All Forum Posts by: Greg Miller

Awesome start to your investing career!!!

WOW is my first comment! Paying all cash for a $525k duplex. There are a lot of people that wish they were in your situation. Capturing a 10%/yr appreciation + 5%/yr COC is simply awesome since you bought this duplex!!! Your financials tell me that appreciation is much greater than the cash-on-cash. Personally, I would take the appreciation gains off the table while you have the chance.

Think of it this way.  Someone is going to hand you $100k for simply owing a property for 24 months.  If you look at the appreciation on a monthly basis, it is twice your monthly cash flow.  Take your gains when you have the chance.  If it was a hot stock, you would have already liquated your position.   

I have a personal rule.  If I cannot see my self living in the property, then I will not buy it.  Mentally, I cannot ask for monthly rent when I would not live there myself.  I might be very conservative in my thinking, but it has helped me through these types of situation before. 

The COC is below 10%. Can you sub-meter the water and tell the tenants they have to pay this bill? Same thing for the heat? I would find creative ways to get your COC above 10%.

As for the rough area of town.  Reach out to at least two other investors in the area and get their feedback.  The last thing you want to really stretch your numbers and find out you bought something in an area that has problems.  This would not be a good situation.

Sounds like a great plan! House hacking is a wonderful first step to build sweat equity. Remember, you can get a FHA loan with only a 3.5% down payment. You just have to live in the place for 12 months.

We have 8 single family house in St. Louis.  It took 8 years to accomplish.  However, we stopped for 2+ years while we built a new house.  Once the new house was completed and our personal finances were more known, then we entered back into the buying mode.  My wife became a full-time real estate agent last year.  As her income increases, I look to pay down our line of credit and snowball our early loans.  I recommend snowballing when you have a 6 month emergency fund in place and can easy pay all of your monthly living expenses.   

I also used a HELOC to buy my first single family several years ago. It started the ball rolling for me. I would only use the HELOC for the down payment. With interest rate going higher in the future, you want to lock-in lower fixed rates when you have the opportunity. You will probably see your HELOC rate increase again in the next few months. Mine recently went higher.

As an example, I did a cash-out refinance 7 years on our second single family.  A national bank gave me a 15-year fixed rate at 3.625%.  I will not pay this loan off early, because the money is so cheap. 

I include both the vacancy rate and capital expenditure into both of my calculations. This is because it provides me with a true picture of what really can happen. On single family houses, I use one month vacancy for every two years. I find that people do not want to move unless forced to move. The 10% capital expenditure is accurate. We are currently finishing up a single family BRRRR. We installed a new HVAC, roof, kitchen. The electrical and plumbing were already upgraded. Therefore, I will use a much lower % in my financial calculations.

Please reach out to Andy Bourneuf.  Andy lives in the City of St. Louis and owns a number of rental doors himself.  Andy has very high integrity, does great work, charges a very fair price, and can handle a number of requests.  I have used Andy on my single family rentals for several years. 

I have been to Bozeman before...great ski country!  One piece of advice, you must live in the house for 2 years and 1 day for it to be considered your primary resident.  Otherwise, you will have a different tax situation when you to sell it.  You have value add of $27,000 by taking the $335,000 offer vs. $385,000 market price.  Remember, the 1% rule...you need to earn at least $3,350 per month in rent ($335,000 x 1%) in order for the finances to work at a very high level.  Therefore, I would rule out option #1 and look cautiously at option #2.  Best of luck!

The simple answer is no.  I bought an assigned contract last year and the seller did not have to appear at the closing.  The wholesaler did not appear either.  However, the wholesaler terms where that we had to close at a specific title agency.  No problem on my part, since the financials worked out very well.