All Forum Posts by: Collin Smith

Back in July I found a duplex listed on Craigslist in a desirable area of my town (Florence,SC) but after running numbers it just didn't make sense. They are 2/1 units, one is rented at $575 and the other is vacant because he is trying to sell and didn't want to hassle with finding a new tenant. Fast forward to yesterday (after it has been listed with an agent for a while) I get an email asking what I would be willing to pay. I need to run things through the BP calculator still, but my preliminary number is about $40,000 off of the asking price which would give me about $210/door cash flow with a 30 year mortgage on it. The current owner has had it since 1994 and paid about $15,000 less than what my offer would be. I do not want to insult but it needs to work in my situation, too. The other option would be to offer an own finance price with a lower down payment and refinance in a year or so to pay off the seller. A month ago I may have jumped at it, but now I am in sight of savings that will pay off my current home by the end of the year, which would free up a substantial amount on a monthly basis (we pay extra to get our home paid off) and buying this would probably put that on hold. If this situation makes sense to anyone, what would you suggest?

I have signed e-docs for contracts in Florence several times.

I am in the Florence area and that is where I am currently buying. I am considering the Cola area in the future so that I may have. Place for my kids when they go to school (if the go to USC). I am also considering heading east of here into Conway and the MB area. It will be the first of the year before I can consider another property. 

Ha, just realized I titled this as "New is" instead of "New in".  Sorry about that.  We started with a bundle of 2 lower income homes.  They are section 8 and we purchased the 2 of them for about $74,000.  We reinvest our rent money into those mortgages as well as continue to invest personally into the business.  In doing this, we were able o pay down the first mortgage (2 homes) in a very quick amount of time.  Now we put the previous mortgage amount on top of the other mortgage and are paying it down real fast.  We know we could put that money towards other properties, but neither of us like to have debt and with the mortgages paid off it won't hurt us as bad if a house is empty for a few months.

The whole process is addicting and I need to be sure to keep myself in check.  I have not closed on my personal one yet, and I am trying to convince my wife to go ahead and let me get my next 2 or 3.  Our official plan is to wait until the first of the year and see what is available.

I have posted a few times in different discussions, but I don't think I have introduced myself yet. I am in South Carolina and working on building a second stream of income with real estate. I am not totally new at this, though. I have a business with my brother in law with a few houses that we have. We started that business to be able to have multiple homes paid off and generating income by the time my son is ready to go off to college. We are 2.5 years into it and have 3 homes, two are paid off, generating about $1600 a month in income. The third home should be paid off in about a year and then we will be building our next down payment. With that going, I was ready to invest more, but he was not, so I am working on finding actual income for my family now, instead of supplementing our college fund. Our longer term goal is to have about $40,000 annually in passive income (I use a management company to collect rent and deal with tenants. Working full time, it is well worth the cost). I should be closing in my first deal in 2 weeks; a single family home with a duplex on the property. It was a near steal, in good condition, and generating a little over $2000 a month in rent. After factoring in expenses, taxes, mortgage, cap ex, vacancy,... it will put me about 1/4 of the way to my long term goal. I doubt I will stop there, though, because it is too much fun finding and figuring out the numbers on deals.

After mentioning to them that they don't seem to want my loan, they came back with a 15 year fixed commercial loan. I like this because I don't have to worry about a box % increase in 5 years. It is a little higher at 5.5%, but I know my numbers for the next 15 years. I called them on their attitude and it worked out.

We have a management company collect it for us. They are set up deal with the process and can have people stop by the office to pay. For section 8 it is very worth it, to me to pay 8%.

I am in the process of closing on a 3 family property. I have gone from the commercial side, to the residential side, back to the commercial side on this one. The reason I ended up back with commercial is because it is actually 2 buildings on one property. Because of this it is considered commercial. In the end, though, I have a full 15 year amortization instead of the arm I was originally looking at. I am learning a lot through the process of finding a loan and the little things that can kick you from one side of the bank to the other.

I have a couple section 8 houses that have worked out very well. We use a management company to take care of dealing with the housing authority. We get a monthly direct deposit from housing and then the rest of the payment is dropped off at the manager's office. One house has had the same tenant for years, the other we purchased, did some work, and are on our 3rd tenant. Only one was a problem and it turns out she just lives in a house until it is too dirty (she doesn't clean anything up apparently) and then demands that the housing authority find her a new place to live. $100 cleaning bill and we have a new tenant that loves the house and is always on time.

Victor Webster , you are well enough known in the area for the community work that you do that you have a huge starting advantage. (At least I would think that you do) Use your network and build from that. Just let everyone know what you are up to and that you are there to help them or their friends if they need it.