All Forum Posts by: DJ Cummins

@Gabriel Benavidez

You got the perfect response from @James C.  It gets easier to pull the trigger as you go.  Each deal is its own deal, and if the numbers work, and everything else seems to check out, you should be ready to buy.  If you are feeling pressured, take a few months before you decided to make another purchase.  Once you buy, it is yours to you want to make sure that you are ready, and that this is the right path for you personally.  

My second property took just over a year.  i was ready much sooner than that, i just had to wait for the savings to build back up :).

good luck to you!

DJ

@Zach Covey,

Along with the cash savings on your own living expenses...to me a huge benefit is that you can buy a 1-4 unit with an fha loan using 3.5% down.  If i wanted to buy a duplex for 100k, i would have to put down 20%(20k) if i wasnt living there, compared to you only putting down 3.5%(3,500).  That is a pretty big benefit right there. 

@Joshua Fowler, i think building would be tough for a first investment, and they say location is everything.  The Brrr option might be your best bet.

Or--what about using that lot that your father was going to sign over to you, buying a fairly nice manufactured/mobile home for 20-30k, and start out with renting that?  That might be a good way to get your feet wet, without putting a ton of capital into the project, and it should still cash flow. 

Hello @Issaiah Santos,

Good for you for getting started early.  I wish i would have started about a decade earlier than i did!  As far as a market crash, you can't ever tell when or if that is going to happen.  As far as when to start, my opinion would be whenever you can afford it.  Don't stretch yourself to the max, just to "get started."  Once you feel comfortable financially, that is the time to get started.  Until then, keep reading, listening, and learning and you will be just fine! Good luck to you! 

@Kevin Korntved,

Congrats on your first purchase!  be careful...this stuff gets addicting!  

Thank you for all of the responses.  @Joel Owens and @Steve Vaughan, a lease option is the way I was planning on, if anything.  I have looked at several of this owners properties.  I originally approached him 2 years ago about a B+ 24 unit that he owns.  It is just a few miles from my house, and I really like it.  It is 6 4 unit buildings, all brick 1 bedroom units, and all below market on the rent for the area.  If I could get something going on both properties, it could definitely be a better deal.  I just need to find what it would take for a win-win situation.

@Fred Shank Yes, those are monthly numbers.  I started to break it down yearly then changed my mind.  :)

I don't know the exact purchase price yet.  He is putting something together.  Those numbers were based off of what he offered to sell it to me for originally.  He might ask for a bit more since he is doing an owner financed deal. 

@Thomas S. thanks for the honest opinion.  I feel like the margin is also to thin.  The taxes and insurance kill this deal.  I would love to make it work, but I don't think its possible.

Hello Everyone,

I have a contact that I made a couple of  years ago, and he has offered to sell me a 12 unit apartment building, with 100% owner financing.  No money down.  He has several hundred units and he is looking to start downsizing for retirement.  No money down seems like a tremendous opportunity.  Plus my figures estimate that I would be getting the property for 50-100k below market value.  We currently own a 4 plex, and 2 sfr's. so this would be a big step up for us.

My issue(s).  this is in a C to C- area.  Gross rent is $565 per unit, $6780 per month.  Taxes are very high, $13,000 per year(I believe it.  I have a 4 unit that is 4k in this town).  Flood insurance is required because this is near a levy on the Mississippi river.  Insurance is $12,500 per year currently. One unit currently needs about 10k of work to be rented out, it is mid renovation.  Property was built in 2003-ish.

Gross year rent = $6780

Taxes                   - $1083

Insurance           -  $1042

Wat/Sew/Trash  - $350

Est Mtg Pmt        - $2,100

cap ex/maint/vac- $1800

Cash Flow =        $405.00.

This is not a large amount of cash flow for a 12 unit building.  I feel like the risk factor is fairly high with this deal.  I love that we would be given instant equity with $0 down, but I just don't know if the risk is worth it.

Any Advice?

Thanks,
DJ

@Cole Hagen i would love to live out there someday myself!  I think you can make a househack work anywhere if you buy it right.  Its really all about what your goals are.  

Thanks @James Fowler!  Yes, i wish i had about 10 more of those, then i can retire. lol.  We are coming up on month #2 now, and so far so good! ha.

@Cole Hagen

Just an example of this deal we just did:

purchase 55k (20% down) and 13k in renovations

rent: $950.00 mtg: $294.04 ins: $57.00.  taxes: $135.00.  cap ex/vac/misc= 200.00(7%--brand new water heater, ac, heat)

cash flow = $263.96

Total cash invested = 11,000-3,500(seller credit)+13k reno = $20,500