All Forum Posts by: Jacob Dinkins

Howdy folks! Thanks for the responses and input on this thread. After doing more homework, I've decided to buy the fourplex in/around Cleveland, OH. I'm convinced it is the single best market for cash flow in the USA. I'm looking at four-unit properties that run around 100K - 140K where rents are around 2K - 2.2K per month. I'm taking into account the added fees for FHA and MIP and calculating my P&L with 5% of rents ($100) for CapX and then another 5% for Repairs. Planning to pay property managers about $200/month. I even calculate in a small monthly 'stupid tax' for my first deal since I figure I'm bound to mess something up along the way. Even so, I'm confident in achieving >30% cash on cash ROI with the FHA loan and my horrendous 605 credit score.

I've been approved for the loan now and very seriously scouting for the property. It's difficult to find a good realtor which has surprised me. I could close tomorrow if I found the property and yet it feels like nobody wants to help me look, ha! That's not what I expected. Today I'm scouting for a better realtor and hoping to connect with 2 who will get me on consistent email updates. The other guys NEVER send me updates and I"m finding stuff on Loopnet and realtor.com BEFORE my realtor sends it to me. What in the world is that commission for?

I'll update this thread when I finally close on something. I've been taking my time but I think my strategy and expectations have become more pragmatic after researching and continuing to run numbers and analyze deals. My goal is to close on this sucker in the next 40 days. Maybe I'm dreaming. Updates to come

P.S.I calculate cash-flow based on all 4 units being rented. It is true that I will not cash flow while I'm living in the property. I will have a very low mortgage each month. I think it will be around $100/month. I currently pay $1400/month rent and not a dime of it goes towards building equity in an appreciating asset. I'm sure that someone with a better credit score could do exactly what I'm doing and cash-flow with FHA even while living in one of the units. It would be a small sum but it would be a net positive. My APR is 5.5% with my 605 FICO. :(

How'd it turn out?

Thank you all for your thoughts, insights, and resources shared! Very much appreciated!

Greetings,

I'm looking at small multifamily properties in/around Cleveland. I'm investing from out of state so I'm not opposed to other parts of OH with strong rental markets however I have been drawn to the areas around Cleveland (and Pittsburgh, PA) in large part because I'm limited in buying power to properties valued around $100K.

I'm a new investor and foreign to Cleveland so please share any tips that you may have about the area. Please feel free to share your experiences and advice and any insight you may have into making a smart investment decision in this area.

One topic that is of particular interest to me is realistic capX estimates in the area. The majority of properties that I'm looking at were built around 1920 - 1930. Most have been duplexes of roughly 1800 - 1900 sqft. When I 'run my numbers' for this area, I have been calculating capX at 10% of rents but I feel uncertain doing so. Can anyone speak to realistic capX in a property like this? Say each unit rents at $750. Is $150/month really enough for capX on a 1900 sqft duplex? I've also been estimating repairs at 10% of rents.

Thanks!

@Rick Stout "Sulphur Springs" made me laugh. Does not sound like the place I want to live. What you're saying makes sense because the fourplexes I'm finding on loopnet typically run $300k - $450k but the realtor I spoke with in Tampa yesterday said that most of them run around $200k. 

I'm really not interested in D neighborhoods. I'm looking for B maybe C. Do you think I can reach my goal of $1,500 cash flow if I go for a quad around $400k in the Tampa area?

@David de Luna Thank you for the reply! That sounds like some really sound advice. Since my original post I've started focusing on Tampa, Florida with Lakeland and Orlando as backup options. After talking to realtors in Central FL, I've started looking for a fourplex around $200K - $250K for my first deal. The big attraction for me to buy the fourplex is that I can stop paying rent and I can make it happen with such a small down payment. My hope is to pool enough cash for a second property within six months of the first purchase. I haven't really started researching but I'm fantasizing about finding 10% down with a conventional loan on a flip or BRRRR deal around six months after I get into the fourplex. Maybe I'm dreaming.

Hello, BP!

I'm looking for my very first deal. I want to househack a fourplex and generate as much cash-flow as possible using an FHA loan with 3.5% down. I have a job where I work from home and I'm willing to move anywhere in the country where I can maximize the cash-flow on my first purchase. My main question is: which market would YOU choose to invest into if you wanted to maximize cash flow on a Fourplex with a low down payment?

As a side question, I would really love to hear what kind of cash-flow folks think can be achieved with a single fourplex. Is it pie in the sky to think that I can hit $1,500/month on a single fourplex? How much do you think I should hope to cashflow?

Thanks everyone!!!