All Forum Posts by: Grant Edwards

@Audrey Ezeh @John Leavelle Thank you both so much. I think your advice was excellent and I have decided not to move forward with the deal. It was very tempting because of the potential ROI and the fact that I had put a lot of effort into trying to make this deal happen, but having said that I think the overall risk is just too much for me. Thanks again!

@Samantha Klein @Joe Cantanzriti @Maxwell Lee @Shawn Holsapple Thank you all so much for the advice. As tempting as it is, I think I'll take the advice you all have given me and hold off. Seems like a home run in the short term but long-term it just seems like it would be too much trouble. I don't want to take a large risk on my first investment.

Hey everyone! I would like to get some opinions on whether or not I should do this deal. It would be my first investment. Here are the details:

It is a triplex for $32,000 in a low-income area in the Midwest. Property was built in 1900. All units are currently occupied with tenants that have all been there at least 2 years. Rents are $465, $465, and $450 for a total of $1380 (over a 4% deal).

Owner pays utilities. He sent me an expense sheet with all the utility bills from 2016, which along with taxes and insurance add up to be $590 on average per month. I calculate that with $250 per month allocated towards repairs and CapEx, $100 per month for vacancy, the $590 per month in utilities insurance and taxes, and about $160 for a mortgage payment ($25,600 at 6%), I would still cash flow almost $300 per month. I would plan on slightly raising rents to make sure I'm cash-flowing at least $100 per door.

My concerns are the possibility of having CapEx hit me early on since it's an older property, and also the quality of tenants I'll have since it's in a low-income neighborhood.

Should I do this deal? Why or why not? And is there anything in particular I should watch out for?

Thanks in advance to anyone who decides to give me their advice!

Hey everyone! I would like to get some opinions on whether or not I should do this deal. It would be my first investment. Here are the details:

It is a triplex for $32,000 in a low-income area in the Midwest. Property was built in 1900. All units are currently occupied with tenants that have all been there at least 2 years. Rents are $465, $465, and $450 for a total of $1380 (over a 4% deal). 

Owner pays utilities. He sent me an expense sheet with all the utility bills from 2016, which along with taxes and insurance add up to be $590 on average per month. I calculate that with $250 per month allocated towards repairs and CapEx, $100 per month for vacancy, the $590 per month in utilities insurance and taxes, and about $160 for a mortgage payment ($25,600 at 6%), I would still cash flow almost $300 per month. I would plan on slightly raising rents to make sure I'm cash-flowing at least $100 per door.

My concerns are the possibility of having CapEx hit me early on since it's an older property, and also the quality of tenants I'll have since it's in a low-income neighborhood.

Should I do this deal? Why or why not? And is there anything in particular I should watch out for?

Thanks in advance to anyone who decides to give me their advice!

@Brandon Turner

Brandon I've actually read your book twice! I love it. And I've listened to a ton of the podcasts. I've spent A TON of time educating myself, but have yet to take action. I am ready to get in the game and have stumbled across this roadblock, and now I'm highly considering a partnership or continuing to look for seller financing deals. I have considered house hacking, but I currently live rent-free so that doesn't seem to make a lot of sense. Any advice on what you think would be the best way to go?

@Michael Wagner

I think you could definitely be right. At this point I'm just so ready to get in the game, I'm going to figure out a way. Typical homes in the town I'm looking in are $40k-$80k. I have about $10k saved up so as a ballpark estimate I'd say the loan will be around $30k-50k.

@Shaun Weekes

I was in school. At the time I was working the front desk at Lifetime Fitness as a part-time job to earn a little bit of money (which I did throughout college). Now I'm graduated and I work full-time as a personal trainer at Lifetime Fitness (the same company).

@Shaun Weekes

Thanks for taking the time to help! I don't think its the length of time I've been at my job that the banks are concerned with.. I think it's more the income history. I can only provide 7 months history of solid income, but I have technically been at my job for about 4 years. After I graduated, I just switched positions and started making a much more significant income. Any tips on how to get around their need for a longer income history?

@Zachary C.

Thanks a ton for taking the time to help out! That was a helpful response. I will give it a shot and start asking the banks if they would consider doing a business mortgage. I think what it comes down to is the fact that I'm just going to have to be relentless and keep asking until one of the banks says yes.

Again thanks so much.

Here's my situation: 

I just graduated college in May, started my new career in June, and have been working there for around 7 months. I get paid on straight commission. I have saved up enough money to put a down payment on a rental property, but I am having A LOT of trouble finding a bank or credit union that will provide a loan without me being able to provide them with 2+ years of income history. I have been calling several local banks or credit unions but no luck so far... 

Does anyone have any tips or advice on the best way for me to find financing for the property?