All Forum Posts by: Josh Dillingham

@Account Closed we need to see your expenses also.   6% cash on cash return isn't enough for me to invest in a property.  there are easier ways to make a 6% return.

zillow.com has the answers you are looking for.

@Mstee Hill No, When bank financing is used the bank is the bank.  When seller financing is used the seller is the bank.

@Jeremy England the 3 points seems high, I would shop the deal to another bank.  4 months ago I got a single family rental financed with no points at 4.5% on a loan amount of $52,000.  keep in mind that those prepaids (home owners ins. and property tax) aren't really "cost of the loan" expenses, yes you will be paying it up front but it isn't costing you any extra because you already factored those costs into your monthly expenses.

I am in the process of closing on a commercial mortgage at 5.25% 5 years fixed, amortized over 20 years with no points. This is with a local bank.  So there are definitely commercial options out there well under 8% as you mentioned. I think you will have a difficult time finding a commercial mortgage with anything more than a 5-10 year term and 20-25 year amortization.

I agree with @Thomas S. that it will take 10 doors at $250 per door per month. is that going to happen in 12 months? if you have 25% down for a 10 unit apartment building then it is definitely possible. If you are going to be partnering with other people and using their money it would require many more units as you would be splitting the profits. If you are going to be using the BRRR method and repeat the cycle a couple times to get to 10 units that isn't going to happen in 12 months. But just because you can't do it in 12 months doesn't mean you should "Steer away" building a rental portfolio is a great way to build long term sustainable income and wealth.

question: What can I do to add value for you?

if you show an interest and ability to help them with their goals, they will help you (with far greater impact) reach yours.

@Fernando Landeros if your goal is cashflow why not take that $100K and buy a multifamily with as many units as you can get.  Without knowing anything about your market, lets just say you could put 25% down on a $400K property with 10 units, with each unit cashflowing $250 per door per month, that's $30,000 of cashflow per year, halfway to your goal of $60K per year.

@Drew Kelly it sounds like you already weighed the pros/cons and know what you want to do. Now you just need to come up with some plans and get them approved by the city to make sure you are allowed to do it.

@Mstee Hill if you find the property on the MLS the Seller already has an agent that they signed a contract with to sell the house, so the correspondence would go through your agent and their agent similarly to if you were getting bank financing but in your case the seller would be the bank. as far as who is responsible for repairs that is between the buyer and the seller. If you have an inspection done and it uncovers a repair that you hadn't factored into your purchase price you could ask the seller to fix it or lower your offer price and the seller would have the opportunity to agree with it or cancel the contract.