All Forum Posts by: Dakoda Spencer

@Waylon Gates, @Ryan Landis, @Eric Kang, @Federico Gutierrez

I called a local bank and asked what they would need to finance an investment property. The gentleman simply said that I need 25% down, my last two years of tax reports, and some proof that I make money. When I continued to ask if the process would be any different for an REO, he simply said that "as long as the appraisal is adequate, it won't be a problem." What does that mean?

Would I be able to find a couple private money lenders to assist on any of these deals? I know I don't have the money to pull this off myself, but I've known that from day one. I just want to know what I have to do to start making deals happen. I'm tired of chasing a "9 to 5" job and I no longer want to make excuses, but to come up with creative solutions. I believe every problem has a solution if I'm willing to find it. For caller #1, I'm sure I could only buy one or two of the properties and work something out on a smaller level. We haven't set any expectations as to what will be done so the door is open for opportunity.

I've come to the conclusion that if I want to make any deals happen within the next year, I'm going to have to use creative financing. 

I ran the numbers on all 5 properties together and this is what I got:

1. Monthly Income: $6,050.00
2. Monthly Expenses: $4,887.45
3. Monthly Cashflow: $1,162.55
4. Pro Forma Cap Rate: 7.28%
   
5. NOI: $29,862.00
6. Total Cash Needed: $174,000.00
   
7. Cash on Cash ROI: 8.02%
   
8. Purchase Cap Rate: 10.74%

9. Down Payment:	$31,000.00
   Loan Amount:	$247,000.00
   Loan Points:	$0.00
   Loan Fees:
   Amortized Over:	30 years
   Loan Interest Rate:	5.000%
   Monthly P&I:	$1,325.95

I over estimated for repairs and other fees and underestimated cost of rent. Deals like this do not come available in my town very often. I don't want to jump in head over heals and not do my homework, but I also don't want to sit back and watch a good deal go by because I "don't have the money".

By "more than anything to make it happen" I mean real estate investing in general. Not this deal in particular. I would love to make this deal happen but only if it's actually a deal. I just want to know what I have to do to figure out what all I need. 

Hey all,

Yesterday I called a couple FSBOs in my small town after doing a little bit of driving around. Two of them called me back so I'll break it down by what they are offering:

Caller #1: He is an older investor that is no longer in the area. His mother passed away so he no longer has a desire to come back to my small town. He is selling 3 duplexes and a modular home. Two of the duplexes are traditional 2 story side my sides. The other duplex is a modular home converted into a duplex. The other modular home (that was built in 2003) is where his mother originally lived before she passed away.

1. Duplex 1 (The stucco duplex): Asking 60K and needs a lot of work. (Close to a College)
2. Duplex 2 (The Green Bean): Asking 120K and needs a lot of work as well. (Close to a College)
3. Duplex 3 (Water Street Du): Asking 74.9K and needs minimal work. Is a modular home converted into a duplex.(Not close to a college)
4. Modular home: Asking 84K in good condition with minimal work needed. (Close to a College)

Caller #2: This man bought this house a few years ago with the intention of fixing it up. He got too busy building a house on his own land and is now wanting to sell it. He said he's done a little bit of work but not too much. It is a 4bed/2bath and said that it could be turned into a duplex if I wanted to. This house is literally right beside most of the other houses that caller #1 is offering and is close to a college. He is asking 20K which is below market value for the area.

Both sellers are willing to do seller financing and are extremely nice to talk to so I'm sure we can work something out. I haven't had a chance to walk through the properties yet, but I will shortly. I just want to see if I even have the ability to make this happen so I don't waste their time.

I haven't done any deals yet so this will be my first RE purchase. How can I make this happen. I don't have near enough cash. I only have about 5K right now since I've just started a good full-time job about 5 months ago that isn't seasonal work. 

• Will I need enough cash for the down payment and for repairs? 

I want more than anything to make this happen, so please tell me what I HAVE to do to make it a reality. I am willing to do whatever it takes!!!

Thanks all!

@Sara Abernethy, I'm 22 years old and this will be my first RE purchase. No I don't have much money and this is why I'm looking at these properties instead of ones that may be in nicer condition. I just want to get my first deal, learn from it, and move on to bigger and better deals. Thank you for your words of wisdom, I really do appreciate your reply!

@Michael AblanThank you for the response. How can I find someone to walk the property with me? Can it be any local contractor or should I hire someone that advertises this type of thing? My brother has work on building construction for several years and know how to fix things, I'm afraid he might miss some things though. I know this is the most crucial step so I don't want to leave room for error, especially for my first purchase.

@Jassem A. Thanks for the replies! How can I find contractors for my area?

@Jassem A.

I can't find our town website that has tax information or they may not have one. I don't have enough money to pay cash for it. I only have enough that I could put the 20% down. 

@Jassem A.

Thanks for the reply! I was considering offering 20K, doing some light repairs, and renting it out for about $575-$600. I don't want to count on renting it out above market, though. So all the numbers need to work as if I can only rent it for about the $487 mark. 

How did you find the Tax information on the property? I'm still new at this and filling in the gaps. Thanks!

You all are great and thanks in advance for your input!

So I live near a small town that has a small community college, a Walmart, a Sheetz, and a couple other little places in it. Our population is just over 5,300 with most of them being renters and not owners. There are a couple little houses (2bed/1.5bath) located close-ish to the college so I was wondering if they would be worth getting as a first time investor. They are selling for about 29.9k and the average rent (for 2/1) is about $487 (according to Renotmeter.com) which is about right. 

The one house I'm looking at has over 1300 square feet and doesn't look that bad (Compared to the rest of the town). I haven't gone to view the property yet, though.

Should I consider this? This small town doesn't have much to offer and I don't want to only have renters when it's college season.

Here is a link to the house I'm looking at if anyone is curious. 

Thanks everyone!

@Brian Pleshek, I would like to get into apartment buildings. Unfortunately, there aren't many in my area at all. Apartments just seem to really catch my interest more than the other methods that I have seen. If you have any specific advice on apartments, I am more than willing to take it! Thanks!

Thanks to everyone who has posted and encouraged me. I'm having a hard time finding my first deal so I really appreciate all the positive feedback!