All Forum Posts by: Daniel Okon

@Bruce Runn I looked into doing conventional at 5% for a 4-plex and my mortgage company stated that I would need to put a minimum of 15% down if it is 2 or more units. Let me know your thoughts on that, because I am in the process of looking at FHA 4-plexes and I think the conventional at 5% would be much more attractive than being stuck with the insurance payment.

Let me know, thanks.

Daniel

I am in the same boat as you Kang. I'm guessing you're looking at them for FHA purposes. There are properties out there, some of which are good and some bad. I have looked at my fair share of 4-plexes and I would say that the pricing for most of these is not very reasonable. The good thing is you have better margins with a 4-plex on 3.5% down than many duplexes due to the ability to have more units rented out. Obviously many use the MLS and listing services, I also use Redfin and look at it every day through my filters to make sure that I am seeing properties that come on the market right away.

Another strategy that many on here use very successfully is the strategy of looking for properties that are not on the market and are either about to be listed or motivated sellers. I have found that it gets a bit more difficult to find motivated sellers in some multifamily because many of them cash flow just fine, but you can definitely find good deals out there. If you're looking for just a 4-plex you could truly be looking all over the cities because there isn't a whole lot. If you're looking for a 4 to 2 unit multifamily I would narrow it down a bit and also look for deals off the market. Just some advice, hopefully it helps. Good luck on your endeavors!

 Thank you Dustin! I used rentometer.com and it seemed like this was something that was comparable in the area, actually it was on the lower end of the rent spectrum for 2br/1ba units, but thanks for the advice. I would say it's a c+/b- area but you're right about turnover. I agree its a great property and I believe I will likely  go forward with it!

Here is my deal I am looking at. It is a bank owned property that is open to owner-occupied offers for the first 1-8 calendar days. First off, any advice is definitely welcome to try to get this property. It was listed at 275k (all the details I will add to this as well) but there is quite a bit of action already and it's only been on the market since yesterday. It is likely going to have at least 15-20 offers and it has been updated quite a bit throughout. I do not have photos but I do have numbers, but it is as turnkey as you will get in a property along with coin operated laundry. It is a C-class neighborhood but could also be forced into possible B-class as the neighborhood is improving with some renovations at the nearby shopping district (walking distance). It has rentals nearby but the surrounding area is predominantly residential. Ok. Here are the numbers.

Four separate meters, electrical is good.

Asking price: 275k

Square feet: 4,500

1 unit that is 2 br/1 bathroom (1,100 square feet)

(one unit has an additional sun room (15x13) and then has an upgraded kitchen area as well as an upgraded bathroom.

3 units are 2 br/1 ba (950 sq. feet)

Assigned 1 car garage for each unit. 

Rent comps for each of these will likely be 950.00 or more (conservative number).

Here are the numbers if offered at 275k. How high would you go as an FHA property that cash flows like this?

Interest rate (as of yesterday) 3.25%

P&I: 1,197.00

Taxes: 384.75

Insurance: 200.00

Lawn care and snow removal: 150.00

Repairs: 150.00

Sewage: 100.00

Water: 100.00

Garbage: 50.00

Mortgage insurance: 184.31

Total Housing Expense: 2516.06

Rental income (1st year living at property) 950.00 x 3 plus 75.00 (coin operated laundry) = 2,925 = cashflow of 408.94 (keep in mind this is my first rental property)

Income after moving out after 1st year: 950.00 x 3 plus 1,050.00 plus 100.00 (coin operated laundry)= 4,000.00 and cashflow = 1,483.94

Similar comps are from 310k-330k in similar areas that have sold in the last 6-10 months. 

Thank you!!!!

Happy Holidays Bigger Pockets! We are looking to do another Meetup on January 26th at 6:30 PM. The title says bi-monthly meetup but unfortunately due to the holidays we didn't put together a meetup for the month of December. There shouldn't be conflicting real estate investment meetings on this day, so that's what we will be planning on. Look for a venue destination posted on the meetup website and updated on this thread by the first week of January. If you haven't joined the meetup group, please do so!

You can RSVP by clicking this link: 

http://www.meetup.com/BiggerPockets-Bi-Monthly-Mee...

Daniel

Wow! What a great first meeting! People from throughout the Minneapolis/St. Paul area came. I believe we had 21 people come to the meetup. This was a great showing and a perfect amount of people to network and connect with each other. For those who will be around, plan on doing this in December for those able to go. We will have the venue set up so it is reasonable for everyone. 

Quick recap: Everyone got to share their wants/needs as well as what they are looking at for their niche or what they are interested in doing in future REI.

@Bruce Runn shared with us some valuable information concerning a duplex he is working on right now just down the road from the French Meadow Bakery and Cafe in Uptown Minneapolis. He gave us real numbers that make sense, and answered some great questions concerning how he was doing the project as well as how he screens tenants and why he targets a higher-end rental community. In showing solid numbers, he explained how one could make a great profit in an area where many think deals aren't available anymore--without having to have a high amount of units either.

We all got to network and I would say that this launched a great start to the Bi-Monthly meetup. We will look at consistently doing this every-other month. Next meetup will be in December. 

Thanks everyone for coming!

We hit capacity people! We have 23 RSVP's. Only room for 24 and we are closing the ability to RSVP. The venue we are using cannot fit more than 24 people in their back room. Next time we will keep that in mind and choose a bigger venue but I think it was expected to have closer to about 15. It's a great thing but hopefully everyone who planned to come RSVP'd. Looking forward to connecting with everyone tomorrow evening. 

I believe as a GC you are able to sub-contract that out and it is included in your licensing. Some contractors have a specific license for roofing, others have a license for General Contracting. That's how it is here in MN but it may be a bit different in Illinois. Probably best to know if he is licensed (as a GC), bonded, and insured. 

Here's a post that is similar to yours: https://www.biggerpockets.com/forums/67/topics/767...

Most of the time a GC is able to do the roofing part in most states. 

@Bruce Runn it will be great to meet you! This networking meeting will be structured a bit more loosely, although we will have time for everyone to share their wants/needs so people can be efficient in connecting with each other. Working on having a realtor share the state of the market right now in the Minneapolis/Saint Paul area, which will be helpful for everyone, especially anyone just getting into REI. I am fairly new to all this but it made sense to put all this together. I enjoy smaller networking meetings, versus ones that are attended by 100+ people. I think it is easier to connect with people this way. Looking forward to meeting you.

Daniel

I should have noted: this is for the Twin Cities, Minneapolis, Saint Paul, Minnesota networking in general. I know many have key words that pop up, looking forward to connecting with you all!