All Forum Posts by: Eric Kluth

@Robert Nicolai Yes that's the plan to live in it for two years build equity than move on to buying my second small multi family property. When I move out I would like it to cash flow. That means buying it right. My thinking is that I need to start looking for a rehab property in a good neighborhood. 

@Kyle Gregg Thank you for the advice.

I also understand those rules are just gauges. But I do like the 50% rule more than the 1% rule. I plan to do a more thorough analysis, but I may find historical expenses for the past two years equates to 35%-40% not 50%. But it only takes one bad year for that number to jump, so I prefer to be conservative and say expenses will be 50%.

Yes I understand that and I will be occupying it.

I'm looking to buy my first property. The strategy is to buy and hold a small multi-family (2-4 unit) property in the Portland-Vancouver-Beaverton-Hillsboro area to occupy and rent out the other units. I will be financing the property with a FHA loan with 3.5% down. I am finding most of the listings on the MLS are priced too high. Ideally I would like to find one that is not distressed in a good neighborhood to move into. I have come across a duplex that I would like some advice on.

Asking Price: $230,000 

Unit 1 is 3 bedrooms, 2 baths, 1,245 sq ft

Unit 2 is 2 bedrooms, 1 bath, 1,074 sq ft

Property taxes $3,580

Est FHA monthly mortgage: $1,450

According to the listing unit 1 is renting for $900, and unit 2 is renting for $670. On rentometer.com the average rent in that area for a 3br is $1,283, and a 2br $906. Even checking Craigslist the average rents are $900-$1,300.

With the current rental income is does not meet the 1% nor the 50% rule. However, using the adjusted gross income that I've researched of $2,189 ...it would meet the 1% rule at $218,900. This would be my maximum asking price. But with these numbers, even if it hits the 1% rule it doesn't meet the 50% rule. $2,189/2=$1,094.5 left for the mortgage.  The property would need to be in the range of $170,000 for that to happen.

Would you pass on this property, or pursue it?

I have been looking for a while on Craigslist and on the MLS and this is the first property that could meet the 1% rule if my offer of $218,900 were accepted.

Am I wrong to expect to find a non-distressed property that would meet the 1% and 50% rule in this market? Another strategy would be to find a distress property and use a FHA 203k loan to fix it up. Any advice is appreciated.

Networking is always good and vital. I have it in me to find a buyer first, getting his/her criteria then go target and market to properties for that buyer.

I am looking to wholesale commercial properties. The niche being small multifamily properties. I found by buyers list and there mailing addresses using listsource.com. They are repeat buyers.

The letter writes like...

Dear 'buyers first name'
My name is Eric. I found you by ______. I am an investor and actively market for owners of off-market commercial properties (i.e. small multi-family properties) that are interested in selling. I specialize in finding great off-market deals. I work with buyers who are ready, willing and able to move when I present them a great deal. If you are looking for great deals and are ready to move when a great deal comes along, I am interested in working with you.

Then I put my contact info
-END-

The craigslist posting is of similar variation.

I have a list of buyers that bought properties within a year in my area. Im targeting small multifamily properties between 5-50 units. The list is roughly 80 buyers. I have done my first mailing campaign, a yellow letter in an invitational envelope. I have done a couple craigslist postings. So far i have no bites. I don't have a website yet. Any advice on getting buyers to respond? Whats the most effective strategy?

bump

My business is in Washington. I formed it in Wyoming because I will be marketing for deals in Oregon and Washington. I know I have to register in the state I am doing business. Do I have to register as a foreign LLC in Washington just because I am based there? My hypothetical question is if I only do deals in Oregon for 2013 and not in Washington, do I forgo not registering in Washington even though I am based there? And then next year I do business in both states. So I am wondering if I should register as I go along in whatever state I do a deal in?

Thanks