All Forum Posts by: Mike Sales

I really love real estate, I've been studying and looking at REI books for a good 5 years, and I like the prospect of working in the business. After some reflection I've decided on two jobs that I think would be beneficial. I like appraisal the as a job the most, as I believe it allows me more freedom, to work in a self-employed capacity. I'm not really very fond of working for other people, and I like to take "fish" so to speak. I've also come to the realization that in order to get rich, you can never buy anything at retail, and have to becoming adept at recognizing undervalued assests. I think appraising offers me the best oppurtunity to do this. However, property management is the nuts and bolts of the business, the actual management of a real property can perhaps be priceless. What would an experienced investor assert is more beneficial to a REI career?

Aly I think the conventional wisdom, is operating expenses are generally 45 to 50% of gross rents.

Ok, I'm not actually going to buy but, I've been looking at this site excessively, and decide to give my valuation skills a go. After a few days of going over properties via, realtor sites, craiglist, etc studying the market I will invest in I ran across this.

4 unit building(really 5 units but 5th is unfinished)
Sales price $89,900
Apprasial Value 109k

All units have been rehabbed fully. New energy effecient furnaces, rehabbed kitchens with hardwood floors, new bathrooms.

100% occupancy.

Gross Rents $2250
PITI 69k @ 8% over 30 years is $1006
NOI is $1244
Expenses $1125
Positive Cash Flow of $119

Claims contractor says 6k to get the 5 unit going and could rent it out at $500

Would this be a winner or loser? This would be a property I would go and check out as a newbie, if I were buying.

I was wondering if it always a bad idea to buy cheap homes in cash I'm talking homes that cost 10 to 15k and a few grand to fix up, then hold and rent them? In a few years you would have recouped your investment and everything after that besides maintance,taxes is profit..for umm as long as I want. Or is that the "long way around"?

In the future(7 to 10 years)I'm looking to invest in a multi unit apartment building as a part of my retirement portfolio. In order to get approved for a conventional bank loan how much do you generally need as down payment? How much does personal income play a role in say a 40 to 50 unit apartment building?

Is is unsual to get 30 year fixed on smaller commercial loans like 12 units. I must say I was suprised at just how cheap some multi unit places are. Like In some areas you can find a 12-15 unit for less than a half a million dollars. Now obviously you have becoup expenses and it may be a bad deal..but I just always assumed that buying a building like that required tons of money to purchase. So I know there is oppurtunity out there when I'm ready. Right now I want to focus on making sure my credit is established and working up the down payment on that 4 unit. So that when I get out, I'll be able to find me a nice to place jump right in.

Thats what I don't understand about buying multiple properties in ones name. Eventually wouldn't you hit a certain DTI where you would no longer be able to get anymore mortgages in ones name? How does one build a portfolio of 9 to 10 multiunit places without running into DTI issues. I am being modest but 100 units is a massive portfolio you're talking about what will be almost tons in gross rental income when I retire.

I'm a 23 year old college student. When I get out of the military(officer). Instead of buying a home, I'm confident, that I'm buying a 4 unit owner occupied, live in one and rent out the other three. Hopefully, If I finese it right I should be able to cover the mortgage on the place, and live rent free. The savings over a 5 year period, I want to start to invest in real estate as long term investment vehicle. My goal is is establish an LLC, and hopefully acquire about 100 units over the course of my life. I figure if I'm able to reach this goal and hold and let the tenants pay of the mortgages, I'd have considerable net worth and plenty of cash flow in retirement. Obviously a lot can change. But I'm pretty set in my belief that real estate is a long term investment vehicle that is relatively safe. My question is what is the best strategy to go about this as safely as possible? It would take forever doing this by acquiring two and 4 units.