All Forum Posts by: DJ Cummins

Well, when life hands you lemons, you mix those with some vodka and have a cocktail.  I think that is the old saying, right?  

So my wife and I bought a SFR a few weeks ago, and have been getting it ready to rent. We bought this FSBO from a friend of my cousin, and it was an odd deal, that we almost lost because the sellers had to bring 5k in cash to closing. The sellers had used this place as a rental for 7 years, and decided they were tired of dealing with it. It needed some love, but we got a pretty solid deal in a great area on this one. Due to almost losing the deal on closing day, we didn't get a chance to do a final walk thru, but we just went with it. That was a mistake. There was a ton of junk left behind, and we are going to probably fill an entire dumpster just with junk from the basement and shed. This was very annoying.

But, you have to do what you can to make the best of things, and to try and make a buck whenever possible.  My brother had a yard sale over the weekend, so for the past week, I have been hauling anything salvageable from the house and shed outside, and took it all to my brothers house.  We ended up selling a bunch of "junk"(that wasn't even ours) for $123, which will cover most of the dumpster rental that we will have to use at our new property.  All in all, we had some good family time on the first HOT day of the year in the STL area, and we made a few bucks.  I also helped my precious 6 year old niece run her lemonade stand all day which was fun(and she made $98.00!).

This business is about perseverance, improvising, and some times adding a little sweat equity.   All of that paid off this weekend.  Remember my friends-if life hands you lemons, just break out the vodka, ice, and your blender and make the best of it!

Have a great week!

DJ Cummins 

So I have been reading about ROBS, and it seems like something my wife and I might pursue in the next year or two.  I know that it has to be a C corp, and is not for real estate investing.  Other than that, does anyone have any experience doing/using this method?  I feel like it could be one additional income stream with endless possibilities.

Thanks all!

DJ

 Thanks Jay.  I always enjoy reading your posts.  We still enjoy plenty of things in life,  we are just not doing it with the flashy toys that our friends have. Lol

 Thanks @david!  Yes, the rehab from the apartment should all be a good tax deduction, so hopefully uncle sam gives us a few bucks back next year!

 Hi Nichole,

We aren't really dead set on any  type of property,  we are kust planning to pull thr trigger when something catches our eye.

In the four or five towns that we are focused on, i would say that less than 5% of the options are small multi family.  We live the income our 4 unit produces, but the are much harder to find(at a good price).  That also means that its tougher to find good comps, so it is not as easy to pull out equity.   In our 2 sfrs we have been able to cosmetically add 10-15k in equity in each property.  Im leaning towards another sfr, but im ready for anything!

For the money that my wife and I have spent in the past two months, I could have bought a brand new truck, or bought a the camper that we have wanted for a long time.  Or an awesome hot tub, which would make my back problems feel so much better.  Some of our family and friends are taking week long "fancy" vacations, and we having money flying out of our pockets in multiple directions without leaving our home.  My wife and I are focusing on our future, and looking forward to the delayed gratification in a few years.  I just wanted to let all of the new investors know that this business really is worth it, and that one day the rewards will be greater than you can imagine.  

In the past two months: we spent $9,200 rehabbing an apartment after a tenant left us with a disaster of a unit, bought another property for $55,000(9k down payment), are currently rehabbing that property which is going to run us around $8,500, and last night we had a refrigerator pass away that we have to replace tonight(probably around $400-500 thanks to the Memorial Day sales).  So we have spent over $26,000.00 in the past two months.  I would have laughed at you two years ago if you would have asked me if we could pull something like that off.  We are not rich by any stretch of the imagination.  Out of all my friends in my age group(34) I would estimate that we are slightly above average here in the Midwest.  We have been frugal, and have not spent a dime of our rental income in the past two years.  That money, along with paying ourselves first from our W2 paychecks has really helped us grow, and we are finally starting to see the snowball gain some size.

We have been investing for right at two years now, have 3 properties(6 units--a four-plex and 2 SFR). Our currently yearly gross cash flow totals are(once this current property is finished with the renovation and rented out): $43,000.00-ish depending on some laundry income. I wish this was the net amount, but we are getting there! Stay focused, stay positive, and work hard. If you can do all three of these things, you will be right along side of us, heading towards our financial freedom!

Keep your heads up, and stay thirsty my friends!

Happy Memorial Day to everyone,

DJ and Erin Cummins

thanks @brian.  Kind of...lol.  Our plan is to keep using our personal savings plus cash flow to acquire a few more properties, then take all of the equity at once and buy an apartment building.  Hopefully in the 15-30 unit range.  That is a few years away, but we are definitely making progress!  

DJ

Hey everyone!  Last night my wife and I closed on our 6th unit.  We purchased a single family home in Bethalto, Illinois(about 20 minutes from downtown St. Louis, Missouri).  This is a 900 sf, 2 bed/1 bath home, and we are really excited about it.  The house was 3 bedrooms, but one small bedroom was turned into a laundry room.  I feel like we are really getting the hang of this whole real estate gig.  We closed at 4:00 yesterday.  We met both of our contractors at the property at 5:00, already have the bids as of this morning, and contractor 1 is starting on Monday morning!  We should be ready to rent in approximately 3 weeks.

The numbers: 

Purchase price = $55,000.00

Down Payment = $8,260.00(after $3,500 in seller concessions, plus funding the escrow account)

Debt Service: $44,000.00.

Repairs: $9,700.00(Let's be honest, this will probably end up a bit higher by the end of the remodel)

ARV: $75,000-80,000

The repairs being completed: New furnace, new A/C, new electric Water heater, flooring, paint, closing in a doorway that leads to the laundry room, a few GFI outlets, backspalsh, new countertop, and a new sink.  The bathroom was already updated about 3 years ago.

Rent: $875(might try for $900 first, but going a bit more conservative with $875)

PITIA: $466(on a 20 year mortgage)

Cap Ex: $65

Repairs: $65

Vacancy: $65

Cash Flow: $214.00 per month

Equity: Roughly $20,000.00

It feels really good to get three of the biggest cap ex items installed brand new before we ever screen a tenant.  We are excited to get this one rented, save a few bucks over the next few months, and do this again by the end of the summer.  What an addiction! 

As always, thank you to BP and all of the members.  Without your success stories, advice, webinars, podcasts, FB posts, and support, our business(and our motivated drive) would not be where it is today.

Best of luck in making this a happy and profitable year!

DJ (and Erin) Cummins

Hi @Alicia Brown,

are you trying to wholesale this?  how bad is the leak and crack?  Have you had it inspected?

DJ

hello @Grovo Carmona,

Good luck, and congrats on getting started!  I don't think that there is a right or wrong way to answer your question.  It is what you feel comfortable with.  My first property was a 4 unit, and i am very happy with how that worked out.  In my market, i could buy 4 4-unit buildings with 80k worth of downpayments---i dont really think that is the best move just starting out.  

Go with what you are comfortable with, even if it is just testing the water on a SFH. Are you doing a HELOC? where you could take on some money now for a property and see how it goes, and then you have more money waiting to buy something else? That is probably what i would suggest. Taking out 80k at once on your house without knowing if you are going to like being a landlord seems risky to me.

Good luck!

DJ