All Forum Posts by: David Huynh

Hello BP,

My close friend has agreed to sell his house to me at a GREAT deal. He's looking to sell me his home for 170k (valued roughly 200k-210k) with a fantastic cash flow opportunity. He purchased it for 130k and would love to profit 40k and just exit - the basement needs some work and he's looking to upgrade w/ his significant other. 

Would you offer 190k and have your friend kick you back the difference of 20k? This way I'd essentially have no money down and extra cash on hand to fix up the basement (plumbing issue, 8k-10k, 4 bidders so far). Or would you just put in the agreed price of 170k. 

This is my 3rd property and on paper I feel like 170k would show a higher cash flow. But I don't know what others would do. 

Thanks!

Fantastic work! Nice job on getting such a great return with minimal risk. 

Hello BP,

FYI - Newbie status

I am analyzing a 4 unit apartment - would this qualify as a 2, 3, 4 unit home? I know some of folks have discussed the benefits of buying 2/3/4 unit homes and getting FHA financing. Would this be possible?

Thanks. 

David H. 

Hello BP,

I need help analyzing my financial situation and recommendations on obtaining a loan. 

Here's my background - *infant investor*

I own two condo units that are successfully rented out. My goal is to build a portfolio of real estate investments where I can buy and hold. I do not have the intention to sell the condo units listed below.

Condo 1 - 26k mortgage

Condo 2 - no mortgage

Total rent = $1850

Cashflow = $1000 (after HOA, insurance, property taxes)

I am looking at a new piece of property I've located - a commercial and residential building in a prime historic downtown location. The ground level is currently occupied and the above level units are unoccupied (I will be living in one unit) and the other unit is vacant and will remain vacant (left in demo stages). I would LOVE to purchase the building and live in the current unit and put sweat equity into the vacant unit to rent ($1100/month) and raise rent on the lower unit if I am able to purchased $2000/month (current) to $2500/month. 

Please help me analyze the situation - ask me questions that I should be asking/thinking of.

Property:

4200 sq. feet (2100 ground level, 2100 above)

• 2100 ground level - commercial
• 2100 above level - 2 residential units

Price:

Sold - 447k in 2009

"Online estimate" -540k-560k

Ground level has been remodeled

Above level needs remodeling

My ball park estimate - 525k

Current property income:

Ground level - $2000/month

Above level unit 1 - $800/month (me renting)

Above level unit 2 - $0/month (vacant)

Total: $2800/month

Possible income:

Ground level -$2500/month

Above level unit 1 - $600/month (I plan on living in here and having significant other pay)

Above level unit 2 - $1100/month

Total: $4200/month

*If I were to purchase property - I would live in one unit and raise rent on the commercial side and rent the above level unit 2 for roughly $1100/month

Expenses:

Property taxes - 12k/annual

Insurance - $500-600/annual unknown?

Maintenance - unknown?

Some questions that I have -

1) Is there a bank or company whose willing to finance these types of deals? Is this called hard money lending?

2) How much generally do I need down for a commercial/residential? 15% 20% 25%?

3) Does my income affect the qualifying process? Does the current rent affect the qualifying process?

4) Does my infant stages of being a real estate investor have an affect? (Currently own two property)

18-24 month Financial forecast:

50k base + bonuses

Income from rent - $1850 - $850 (HOA, insurance, property taxes) = $1000 cash flow.

35% debt-to-income

25k-50k down payment

Again, I am new so be critical and help me ask the right questions!

The asking price is roughly 500k.

I'm getting a personal deal on the waterfront condo for $800-900/monthly rent because I'm a family friend. 

The waterfront condo will rent for $1400 and the rear should do $1100 minimum. $2500 up top and roughly $2000-2500 on the bottom. Sorry for the confusion.

Hello Bigger Pockets community.

Background:

I'm in my infant stages of being a landlord - 2 properties, 3 tenants. It seems like I might have hit a jackpot find and need assistance looking through the numbers. I was out looking for property to rent and found an amazing condo above a business office. Their asking $800-900 for a waterfront view, 1 bed, 2 bath, 1000 sq. feet. Upon discussion, they let me know their looking to sell the entire unit. 2000 sq. feet of business space (currently occupied), 1000 sq. feet condo above the business water facing and another 1000 sq. feet condo above business alley facing

Property:

500k

Rent to own option 10-15% down, 

4000 sq. feet total, 3 units (2000 sq., 1000 sq. feet, 1000 sq. feet)

Lower level rent - $2000-2500

Above level rent - $2200-2500

Property taxes - $12,000-13,000

Insurance - unknown

HISTORIC building, so I do not know what additional costs would be associated.

Income: $4,200-5000 (which doesn't seem bad for a $500,000 price)

Would you do it? I don't know if there is enough information here or not. But looking at the numbers alone, it is a downtown location that seems prime. What would you do? What would you ask? 

Congrats on starting young! I purchased my first condo when I was 20 years old with 5% down on a 50k loan. Both of my tax filing years were under 30k - not to steer you towards the bank but have you spoke to someone at the bank? Perhaps to get a feeler if you would or would not get approved?

I'm interested in seeing how people will respond to this post. I'm in a similar position as you now. I've acquired property but cannot verify additional income through the banks. So other/new methods are the way to go. 

I own it free and clear. No equity associated. I'm sure if I made some adjustments and paid by debt down, I could get a cash out refi. Currently at 40-45 % debt to income. I honestly don't know what I'd do with the cash.... continue to look for additional property, pay off student loans, bills, etc? 

And I could probably spend an additional 5-7k to get it up to date. 

Hello All,

Looking for some advice here on buying to hold vs flipping. 

Is there a general rule of thumb if your property appreciates - where you just sell it instead of renting it out?

I bought a condo for roughly 50k in 6/10 condition. Currently profiting approximately $600-650/month after all is said and done w/ property taxes, HOA, insurance, etc.

There are 3 recently sold units within the building at 95k, 99k, and 99k. What would you do?