All Forum Posts by: Derek Harris

Is this for an investment property? 60% down is pretty steep! Do you foresee any issues with getting conventional financing? Does the property need a lot of rehab?

What is your intent with the properties? Do you plan on keeping them for the cash flow or flipping them? Does the asking price make sense or are you trying to negotiate it down? Run the numbers and see if it meets your criteria.

Cash on Cash ROI should include the total cash that's invested into the property. Essentially, this is a measure to see how effective your invested dollars are. Try using one of the biggerpockets calculators.

The hardest part is finding the deal. Do you plan on flipping it or is it a buy and hold? Do you have enough funds? How close are you to the property? 

I would shop around and find a mortgage broker. If it's for an investment property, most medium to large institutions will require 25% down for 2-4 units. If you plan on owner occupying it, you can expect only having to bring 15% down. This is for investment properties that are going to be delivered to Fannie Mae. For local lenders, it's completely up to their guidelines.  

Is it worth pursuing? It depends. You should properly take into account all expenses to see if it still cash flows? A lot of people neglect property management (assuming they want to manage it themselves indefinitely), cap ex, maintenance, vacancy, etc. Biggerpockets has a very useful calculator. What is your minimum cash flow and does it meet that criteria? How stable is the market? 

Always underwrite the market first. Look at job growth, population size and growth, etc. After you underwrite the market, then underwrite the deal. For me, it's all about Cash on Cash return. Just curious, what market is this duplex in?

The goal is to add 200 units this year. The focus is on 4+ unit properties including apartments and mobile home parks. As much as I love Austin, TX, it's next to impossible to find great deals in this market that meet my cash flow criteria.

Do you want to be a passive or active investor? What is your risk tolerance? Are you trying to replace your W-2 income?

Me personally, I focus on buy and hold investment which create passive income. If I had a few hundred thousand in cash readily available, I'd purchase an apartment complex in a stable and growing market. Underwrite the location first. Then underwrite the deal.

Just starting out, I would stick with the free apps especially the ones that are offered through Google.  I heavily rely on Google Drive, Google Sheets, and Google Calendar especially since you can share access.  Also, I recommend finding a good real estate investment calculator (just search in the app store).