All Forum Posts by: BJ Brinkman

It's 6' x 10', which I'm told is the smallest legal size (it's listed as such, though I can't locate the code for my county) though no closet? The typical row house here will have 8'x10' or so (still small, but standard and expected) and has a closet.

Definitely leaning towards 2br with office...

Hi folks,

I've been looking at a 3br/1ba townhouse nearby, and have a concern about that 3rd bedroom. It's just big enough to be legally a bedroom, so TINY.

My question is to those with these 'barely legal' bedrooms, if potential tenants ever take issue with it and you have trouble filling vacancies listing it as a 3br. In my area there does seem to be a strong discrepancy in 2br vs 3br rent prices (about $200 a month). It's also somewhat unusual in that most row houses around have slightly bigger, more usable third bedrooms.

Do you think this will be an issue?

Thanks!

Hello again folks of BP!
I'm a brand new investor, trying to do all the research I possibly can before buying my first investment property.

I'd like some feedback as to how my plan is looking, and if I'm on the right track. What I'd like to do is amass several rental properties while maintaining my full time job (this will of course necessitate a property manager, which I am budgeting for).

I have found an area where I can purchase a turnkey rental in short sale for around $85,000, and expect rents of 1100-1200. The math looks good to me, and I plan on putting 20% down and financing the rest in a conventional loan. Budgeting 50% for expenses ($115 management, $103 taxes, $32 insurance, $115 vacancies, and $210 maintenance) I will cash flow $206/month.

I'm hoping that this is a repeatable formula. With my current job and living situation, I am able to save about $1500/month. The cash flow should bump this up to $1700, where I will save for the next down payment, rinse and repeat. All the while of course keeping adequate reserves for home issues and personal (car, medical, job, whatever may come along) expenses.

I feel that after 2 or 3 of these deals though, I will be extremely leveraged. Does this sound too risky? I will have 20% of my own cash in equity of 3 different houses. Does this seem to exceed any critical mass of investment vs. returns? Will it at house #4 or #5? What I'm asking is, how far can I take this before I have to get creative and avoid exposing myself to too much risk?

Thank you very much folks!

Hi Folks,

Thanks in advance for your time and input. I'm looking for some 'big picture' help and could use any and all advice. I'm in my mid 20's, have about 30k cash saved up for an investment, and am looking to purchase a buy and hold rental house right out of the gate (with cash flow and decent appreciation if possible). My long term goal is to have 8-10 of these houses, with cash flow being the #1 goal.

The area I am looking into is offering 3br row houses in the 80-90k price range. The median household price is around 130, so I am looking at the lower tier houses. I'm not interested in doing any rehab and want the property just about ready to go. I can afford a 20% down payment and have about $12k in cash reserves (for myself, the house, etc).

I'm trying to nail down some exact rent numbers, but I am expecting a cash flow of around 200-220 a month (budgeting for 50% of rent roll for expenses, and hiring a property manager). The area I am looking in is low income working class (median household income is mid-40's, unemployment rate is around 7.5%). I'm being continuously cautioned by friends and family that I will be dealing with the 'riff-raff' of my state, have high turnover, and tons of headaches.

I'd like to ask those who have had (and even self-managed - this is a possibility) properties in low income areas, with higher crime rates than where you'd feel comfortable living, how their experiences have been. I'd like to go into this eyes wide open and plan for the worst. I plan on pricing the property slightly below market rate to have my pick of applicants, and screen thoroughly.

Thank you all so very much!

Thank you Matt, Marco, and Bryan!

I'll have a more accurate interest rate soon, but this news is encouraging. The area is low income but working class, average neighborhood. I plan on visiting it this week to ensure the immediate area checks out. Property was found on an MLS listing website.

What I'm interested in at the moment is a turnkey rental, very minimal rehab money needed. I can't imagine it'd hurt to keep an eye out on foreclosures and short sales, though. 86 is the asking price, and I will plan on offering lower!

Thanks again.

Hi BP members,

I'm so, so glad I found this forum. I'm hoping you might be able to analyze this deal for me, and offer some advice to a newbie. This will be my first investment house and I am currently renting. It appears to be in good, turn-key condition. I'd like to thank a moderator, Jon, for giving me some personalized advice earlier.

Price: 85,900 3br/2ba
Rent: 1250
Rehab: 0
Down Pmt: 20%
Rate: 5.625% (This is an estimate - does it seem appropriate for a NOO loan? Good credit (770) and no debt)
Term: 30 years
Down pmt amount: 17,180
Loan amount: 68,720
Principle, Interest pmt: $396/mo
Expense amount: 50%
Expense amount: $625/mo
Net Operating Income: $625/mo
Cashflow: $229/mo
Annual cashflow: $2,748
Cash on cash: 15.9%
CAP: 8.73%

I'm also wondering if there is a way to do this without leveraging 20% of my own savings without occupying the house. Is this a good use of $17,000 in cash? Lastly, do you think I should look into foreclosures, short sales, etc? Or for the first time just go for the MLS listing, with a realtor, and keep it simple.

Any and all advice is greatly appreciated!

Thank you!