All Forum Posts by: Clinton Holmes

Sounds like your off to a nice start Joshua. If it were me, I would focus on buying a two-three family, so I could live in one and rent out the others. I would try two things: 1) I'd try to get a home line of equity in an amount high enough to cover the 25% down payment on the new MFR. This would reduce the cash flow, but if I paid back money every month above the payment, I would pay less in interest effectively reducing the interest rate. 2) I would find a really good mortgage broker in the area and talk to them about your situation. They will know the best loans out their to help you achieve your goals. Just make sure they come highly recommended and have worked with real estates investors before. What do other people think? Anyone agree or disagree? Clinton

Originally posted by @Ann Bellamy:

Karen, depending on how it's structured it could be a good deal for you, but the structure matters. Make sure you understand it completely and ask lots of questions. What Kim and I do may not be the same as what you do.

Ann is spot on. The terms as described sound pretty reasonable but the structure of the deal is the most critical part. At the end of the day, who is going to be in control of the money and what actions do you have available to you? Do you know when you will be able to take your money out? Remember the number one rule of investing is security of principal, and to Ann's point, the security of your principal will be decided by the way the deal is structured.

Also, just to be clear, I've never worked with Kim before and I'd be asking myself these questions no matter who I invested with.

Make sure to let us know how it goes!

-Clinton

Originally posted by @Sajan Mahajan:

Just realized numbers are wrong because lawn should be part of mainenence... Overestimating maintenence costs.

57600 (rent) - 7368 (tax and insurance) - 4000 (maintenence) - 12160 (utilities) - 3456 (mgt fees) - 21600 (mortgate) = 9016.

9016/70000 = 12.9% cash on cash is actually 12.9%. I don't think this is bad for the area. If rents slowly rise would eventually hit 15% cash on cash. Would you guys laugh this off?

Thanks for laying out your thought process Sajan. It is always nice to see how other people go about evaluating their investments.

I think you should be careful taking advice from others on what is an acceptable return. Everyone has different needs and risk tolerances. I actually would be pretty happy with a 12.9% cash on cash return. I would suggest asking yourself two things to determine if the 12.9% cash on cash return is good enough for you:

1) What other opportunities do you have for your money? Do you have another investment that could earn more than the 12.9% return?

2) What is your investment goal and does a 12.9% cash on cash return allow you to achieve that?

Best Regards,

-Clinton

Hey Everyone!

Just wanted to let you know I survived my first closing. :) I only suffered one small injury; a case of carpel tunnel from signing 100+ pages!

Thanks again everyone for your help!!

Clinton

Welcome @Brooke Spaulding! I'm a real estate investor in the greater Boston area. I just used Mass Housing to buy a 2 family in Salem. I was originally looking in East Boston before I bought in Salem. The popular spots are Maverick Square, Jefferies Point, and the Eagle Hill area. I highly recommend you walk through the area and a few units that have tenants, especially if you will owner occupy!! Some of the places I saw looked amazing from a cash flow perspective, but once I saw the prospective tenant pool, I realized I'd be lucky to cash flow at all. Just my two cents, feel free to message me anytime if you need help! Clinton

Welcome to BP Joe,

I was in your shoes less than a year ago and am closing on my first deal tomorrow.

The best thing I think you can do while accumulating your reserves is build your knowledge. In the limited time I've been involved in Real Estate, I've realize this is not an industry that is forgiving to the uneducated.

I learned a lot by attending local real estate investor events, working with agents to see properties, and reading just about anything I could find on real estate. The BP Learn tab is a great starting point.

I also agree with @Sid Siddiqui regarding wholesaling. Not only will you learn how to negotiate, but you will learn how to evaluate a deal and sift through the garbage that is out there.

Also, as a side note, if you have a 401k at your job, you can use a certain percentage of that money for your reserves.

Good luck and don't give up!

-Clinton

Hey Gabe,

If you haven't already, my advice would be to go visit some of the other apartments / houses in 46224 that have tenants. This will give you a better idea of the tenants you will attract and if the numbers your projecting are going to be worth it.

Where I invest there are a few lower end neighborhoods that I was considering because I could get almost double the cashflow I could get in some of the nicer neighborhoods. When I walked through some rented units in the lower end neighborhoods I saw the tenants currently living there and I knew that was likely the type of tenant I was going to be able to attract. I quickly realized that with that type of tenant, I would do well just to break even, so I ended up passing on their areas.

Hope that helps!

-Clinton

Originally posted by @Priscilla Z.:

Alright.....now my answers to your questions:

1. We forgot to bring the cashier's check for our closing costs....as funny as that sounds we were already at the table and I was signing documents when I realized it. My partner ran out to the bank (luckily 3 min away) and brought it back before closing was finalized.

2. Yeah, closings would be easier if you could get someone to sign for you! LOL. There is a way for this to happen BUT, since it's only your first closing I won't get into those details right now.....I honestly can't think of anything that would make a closing easier.

3. Clothes! LOL. Casual dress is fine, at least at my title company but I am a regular there. When we first started I would go in "business attire" so maybe you want to begin there.

Good luck! It's fun and before you know it going to closings is just going to be another thing on your weekly to-do list!

Excellent! Thanks for the help Priscilla. I'll make sure to let you know tomorrow how it goes.

Haha - I'll make sure I don't leave the check on the table :)

I guess not you got me thinking more, I have three questions:

1) What are the things most common things people forget to bring?

2) Is there anyone one thing that makes the closing easier?

3) What do people wear?!

Thanks in advance!

-Clinton

Hello fellow BP Members,

I'm closing on my first property tomorrow. Any last minute advice?

Thanks in advance!

-Clinton