All Forum Posts by: Dustin Beam

So I'm under contract on three fourplexes. I'm planning ahead, so hopefully everything goes fine *knock on wood*.

But this is applicable in other situations as well. "My" buildings are 3 of 5 identical fourplexes. They are all the same color and all need repainted. One of my first order of business will be to clean up the exterior and paint. My idea (maybe wrongly) is that it will both make "my" buildings more desirable, and put pressure on adjacent building owners to clean them up a bit. Win win for everyone.

Is it advisable to do this in the first place? Should I paint a different color that the current 5? Right now, I think it might be in my best interest to really make "mine" stand out and paint a different color.

Thoughts on this approach?

@Amy Ranae, keep in mind it's only how I view things. Have you done a cash on cash return analysis for whatever property you're eyeing? If so, compare that percentage to your loan percentage. When I do that, I put my money towards the highest, jmo

I always figure it's best to put money towards whatever has the highest percentages, whether it be debt or interest/returns.

@Steve Karpowich Are there any boundaries (streets, zip codes, etc) you recommend? I see a lot of great prices in KCK, but there are also some rough areas I probably don't prefer to get in to.

I think that's what we all want to know! :) 

How did you calculate your cashflow? It seems optimistic, but I won't pretend I'm an expert. Maybe I'm missing something?

Only if she expects you to pay for what it will be worth instead of what it is worth. But of course maybe she will.

Hey @Brian Langdon, in my experience, most places list properties in our area about 100x more than the monthly rent. Another way to put it is they try for the "1% rule". I haven't had much luck finding property that fits the 2% rule around here.

So with that in mind, he called and asked what those units would be worth to me based on the rent roll. I did a quick calc at 1.5%, and of course qualified that with "it depends". So I said " it depends, but I'd be around 160-170 per building ".

I ended up at $175 per building and the seller will pay closing costs. I think it's a fair price for both of us.

@William Morrison yea the pay down is much better. I actually ran my analysis considering that. In fact, I'm toying with the idea of doing some value add to properties I'm under contract with (knock on wood).  Then sell in 5 years or so and essentially trade up. When I compared the 20 vs 30 it was pretty considerable, particularly so when every dollar I put down gets me $5 in real estate....that tenants pay for. 

That's the "plan" for now anyway, obviously subject to change. 

Anyway, you're right that it's something that @Chance Cooper may want to consider.

well maybe theoretically could go down, but probably not considering current rates. Mine is a 20 year ARM, adjusted every 5 years. I'd like that fixed rate, but I decided I wanted the LLC more.

Interest rate was similar (for now anyway) for me. I got the first 5 years at 4.25%. YMMV

Also only had to put 20% down instead of 25. There are pluses and minuses for both, just have to decide how you want to do it.