All Forum Posts by: James Allen

Hey Guys,

So I found a 4 unit multifamily that cash flows pretty well. It may be a retail value as far as comps for the asking price are concerned but my question is should that matter if the cash flow is on point. Here's the numbers

Asking Price: $279,000

Funds: Conventional 20% down

Tenant occupied in all 4 units

Total Income: $2550 rent per month

Property taxes: $154 per month

Insurance: $72 per month

Utilities: (Tenants take care of Gas and Electric) - Gas - $9 per month, Electric - $31, 

Water - $220 Trash - $79, Yard Maitenance - $50

Extra Monthly Maintenance - $50

Cap Ex - $100

Vacancy - $100

Property Management - $200 (I will actually plan on managing myself for now but calculated this for the future) 

Mortgage - $1,079

Total Expenses: $2144

Income - Expenses = monthly cash flow

Total Monthly Cash Flow - $406

Down Payment: $55,800

Closing Costs - $8,500

Rehabs needed - $0 (Already Rehabbed Kitchen and no repairs needed)

Total Investment - $64,300

Annual Cashflow/Total Investment = Cash on Cash ROI

4,872/64300

7.6% Cash on Cash ROI.

Now honestly I would like to at least try and get a 8% cash on cash return so I wouldn't offer full price but if I was able to get to the 8% point, is this a lead worth pursuing or is it not that great?

Thank you in advance for your advice!

@Chris Mason -  Would family money be acceptable? 

@Chris Mason. The property is in the state of California and I'm supposed to make a best and final offer  today because there's a few offers on it. I'm wondering if I should just pull out on this deal all together or is there a way to get this deal done other than a 60 day escrow which my agent says will definitely not be accepted? 

Ok, so I have an offer in on an investment property right now. I'm having a dilemma because I got pre approved for a 15% conventional finance loan on an investment property going for $179,000. I have a total of $42,000 although the dilemma comes that $13,500 is in a Unsecured Personal Line of Credit. My lender is now telling me that I need to have that money in my bank account for more than 30 days so that it doesn't show on my bank statement as a big deposit. 

I was freaking out about this because I could lose the deal over that. I spoke with my real estate agent and she assured me that It would be fine because they just want to see that it's not cash coming from who knows where and that they can trace where it came from. She said that when they trace where it comes from, aka (the personal line of credit) it will be fine. So I've started talking to another lender who will hopefully be ok with this. (I should know by tomorrow) Although he also mentioned that he thought the minimum down payment for an investment property is 20% and that he was going to check that out. 

With that said, I wanted to know if I am to transfer my personal line of credit over to my bank account will they will view that as ok? Also, I'm confused why one lender says 15% is ok for investment property and the other says 20%? Which one is correct? 

Thanks so much in advance for your feedback!

Can anyone recommend any great Title company in Los Angeles? Looking for someone who is investor friendly, comfortable with assigning contracts and double closings, etc. 

Hi, I'm looking for a GC with experience doing flips for investors. I'm particularly looking at properties in the Palmdale/Antelope Valley, CA area. I've already begun making offers on properties but want to have a GC ready to go for when an offer gets accepted. Any recommendations would be great!! 

Thanks,

James

Dang, wish I could throw my name in there. Very cool that you're giving someone this opportunity!

@Brandon L. @Russell Brazil Would you say the same for Low ball offers or do they generally understand that is what is needed in order to make a profit? 

I've heard so many people talk about making 60-100 offers a month. I think that's great and all but won't a Real estate agent find that really frustrating making 2-3 offers a day or low ball offers? I'm asking because I have a great investor friendly real estate agent I've had referred to me and I'm meeting with her this Saturday. I'd like to be straight forward with her about what my plans are and such. I'm ready to kill this game but I want to make sure that what I'm asking is actually normal to expect?

Currently I'm looking to get pre approved by a HML for about $150,000 so I can start making offers.

I reached out to a HML and they mentioned that I would need at least 30% of purchase price in cash and then also closing costs as well and that this was very common in the HML world. I currently have about $40k between 26.5k cash reserves and 13.5 k Personal LOC. I'm looking to purchase houses at between 150k-180k which she was saying I would need at least 55 k to get approved for a HML (45k for 30% of the $150k purchase price plus $10,000 in closing costs).

Is this normal for all HML or should I just keep shopping around until I find someone that will help?

Thanks,

James