All Forum Posts by: Ed Matson

@Rahim Kakar - I agree with Ellis San Jose that doing the math is essential. We own/rent both C and B condo townhomes and are happy with their income production. It is also true that in general it is difficult to get condos to cash flow, but in our area they do better than SFH's. It is also true that condos don't hold value well in a downturn. But in certain markets, we can still purchase units at 65% of their peak price, and that's with 20% appreciation in the past 18 months. You have to do extra due diligence on the association and its reserves, but in our case, we like the efficiencies of scale the HOA provides. Most of the condos in our area don't work financially, but there are certain complexes in a few towns that do, and that's where we purchase. The ongoing actual repair costs of these 1980 vintage buildings has been much lower than a 100 year old triplex, whose pro forma was better. And finally to your question - we settle for a slightly lower return on our B units because we get a better quality tenant. You still get to screen Section 8 applicants, so I would not necessarily exclude them. Most Section 8 applicants know they have something of substantial value and don't want to mess up a good thing.

@Trey Knight - Years ago when I decided to go to grad school and was working a full time job, I found I had little time for anything else.  I was married with no children, and for four years (except summers) it was basically work and school. I did sacrifice regular exercise, any weekends away, and my wife adapted and supported.  I'm not  a believer that one can "have it all" and achieve meaningful goals.  I would imagine the same would hold true for your situation.

If you are calculating your net worth, you use your % interest in the value of the asset less the same % of any mortgage loan.

In general 2 BR units have lower vacancy rates than 1 BR units.

He does in CT if the tenants have leases in place that have not expired.  

@Marvin Montanes - It was a few years ago, but prices have increased dramatically as CAP rates have come down. PDX has become quite the hot market. We have owned a MF in Beaverton for 15 years and rents have increased very substantially in the past several years. The City of Portland has instituted relatively tough rent control laws and the state legislature is considering similar measures for the entire state. We love our property and plan to hold it indefinitely. But I wouldn't be a buyer in Portland. These measures may exclude small properties so you may want to explore further.

I have been a satisfied Fundrise investor since 2015.  They are sometimes criticised for their lack of transparency, but overall I have confidence in them based on my experience. I have done other crowdfunding investments with varying results.

You should be able to refi to purchase another property without having it under contract.  The bank should understand that you need cash in hand to be successful in purchasing the next property and that their policy puts you in a competitive disadvantage. They are asking you to go under contract on the next property without even having any assurance that they will do a cash out refi.  That’s unreasonable.  Keep looking for another bank.  Loans are products and whether or not you get one should depend on the duplex and not the next property. The general reason “to purchase another investment property” should be enough. Has been for me.

I use LVP in my rentals for kitchen/dining/living room and carpet fro upstairs bedrooms. LVP would be a great choice in VT (we have a condo in Wilmington, so I get VT winters and mud season).

I think your plan makes sense.  If the MF is 4 units or less, I see no problem.  If it will be 5 or more units and under a commercial loan, the lender may not permit the reduction in income that your use of one unit would entail.  This happened to my brother some years ago. Something to be aware of, and would probably vary from lender to lender.