All Forum Posts by: Coty B Lunn

As a general rule, I aim to achieve a net return of $800–$1,000+ per month for every $100,000 invested. This is calculated after accounting for all expenses, including taxes, insurance, utilities (water, sewer, garbage, electric, gas), and an allowance for maintenance costs (typically 5% of gross rent, adjustable based on the building's condition), as well as management fees.

I invest in the Binghamton, NY area both as an investor and as a realtor. Binghamton was recently recognized as one of the fastest-rising markets for local home prices. This market now offers not only excellent cash flow but also strong appreciation, creating well-rounded investment opportunities.

The 60 strongest housing markets heading into 2025 - Fast Company

I completely agree with you Steph!  I attended the City of Binghamton Council meeting to try and defend why good cause eviction is not the way to go!  Unfortunately, after speaking with City Council Members, it appears they are heavily leaning towards creating this new law.

It's great that you're considering your options for attracting a broader range of tenants! I’d recommend checking your local and state laws regarding upfront non-refundable deposits, as these can vary significantly. For instance, in New York State, it's not permitted to collect last month's rent, additional security deposits beyond one month's rent, or pet deposits.

Regarding the carpet issue, even tenants without pets can sometimes leave carpets in less-than-ideal condition after a couple of years. If you're concerned about potential damage, installing laminate flooring could be a smart move. Pergo is known for its durability and ease of installation, which could give you a clean finish and reduce maintenance costs in the long run.

It's wise to consider all these factors as you make your decisions. Good luck!

Hi Kris,

The NAR settlement finalized on August 17, 2024, introduced important changes to how real estate commissions are handled. While sellers are not obligated to pay the buyer's agent's commission, they can still choose to do so if it is negotiated during the transaction. Buyers are now responsible for ensuring their agent’s compensation up front before showings take place.

When you meet your next agent, consider suggesting a meeting to determine if you’re a good fit for each other. This allows both parties to discuss expectations and ensure alignment. You can also negotiate the buyer's agent commission and sign a buyer-broker agreement, which ensures they represent you and assist in finding properties that meet your criteria.

Best of luck!

Hi Rene,

I typically focus on cap rates rather than just cash flow numbers when evaluating properties. A quick rule of thumb I use is that I aim for a minimum profit of $1,000 per month for every $100,000 invested. This is after factoring in all expenses, including taxes, insurance, vacancy, management fees, maintenance, and utilities (gas, electric, water, sewer, and garbage).

Regarding cap rates, I typically target between 15-18% as a minimum for a deal to make sense. Keep in mind, I’m based in the Binghamton, NY area, which is more of a cash flow market with slower appreciation compared to other areas. While our home prices do tend to rise, the growth is generally at a more gradual pace.  Hope this helps!

Hi Emanuele,

I actually did neither. I bought it strictly as an investment property. 10% down, conventional, no PMI.

Hi Greg, 

Actually, I did a 10% conventional loan without PMI. A local bank offers it as their portfolio loan.

Appreciate the referral Steph!

Investment Info:

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

Purchase price: $205,000
Cash invested: $27,112

Bought for $205,000 in the Maine-Endwell school district

Monthly rent (pro forma with 3 month stabilization) $4,800

Taxes: $9,238

Insurance: $2,642

Gas/electric: $0

Water/sewer: $2,451

Total expenses: $14,280

I used a conventional 10% down. With downpayment and closing costs, it came out to $27,112.

I expect to have about $10,000 in repairs on the high side.

The rents are as follows (pro forma): $1,400 (3 bed), $1,600 (3 bed), $850 (1 bed), $850 (1 bed)

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

Trying to add to my portfolio! This gives me a total of 16 apartments now!

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

Unfortunately, I didn't have much negotiation leverage. Many others offered on it and I ended up paying $16,000 over the asking price. It is still a good deal and the numbers work great!

How did you finance this deal?

I financed this deal with a 10% down conventional loan. For $205,000 and all in closing costs, it came out to $27,112.

How did you add value to the deal?

I am adding value to the deal by renting out the one vacancy. I expect to get $1,400/month. I am doing minor repairs <$2,000

When it comes to real estate investing, leveraging your money can significantly boost your returns. Here’s why it might be a smart move:

1. Maximize ROI: With leverage, you can control a larger asset value with a smaller initial investment, potentially increasing your returns as the property appreciates.
2. Preserve Liquidity: Keep your cash available for other investments or emergencies while still participating in lucrative real estate opportunities.
3. Tax Benefits: Deductible mortgage interest and expenses can lower your taxable income, enhancing profitability compared to an all-cash purchase.

If you have the means to buy with cash initially, you can later refinance to unlock equity for further investments or improvements. Whether leveraging from the start or using cash with a refinancing strategy, both approaches offer advantages based on your financial goals and risk tolerance.