Posts by: Clinton McGilvray

That's a great deal! Sounds like we are in similar positions. Contractors are hard to find and motivate but if you find a good one possibly incentivizing them with some of the upside might motivate them to focus on your project and finish sooner.

That's great that you are interested at such a young age. I'm a property manager and Realtor in Zanesville, OH.

My free opinion is that you don't need college to be great in this industry.

Everything you need to know can be learned for free online or from a mentor. If you insist on getting a college education/experience, DO NOT go into debt in order to do so. Real estate is results based. You will not be compensated more just because you went to college so do not start out in a hole. Student loan payments will restrict your freedom to truly pursue this industry. It may take you a year or more to really build a sustainable business and if you don't have savings or minimal expenses when you are starting you may be derailed into something else.

@Alberto Nikodimov Did you end up using EZ Repair? I'm a property manager currently looking at my options.

@Robin Simon Ohio has it's benefits. Very low cost of living and low prices compared to many places. Our local market still casflows very strongly but it's hard to force appreciation, which is necessary for a successful BRRRR. It's a rural area so not a lot of comps for multifamily and they don't sell very often.

@Austin Steed it's a commercial loan. 80% LTV and a 20yr amortization.

@Kyle Curtin if the overall deal is a 12% cash on cash return and you put up one fourth of the cash, your return is still 12%, not 3%. It's the same ratio or percentage whether you put up all of the cash or only part of the cash.

@Nicholas L. Yes we're an hour east of Columbus

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $45,000
Cash invested: $60,000

Duplex purchased for 45k, one unit occupied, rented for $500. 15k rehab, both units now occupied, gross rents $1,450. Appraised for 73k, cashout refi'd 58k. 400%+ CoC and 46% return on equity.

What made you interested in investing in this type of deal?

I'm a realtor and property manager in the local area. I am building my own personal portfolio.

How did you find this deal and how did you negotiate it?

On the MLS.

How did you finance this deal?

Purchased and rehabbed with a line of credit.

How did you add value to the deal?

Replaced the furnace and A/C units and a light rehab on the vacant unit. Occupied unit is Section 8 so bringing them up to market rents is hardly noticed by the tenants.

What was the outcome?

Completed BRRRR, left $1,600 in the deal so cash on cash is 400%+, putting $500 in my pocket every month(cashflow and I self manage). Return on equity is still 46%

From what I understood of your question, the condo will cost $1,250 per month but will only rent for $1,000 when you leave the area. So you are paying a premium of owning a condo with an HOA that can change their fees. That sounds like a bad plan since it would also be cashflow negative after you move out. You would be gambling that rents and home prices will go up enough to make this a good deal. Especially for your first deal, you need it to be a good deal from day one. That is also 40% of your pre-tax income going just towards your basic living expenses. That is a recipe for disaster.

If I were in your shoes, I would try to house hack with a duplex or a larger home that had at lease three bedrooms to rent those out to roommates or AirBNB.  If I couldn't find that, then I would continue renting as cheaply as possible rather than buy a condo like that.  If it goes poorly, you will wipe yourself out financially and be afraid to invest in the future.  You can't invest if you spend every dollar that you make.  Read the books that get mentioned in the podcasts, listen to other channels like Dave Ramsey.  Learn, plan, act.

@Kevin Howard we offer online payments, have a few dropboxes located at our multifamily properties, and then implementing strict late fees. I don't do any in person pickups so I wait until the 2nd to pick up all of it at one time and make one trip to the bank. Only ever had to charge one tenant late fees so far.