All Forum Posts by: Connor Dunham
Connor Dunham has started 12 posts and replied 217 times.
Post: Getting a loan for first multifamily investment property

- Investor
- Anchorage, AK
- Posts 229
- Votes 133
yea, no problem. Also, if you do decide to rent your condo, make sure it will cashflow with financing and with all of the expenses they talk about here on biggerpockets.
Post: Getting a loan for first multifamily investment property

- Investor
- Anchorage, AK
- Posts 229
- Votes 133
@Roy Schauer second what he said too.
Post: Getting a loan for first multifamily investment property

- Investor
- Anchorage, AK
- Posts 229
- Votes 133
AHFC requires 650 for owner-occupants. They have a first time home-buyer class that's really informative about their programs (its free). They are a local private lender so they make their own rules. Down payments: 5% SFH, 10% duplex, 20% Tri and Fourplex and you can drop PMI after 20% LTV (for singles and duplexes). You also need 6 months PITI in liquid assets. Why are you tying up all of your capital in one property? You could easily get 2 multi-unit properties for that much in down payments.
Post: Negative $150 per door cashflow to positive $200 per door. Too optimistic?

- Investor
- Anchorage, AK
- Posts 229
- Votes 133
I purchased my first property back in January. I waited to post until I had a good record of the utilities and expenses. The property is a 3000 sf side-by-side duplex built in 1985 near the university and hospital here. It is a 3 bed / 1.5 bath on one side and 2 bed / 1.5 bath on the other. The layout is symmetric except for the 3rd bedroom is above the garage. I owner-occupy one side but treat the side I occupy (and monthly expenses) like any other rental unit.
Purchase Price:$390,000
Purchase Closing Costs (buyer paid): 7,883.39
Total Price: $397,883.39
Down Payment: 39,000 (10%)
Rate: 4.5%
P&I: $1,778.47
Expenses:
PMI: $ 242.78
Taxes: $454.65
Insurance: $113.19
Vacancy (2%): $68.00 (very good market here)
Repairs (8%): $275.00
CapEx (?%): Not factored in. I read you need 6 months PITI (which I have), but haven’t researched the local costs yet.
Gas: $277
Electric: $28.10
Water/Sewer: $163.31
Expenses Total: $1622.05
Current Rents: $1600, $1500 = $3100
NOI: $3100 - $1622.05 = $1,477.97 -> $17,735.64 per year (including PMI)
Expense:Income -> 52.3%
Cashflow: 3100 – (1622.05+1778.47) = -$300.52
The -$300 cashflow is how the property has been performing since I bought it in February. Since I already have a decent fund for repairs and CapEx, I have been skipping the repairs withholding. Obviously not sustainable long term either.
Total Return for the first year: -3,600(cashflow) + 5,694(equity) + 24,375(6.2% appreciation) + 4,000(tax break) = 31,000
Total paid for property: 46,883.39
Total ROI for first year: (total return/total paid) = 66.1%
There are two things happening in April 2015: Getting a new appraisal to drop the PMI (the market prices here have been growing at 6.2% year over year) and the raising the rent to market rate.
Market Rents: $1750, $1600 = $3350
NOI: $3350 - $1379.15 = $1970.85 -> $24,250 per year
Expense:Income -> 41.2%
Cashflow: 3350 – (1379.15+1778.47) = 192.38 -> 96.19 per door.
There are two projects I have planned for the property in the near future: replacing the 30 year old boiler with a high efficiency one (should knock $100 off heating) and converting the 2bed/3bed configuration to a 3bed/3bed by adding 1 wall, 1 window, and 1 door by splitting the extra large bedroom above the garage. After both of these improvements are implemented the property should perform like:
Market Rents: $1750, $1750 = $3500
NOI: $3500 - $1279.15 = $2220.85 -> $26,650 per year
Expense:Income -> 35.5%
Cashflow: 3500 – (1279.15+1778.47) = $442.38 -> $221.19 per door.
That’s my plus side analysis. My down side (do-nothing) analysis looks like (with rents raised to market):
Market Rents: $1750, $1600 = $3350
NOI: $3350 - $1622.05= $1727.95 -> $20,735 per year
Expense:Income -> 48.4%
Cashflow: 3350 – (1622.05+1778.47) = -50.52 -> -25.26 per door.
Not too great for cashflow if the existing conditions remain unchanged. So, from these numbers it's clear that the PMI, low rents, and somewhat low (10%) down payment are reasons why the cashflow is currently negative. I did know there was a few things that needed to be overcome to get this property cashflowing when I bought it. Any feedback you all have would be great. Also, would you have bought this duplex for a buy and hold?
Post: Been reading this site for 5 years! (Long intro)

- Investor
- Anchorage, AK
- Posts 229
- Votes 133
@Roy N. , @Jon Klaus , @Eric Mauricio
Thanks for the cheers and the up-vote. I've been spending the last 5 years getting educated. I did not have the capital to invest before and it has helped using this site when I need it, but I wasn't using it daily like many of the people here do. Now that I'm actually investing, Landlording and getting started, it seems like a good time to start giving back as well as getting your opinions as I make my moves upwards. I'm finding myself here more and more often.
Post: Been reading this site for 5 years! (Long intro)

- Investor
- Anchorage, AK
- Posts 229
- Votes 133
Post: Just getting started in this - looking for feedback on my general plan.

- Investor
- Anchorage, AK
- Posts 229
- Votes 133
Hi Nathaniel,
Nice start so far. Sounds like you are asking the right questions. What are the opportunity costs? How can I get rid of this debt. etc... I had $85,000 in loans out of school. I'm on year 3 of my ten year plan out of college. It's working pretty good far. I ran the numbers on making the minimum payments (though for my situation it would have been for the 20 year repayment). The fact that the payments are tied to how much you earn puts a cap on how much you may earn 5-10 years down the road to make it worth while. My strategy to get my first down payment and out of renting was to:
1. minimize my required payments (I used the graduated repayment plan)
2. Optimize my student loan payments so I cover total loans interest while repaying the highest interest loans first.
3. Save as much money as possible for down payment with the income left over.
4. buy mutli-family to owner occupy and build equity.
I'm a little further than those first 4 steps now and it's working pretty good. The reason you want to minimize your payments is to improve your debt-income ratio when qualify for a loan (basically your monthly payment). If your repayment plan is for ten years, make a plan for the entire time; year by year, or month by month if needed. Spreadsheets come in handy.