All Forum Posts by: David S.

Thanks all. I have been doing my research, made a spreadsheet estimating NOI, cash flow, c on c, etc. I've looked at every multi family in my area on the MLS, and know what it takes to cash flow. I feel I'm ready to buy, and just need to be sure it isn't a terrible deal, or too many hidden issues.

Thanks guys.  My gut is saying avoid the rehab house. I think I'd love doing it, but it doesn't make sense financially. 

I do have a realtor, but she is young and not very experienced. Kind of got stuck with her due to connections, so can't drop her without pissing off some people, but she is not as helpful as I would like. 

I am a new investor, but seriously dedicated to improving my financial position through real estate investing. I will be buying a property this year, and was aiming for something before June - but I have hit a bit of analysis paralysis, and generally feeling overwhelmed. I'm just not sure what path to take. I think small multi-families are the best idea for me, and I plan to self manage. I've read three RE books in the past 3 weeks, and working on another. Trying to cram as much info as I can into my head, while also spending time researching market prices on properties, rents, and people to work with.

I've got a few properties I've been considering, but just don't know what to do. 

There's a duplex in a maybe B- neighborhood. 3/1,2/1, with $2k in rent selling for $135. Thinking motivated sellers, as they dropped the price 4 times since November. But it is owned by an investment LLC, so not sure why they're selling.

Another close by is same BR and bth, $2050 rents and $115 asking. It was sold in 2013 for...I think $135, then relisted 6 months later for $150. After a walkthrough it looks ok, but has uneven floors, which makes me wary of structural issues. Had an offer fall through already, though don't know why.  Would be great cap rate though.

There's another that I love the house, but not sure on the deal. REO, $110. It's been on market a long time, and dropped from $179. Gorgeous house, large triplex. Needs work obviously - lots of cosmetics, maybe some minor water damage and work on the radiator system. Looks like walls were torn open in each bath to get to the water pipes, but don't know why. Figure I could get $2500+ in rent, but the holding costs could kill me - plus, would need to find a private money lender for financing, because I could not cover downpayment, holding costs, and rehab costs - and no conventional loan will cover a non-owner occupied prop. Could be a great house with great cash flow, but for my 1st investment seems like a huge amount of effort - including making sure the city is happy that it's livable when done.

Then just on Friday two duplexes went on the MLS 2 miles from my house - instead of 20 like the others. Cap rates are way lower. $1850 rent for $167 asking. I think those rents are low for the market, thinking maybe $1975-2050, but not seeing many rental comps available nearby. It would be really nice to have something 5 minutes away instead of 30 minutes(or more if traffic or construction). But not seeing the deal there without lower prices and higher rent. Comps for the sale price show it being pretty accurate - $154 on the low end a year ago, $171 a few months ago, and $165 in January.

Then the last - five plex 30+ minutes away. This would be a stretch, but seems like a good deal. $325, owner is offering financing with 10% down, claiming NOI of 31k and 9.6% cap rate.

I'm also seeing cap rates for the others no better than 8-8.5%, and most lower, like 5%. Maybe I'm over estimating some costs - budgeting for $6200/year for maintenance and CapEx.

Trying to wrap my head around home prices, rent prices, and just all the different deals I could attempt is frustrating me. I also have so much to learn about landlording - local laws requiring classes, etc. 

Brian

Thank you very much for your detailed reply. I will definitely check out your videos. 

I'm looking to purchase a property. Numbers look good for cash flow for rental, but I want to explore less conventional financing options. 

The property was purchased for $130k in Sept. of 2013. It was listed for $150k last February, and is down to $115k now. Assuming 20% down, the amortization schedule shows around $101k still owed.

I'm looking for resources to learn more about doing 1) seller financing, 2) a subject-to deal, or 3) another option where I have a reduced down payment.

Everything I'm reading says seller pays 10-13% during a sale, and I'm wondering if I can get them to accept one of these options to save them money, and get me the property for less out of pocket, less total cost, or preferably both.

I'm new to REI as well, but this seems unrealistic. Most people use the 50% rule to estimate expenses not counting the mortgage, and you're at 28%. You're only looking at a combined $500 a month on CapEx and maintenance. That's $6k a year, to cover 7 residences each with a fridge, oven, furnace, etc. Plus, four roofs, paint, siding, etc.

Thanks, I appreciate the tip! I am looking at the expenses for that property, trying to find a better way to plan them. I think touring duplexes will give me a better idea of what I should worry about for immediate improvements and long term expenses. 

I'm looking at multi-family properties. Once I get a few under my belt I'd love to look into apartment complexes, but that is a ways out.

Hi all, I am a new investor interested in buy and hold rental property investing. I'm looking to purchase my first real property soon. I live and work in the Twin Cities, and have a day job as an engineer.

David

I am looking at purchasing my first rental property, and made a spreadsheet- 

http://i.imgur.com/9BiQ0VY.png

Do these numbers make sense? 60 year old duplex that looks like it was flipped in 2009. Haven't gotten a chance to tour it, but the pics online show it to be in decent shape. Am I missing anything? Self managing, so no PM costs.