All Forum Posts by: James Allen

@Brian L Dowler - I wouldn't do it. I would seriously consider tenant quality when buying a property. 8.6% Return is not bad but for rents at $550 or $600 per 2 bed unit tells me you're most likely not in a great area. What might pen out on paper at 8.6% cash on cash will very likely work out a lot less in real life. If you're fine with the tenant quality these rents attract, then I'd at least shoot for a 12-15% minimum ROI.

Here are some thoughts I have:

1. Landscaping seems a little high year round. It'll depend on your area and the amount of land you have to maintain so it could also be okay.

2. Why are you paying $75/month consistently for pest control? That should be a one time thing if you had an infestation of bugs unless they're constantly spraying the area for you but that's still a lot! 

3. Water/Sewer seems real high but I'm guessing your common areas are bumping that up. Do you have washer/dryer hookups in the units? That could add to your rents especially if you got washer/dryer in each of the units as well. Then you could eliminate the washer/dryer downstairs. 

4. I'm not sure of the layout but after you take care of the washer/dryer you could possibly convert that common area to another unit and increase rents even more. Especially if you have parking available outside. 

@Richard Jeffers - interested, can you share with me who it is? 

Honestly, I wouldn't do it. Most of the time the success rate has more to do with the person than the program itself. If you put a lazy person in the best $50k real estate guru program they still won't get any deals done but you could leave the most driven person in the world to figure it out for himself without a program at all and I believe he'll get the job done. 

All this to say at 15k-25k, you could literally purchase a property at that price. There are some GREAT courses that cost hundreds of dollars. I've done a course with cody sperber before which was really insightful for $495 and I've even recently paid for a RE course by Meet Kevin who's a youtuber and investor and that one cost about $230. Not to mention I've read countless books that cost about $10-15 per book, attended REIA and other investor meetings and read articles/blogs, listened to podcasts and watched youtube videos all for free. My entire education won't even come close to that 15-25k. The rest of my knowledge comes from experience of going out there and just doing it. If you want to get more information that's not available online (although most things are), consider networking at REIA meetings. For instance you could find a great deal and work with an experienced flipper you met, split the profits and get an amazing hands on experience on how they manage a rehab project.

@David Zheng - All I can say is congrats man! I got started around the same time you did learning about real estate and for you to get 36 units from then until now, hats off to you. 

@Sam Besong - Hi Sam, not sure where you live but if you live in California, you'll still need to get an LLC in California otherwise the state comes back after you come tax time. Either way, I recommend talking to your CPA about it.

@Phillip S. - Your realtor is WRONG! Inspection contingencies are very common and are in most offers. In ultra competitive deals it's true that you may need a 0 day due diligence to win the deal but very often you can win even extra competitive deals with low amount of days diligence like 3 or 5 days. Trust me, this is not a 50/50 topic or a market specific thing, get an inspection contingency like everyone here is saying. 

@Skyler Mckinney - I think you're missing the point! In real estate, a W2 Job is a HUGE asset to get you going in the game of real estate. I think you just made things 20x harder on yourself by quitting. Not impossible but I have to say the odds are stacked against you. I agree with the others saying you should either get your old job back or get a new job that you like better. 

Don't forget to budget for Lawn Care! To answer your question of if it's a good deal or not, I couldn't justify a cash flow of $148/month for a 4-plex not counting trash and lawn care. When you factor those two things, you may find yourself breaking even or possibly slightly negative cash flowing. I always want at least a buffer of $100/door. Now with that said, I'd look more into the trash situation. Some cities will cover the expense of trash. 

@Kevin Polite - I invested in that zip back in 2017 and it was a Great time with house prices soaring! Like you, I’ve seen the market slow down. Last time I checked there was about 4 months of inventory on the market for single families which is not bad but still a lot higher than where it was in 2017. I’m still open to deals in this area but I’m being extra cautious and looking for something special at this point if I’m gonna pull the trigger.