All Forum Posts by: Derek Woods

From the pictures it appears to be a nice property.  You could consider tiling that side of the cabinet and using the same tile as a backsplash.  Might be able to make it look nice if you could find a tile cheap enough to consider.

Hello BP!

I am about to close on my second MFR. I have some questions as I am pulling a LOC on the properties etc.

I have already located a local bank willing to take a second on my current properties. Hopefully will be moving ahead with that shortly.  

My question is how do you get past the credit inquiries and new loans killing your score.  I realize only %10 of your actual score is affected with inquiries, but as I move ahead in this game their starting to pile up. Along with new loans.

Is their anything that I can do to help this, as currently I have close to a 700 score from all three CRA's and is like it to continue to go up not down.

Thanks in advance.

@James Wilcox I would be very interested in what you have to say about the Berea area. As I have a sister their that's now a sophomore.  I would love to be able to put her in a duplex and give her a little bit of experience.

It would absolutely be possible.  Lexington is a quickly growing place with quite a bit of money.  I am hoping to start investing into apartments in lexington soon. For your price range to find a decent property your going to have to look through the foreclosures and do some repairs and maintenace. It is possible just a little tougher.  I've also been looking at the market around lexington, specifically Berea.  As the scho their is very nice and somewhat prestigius. Their are foreclosures in your price range their aswell

This is my goal next week.  I'm hoping to get it completed ASAP so my next property can go straight to it.  I am also doing it because I'm going to open a business line of credit based off the equity I currently have in properties.

Very interested in this subject as well.  Considering purchasing one next spring and would love to know more about what to look for.

It may have been a month or so.  As it was my underwriter that helped me with the task.

Here's what I'm coming up with:

Cap rate-16.1%

 850x2x12=20400 total annual rents

I would say a high guess would be 10% vacancy.

20400x.90=18360 rents minus vacancy

18360/114000= 16.1% Cap rate

GRM-5.5

ROE-26%

COC-23%

DSCR-2.26 but I think this only makes a difference in larger commercial deals.

I was in the same scenario last yr. first thing I did was started working on my credit and contacting lenders. I found a local lender that was easy to work with and they allowed me a minimum of 620 credit score to get their in house ARM. At that point I had the credit issue straightened out.

Next, Cash. For their product I needed 10% down plus closing etc.  I owned my Harley outright, so I secured the loan against it. Deposited the cash into their bank.

Now for the property.  I looked for a property that I could cover the down payment and closing with my secured cash.  

Hindsight, I would have asked the seller to pay closing and raised the purchase price some.

This put me in a cash flowing property with low credit and capital.  This is an option most people can/could pull off if they tried.  

I have personally noticed a significant increase in my income with 2 purchases. I also plan to become an investor full time ASAP.

Triplex 86k

Rent-1850

Mortgage escrowed- 600

Maintainace-300

Municipal fees-75

Cash flow- 875/3=$308 per door

Duplex 70k

Rent-1300

Mortgage escrowed-500

Maintenace-200

Municipal fees-50

Cash flow- 550/2=$275 per door

Tax benefits are also a perk your forgoing.  

The two properties I purchased were t distressed/mismanaged or anything and listed on MLS. So their are better deals then that out their.