All Forum Posts by: Harry M.

Hey Drew,
You have to put some money in your figures to account for closing costs and fixup for the purchase part, and for vacancy, repairs, capital expenses, management and leasing costs, and utilities while vacant. That, and having reserves set aside, in case something big breaks.
All of that said, the numbers looking pretty promising (though I don't know anything about what fixup costs you might have).
Refinancing #2 - because it's a 5-unit, it's considered commercial for lending purposes. But most commercial lenders are interested in lending much bigger amounts. Probably your best bet is a small local bank or credit union that keeps their loans in house. Once you've found a lender that will do that, you could start an account with them, so that you've been a customer for a few years when it comes time to ask for a loan.

Best of luck!
-Harry

Jenkins Ramon - thanks man!

Jay Dao - It seems we have the same property mix too, we just got them in a different order. Our duplex was our first, then two SFHs. I think duplexes can be a great investment, and ours has been performing really well so far. Particularly the ones that feel more like houses fill an important niche in the market between apartments and houses.

Robert Ruiz - I really enjoyed reading your post! I have two boys, 6 and 10. I've started explaining how it works to my 10 year old, and of course the kids are with us sometimes when we are looking for properties or dealing with a vacancy. I feel that there are some good lessons. Not just in teaching the idea of making money work for you, but also in showing the relevancy of math. I'm right with you about these things not being taught sufficiently well in school. Money - forget it, but also math - they learn the mechanics for sure, but there is way too little about applying it in making the decisions in your life.
I've taught my 10 year old the basics about how it works, and how the first property pays for our groceries, the second for our water and electricity, and so on, and how Dad doesn't have to work for those things anymore because we saved the money to buy the properties. But I had seriously never thought about the idea of letting them put their allowance/chore money in! I don't know how I feel about it. I think by allowing them to actually invest you are teaching a lesson that can't be taught by all the book learning in the world. Even what I'm doing - explaining how it works - is abstract compared to actually letting them do it. On the other hand, you don't want your kid crying because you found 2K of extra work in the attic because the roof was leaking and they overheard you talking about it. I think if you can find that balance of letting them participate but still protecting them a bit, then it's an awesome idea.
-Harry

Hey Erik, welcome to BP, neighbor! This place has been an absolute Godsend to me. I've learned so much. I hope it's as helpful to you as it has been to me.
Although it's gotten a lot more competitive lately, I believe that DFW is a great place to invest, and it sounds like you're off to a good start.

Hey thanks guys!! My wife and I are finding the rehab aspect highly addictive...

Jay Dao - congrats on your #3. What kind of property is it?

-H

It's just a little step, but a step nonetheless - we closed on rental #3 last Friday (coincidentally my birthday), and rehab is underway. This is our first rehab, and we are kind of looking at it as our practice rehab before buying a property to fix up and flip.

After buying our first two rentals in 2010, some problems with extended family hit in 2011, and it wound up being a drawn out and expensive ordeal. It took us all of 2011 and most of 2012 to get back to where we were. After that set back, it's really rewarding to have been able to add another rental, and get back in the game instead of just talking about it.

I'm sure I'm going to be learning lots this go around, especially with it being our first rehab.

-Harry

Hey Charles,
I found this other post on BP, where David Beard gives some really good info about the delayed financing rule. Hope this helps:

http://www.biggerpockets.com/forums/432/topics/86149-refinancing-right-after-cash-purchase

-Harry

Welcome to BP, Charles. Thank you for your service. I hope you learn as much from BP as I have (stumbled here 3 years ago, and still learning as much as day 1!).

Welcome to BP, Charlie. I lived in Germany (Hamburg) for a short time as a teenager.

Welcome to BP, Onan!