All Forum Posts by: DJ Cummins

Hey everyone. We have the chance to purchase a 12 unit property but to get this done we have to sell our first ever investment property. It is a 4 unit in East Alton, IL(25 MINITES FRIM St LIUIS, MO) We are asking $145k. Gross rent with laundry income is approximately $2,050 per month. Taxes are $3,600 per year. This is a brick U shaped building on a slab. Each unit is 1 bed/ 1 bath and approximately 500sf. New flooring paint and other cosmetic updates are in each unit. Windows and roof are approx 10 years old Fully occupied with great tenants. I think this is the right section to post this in. Please let me know if you are interested. Thanks, DJ Cummins

Hey Everyone,

I am not finding a definitive answer on this.  Lets say that I am looking into possibly selling a property and should have a profit of around $50,000.00(that's pretty exciting!).  I have the chance to purchase a property that will require around a $40,000 down payment.  My question is, can i used $40k of the 1031 for the down payment, and then use $10k to help fund the escrow account?  Or will all $50k have to be used towards the down payment?   

thanks,

DJ

Hey all, I have a chance to purchase a car wash for about $.30 on the dollar. It’s in a bad area. The McDonald’s next door has closed because it was robbed several times in the past year. Cash flow according to the past 3 years of tax returns would be an ROI of around 45-50%. Please talk me out of it. Thanks, DJ

@Isaac El, it is great that you are looking at deals and getting started, but if the property isnt going to cash flow, it doesnt really make sense.  As far as appreciation, that is tough to bet on, and we have to be at or near the top of the market anyway.  The only way this deal might make sense is if you move into half of it and it decreases your current living expenses.  Just my two cents.  Good luck to you!

DJ

@Ben Stevenson, sure thing, glad to chime in.  Reach out if i can help in the future.  And FYI, i wouldnt do a deal if it were just breaking even.  Not much point in that if you ask me :) 

@Ben Stevenson some lenders may be different(some could require 25% or more, some less).  My lender requires 20% down for a commercial 20 year loan.  That is what we have on each of our properties.  If you live there is a primary residnce for at least 12 months, its only 3.5%.  So the difference in a 300k shack would be 60k vs. 10,500.  big difference! 

@Hasnain Akram, There is a lot of good advice.  It is tempting to purchase another property as soon as you have enough in the bank account, trust me i know.  Keep some money set aside for all your maintenance and vacancies.  Set a number in your head and dont let that account go below that amount.  Missing a good deal is way better than getting a good deal and then all your cards crumble from a couple vacancies and a lack of reserves. My wife and i have been on a 1 property per year purchase plan, and it seems to be working out between personal savings and cash flow. 

Good luck!

DJ

Hello @Ben Stevenson,

It sounds like you have a good plan in place. My first property was a 4-unit, and my only regret was that i didnt house hack(live in it). I put down 20% as my wife and i already owned our own home. The property has been a great investment, so it is tough to say i regret it, but if we would have been in the position to purchase it FHA and live there, the 3.5% down payment would have allowed us to buy another property much sooner than we did. It all worked out though. Good luck to you!

@Adam Scheetz message me anytime 

Hello @Adam Scheetz,

First off, thank you for your service!  I think this is a solid plan.  Your goals are very similar to what mine are.  It has taken me 3 years, but i have achieved step 1 in your plan(6 units, over $500 CF).  It has been a slower go that i had originally hoped, but i can feel the steam picking up now.  I am also interested in a larger apartment building and a self storage facility.  Those are 2 of my goals over the next 5-7 years.  You seem to have a solid plan, now just act on it.  Good luck!

DJ