All Forum Posts by: Tyler McLeod

Hi All,

Went to see a condo this weekend. After mulling it over, made an offer, but I can't get the seller to come down quite as much as I'd like. Thought I would run it by people with more experience and see if you think it's worth it. Listed at $85,000.

~1100 sqft, 2 bed, 2 bath condo - class A-B neighborhood (middle-upper class, good schools, higher value homes).

Current owner bought in Sept 2015 for $67,500. They painted the interior and updated the floors to a high quality laminate. Real estate agent guessed they probably spent ~$8k on upgrades.

Building is in good condition - roof replaced within the past 10 years, nice brick exterior, pool is in good shape. Interior needs some updating. From what I saw, it needs new counters and cabinets in both bathrooms, new counters in the kitchen, a new oven/stove, and a washer/dryer connection added. I will look through the HOA information tomorrow, including their latest assessments and reserves, etc.

A comparable condo on the same street (same complex) sold for $72,000 within in the past 12 months. Overall, it was pretty similar but had a newer kitchen and washer/dryer connection.

My starting offer was $70,000 on recommendation from my real estate agent, who owns a couple of condos in the complex. After a couple of back-and-forth offers, seller countered at $78,000. My latest offer was $78,000 if they added a washer/dryer connection, otherwise $77,000. Seller held firm at $78,000 and said they would not install a washer/dryer connection.

I think the rent in this area for a 2 bedroom is between $900 and $950/month. HOA fees are $230/month and include water, sewer, pest, trash, and landscaping.

With that in mind, I am currently looking at:

$900*12*.5 (rent for a year - 50% expenses) = $5400

Realistically though, income would be $900/month and expenses, when I decide to move out and rent through a management company in a couple of years, would be as follows:

Vacancy: $45 (5%)

Repairs: $45 (5%)

CapEx: $45 (5%)

HOA: $230 (26%)

Insurance: $50 (6%)

P&I: $289 (32%)

Management: $90 (10%)

Property taxes: $56 (6%)

Equaling $850/month

My total investment would be $20,600 ($15,600 for the condo and ~$5,000 for upgrades - I'm guessing on the costs).

Cap rate of 4.79%.

Cash on cash return of 2.91%.

I would not rent out right away. I would live there for a couple of years on my own. My hesitation is that I might be paying more than I should at $78,000. 

Thoughts?

Okay, that makes sense. It'd have to be owner-occupied. Thanks for the replies!

Hello,

Is it possible to get traditional financing for a fully rented fourplex as my first home purchase? I am currently renting an apartment in an area about 60+ miles from this property, and the listing says it is fully rented with long-term tenants. Ideally, I'd want to live in one unit and rent out the others if it were closer, but I just ran across this scenario and thought I'd ask.

Thanks!

@Cooper B.that's a good point! I hadn't thought of that

Hi all,

Long time on-and-off lurker haha. I've been interested in the idea of real estate investing since I graduated high school. Since graduating college and having been working for a couple of years, I can make that idea a reality. I am just not sure exactly where to start. 

I was initially attracted to the idea of multi-family or multi-unit properties, but I am having trouble finding properties in my area. I live in a suburb of Birmingham, Vestavia Hills. Ideally, I'd like to purchase a property and live in one of the units while renting out the remaining units. My problem is I have not been able to find a property like this in my area. 

There are a lot of MF properties in north Birmingham, but that is not close to my work and, frankly, not the best part of town. 

Any suggestions or advice for a newbie?

Tyler

I've been looking through Loopnet and other places online for multifamily properties for sale in Birmingham, AL. I'm not ready to jump in yet, but I am just curious if those are common around here. I am reading more into living in one unit and renting out the others. Has anyone had experience with those in the area? I think this avenue could be a good way to get into real estate (depending on the tenants, financing, etc.). The more I read, the more I realize I don't know!

Hey all,

I have decided I am going to save $20,000 by December 2015 to get ready for a down payment on my first home. Is this enough for a house these days? I've read of people saving more than that depending on the house price and other factors.

After that, I plan to save the same amount in the same timeframe by 2017 to get ready to buy and hold in rental properties. I would like to start small in terms of what kinds of property I want to invest in - such as multi-family homes. Eventually after getting experience with actually investing, I want to move to larger (5-50 unit) apartment complexes.

This is just a quick rundown, but are these good/realistic goals? With a $20,000 down payment, what kinds of real estate could I reasonably afford with my goals?

Definitely. There was a portion of the meeting trying to sell a program as well. I figure I'll just stick to BP and reading for a while!

I went to my first Alabama Real Estate Investors Association meeting last night. They invited Andrew Cordle to be a guest speaker. I was introduced to a few people, but it was a pretty overwhelming experience overall. Firstly, because I was the youngest person there and did not really know anyone. I met a fellow BP member there though. I also got many weird "what are you doing here?" looks.

Andrew talked about his experiences and how he's made his business so successful. I also heard him say he bought and flipped his first property when he was 22, so that gives me some hope. I just need to keep learning and come up with a plan.

I still feel overwhelmed about the whole idea of buying and holding/flipping/renting properties. I am still just going to keep reading as much as I can about certain strategies. I am trying to narrow my niche market, as several acquaintances suggested.

I think it could be very helpful to experience a deal as it goes step-by-step to get kind of a hands-on experience, but just by watching.

I have an uncle that owns his own residential and small commercial construction company, maybe I could ask him about certain aspects of real estate.

Anyway, just an update. Thank you all for your support so far! This is quite the learning experience.

Chad Raggio, I've heard a couple of others on here recommend attending the local investment group meetings. I plan on attending tomorrow night. I'm excited!