All Forum Posts by: Guille Valdes

As for planning to finance 100% for 22 years and creating an average, every market is going to be different. The cost of financing in a metro city vs a rural city will be incredibly different. This will alter your strategy and how much equity over the years you can pull out of the properties so it needs to be tailored to the market that you are targeting. Also, know that you can dive into a bunch of other things as well and it is not very often that your plan goes according to plan.

If you are trying to get a rough estimate and be on the conservative side. Most banks require a 25% down on any investment property. I'd take a look at what the cost of small multifamily costs and go from there to retroactively see what that is.

For Example:

- 1st year: Duplex @ 500k (500 x .25=125k). 125k Down Payment Needed.

- 2nd year: Duplex @ 500k w/ 125k Down Payment.

- 3rd year: Quadplex @ 800k w/ 200k Down Payment

You get the picture. These will usually start having more of a snowball effect, but it will take A LOT to go at that rate at that price point which is closer to my market. This may be completely different for you and also change down payment-wise if you are owner occupying (you can get down to 3.5%). From there you can create a couple different scenarios to see what you might need for each for financing everything.

This does not account for market fluxations or the rising/dropping of prices.

Hope that helps!

Hi William,

Thank you very much for the help. I agree that prices for different markets, and even submarkets, will vary a lot. I'm actually targeting SFR or small multifamily residences near urban centers in towns around Puerto Rico, especially focusing on properties valued under $100K.

I want to rephrase my original question, since I noticed it is a bit confusing. I think the simplest way to put is: what average % of all costs (purchase price + closing costs + repairs) have experienced Real Estate Investors (1-50+ units acquired) had to put out of pocket EVEN when their intention was to put $0 out of pocket.

I doubt many people will have this number, but if anyone has the data on their investments, I truly appreciate the input.

My end goal with this question is to see how realistic is to assume one can constantly find deals where one's able to finance all costs by using financing options like: traditional lending, private lending, seller financing and partnerships.

0 Votes

San Juan, Puerto Rico

Hi!

I am a newbie in my education and research phase, looking to buy my first rental property in 2022. My plan is to start now and scale this rental property business by buying 1 unit on year 1, 2 on year 2 , 4 on year 3, 8 on year 4, 16 on year 5 and then keep buying at least 16 units each year for 22 more years.

I know these are just estimates and goals, but I have been wondering how much cash should I expect to put of my pocket when my plan is to finance 100% of each deal (at least for the first 5 years) using a combination of: traditional lending, private lending, seller financing and partnerships. And when I say 100%, I'm including purchase price, closing costs and repairs (keeping reserves out of this equation).

I guess the question would be: if you are an experienced investor who has planned to finance 100% of the costs of your purchases, have you been able to actually finance 100% or, if not, what's an average of money you've had to put out of pocket for each unit you have bought? If you have the average cost per unit, that would be great too, for reference.

Thanks!

0 Votes

San Juan, Puerto Rico

All Forum Posts by: Guille Valdes

Guille Valdes has started 1 posts and replied 2 times.

Post: How much "skin in the game" should I estimate for each unit?

Post: How much "skin in the game" should I estimate for each unit?