All Forum Posts by: Colin Simpson

Welcome Kramer!

I am also pretty new to the REI game! I've been on BP for a little bit but I just moved back to LR and looking to get started in the area!

Best of luck, newbie to newbie!!

@Pat Tibbetts That's great! I think had I gone active component I may have done that but I took the reserve route.

@Thomas S. I really like the idea of finding a multi-family. They just seem hard to come by in this area.  I will keep looking though, thanks!

@Paul Thompson Thanks for the post! I really appreciate the advice. I looked into the CARREIA and it looks like there is a meeting this upcoming week so I will come by. Thanks for reaching out!

Thanks for the post @Nick Ferguson! Your situation sounds very similar to the one I'm currently in. My third option that I inconveniently left out (or option 1B) was to find a moderately straight forward live-in flip.  I like the sound of being able to put your own touches into something. I will look further into that option! Thanks for your help!

And if you don't mind me asking, how were you able to find that house? MLS or did you use something else?

Thanks for the help @Brian Pleshek!

I guess I failed to mention that I do plan to be in this area for a few (2-5) years at least even if I did move off and that I would plan to hold on to whatever I bought and use a PM. Also, from what I have gathered (which I may be wrong), the better cash flowing properties seem to be in the less desirable neighborhoods here. I understand that this may come with a host of other problems, bad tenants, etc. though.  I do prefer the duplex idea but I have struggled to find them in areas that I would consider living in.  I will continue to look and evaluate my options though!

Hello BP,

I am looking to get my feet wet in real estate investing after I just recently graduated college and started working a 9-5 in Little Rock, AR.  I want to get started, I'm just at a fork in the road on how to do it.  I think that I have a few options and hope to hear advice and/or stories as to how people may have started in the past.  I don't know how long I plan to stay in this area so I am wondering whether or not to factor that into my decision.

Option 1: Buy a house or multi-family to live in and rent it out if I leave the area in the near future. I know that because I would be living in it I would spend more to find houses in the area I wanted to live in and I have not found many SFR in those areas that offer much cash flow by my calculations.

Option 2:  Buy an investment property and rent for my primary residence for the time being.  I think this might allow me to pursue a better deal since I would not be as worried about the location.  This option intrigues because I have heard a few people on the podcasts say that they have rented to buy I just feel like the other one is probably the safer bet. 

I look forward to hearing your opinions!

Thanks for the input @Chris Kennedy!

I did not go through with the deal thanks to the input I received and quite a bit of "analysis paralysis."  I apologize it has taken me 2 years to reply to your post but I was just going through my old posts and saw that I had not replied.  Just reading through it gave me that "aha" moment on calculating expenses using the 50% rule of thumb that has been bogging me down. Thanks again!

@Chris Adams 

Thank you for responding, I greatly value the information and opinions I get on this site from investors such as yourself.

I do plan on taking care of all maintenance and landscaping. I have a background in general construction so I hope I can do most things on my own.

As far as all utilities including garbage, the tenants are responsible for that but perhaps I should check the city's policy regarding sewer and water being lien-able.

The duplex is nearly 20 years old but appears to have been well taken care of so other than the initial cost of the washer and dryer I don't foresee many maintenance expenses.

Also, I do have a bit saved up for any disasters I may come across, though I'd really enjoy not having to dig to deep into my pockets!

BP,

I am currently looking to purchase a duplex (3bd/2.5ba) that I plan to live in and rent for the rest of my time here in college. With no real experience in REI (but wanting to begin as soon as possible) I thought I may run this deal on the forums and see I can get some feedback from more seasoned investors. I have ran some of the formulas such as the 1% rule and the 50% rule but I just don't know how well of an indication that is on cash flow in this situation. Some details on the property are as follows:

Listed Price: $179900

Purchase Price: $175900 (may start offer at 170900)

Down Payment: 3.5%

Loan: 30 yr fixed @ 3.75%

Monthly Payment including taxes and insurance is estimated at $1,212

It will need a new washer and dryer on one side

I have another 5 people who would rent from me and I have told them $900/unit (units around it rent for around $750/side however $300 a person would be cheaper than they are paying now). This would bring in $1500/month (excluding my rent).

Currently each side is renting for $775 and $750. I believe I would need to reduce rates to around these numbers when these tenants moved out to keep it rented.

My plan is to live in one side while I finish my last two years of school, then either continue to rent it out or cash out (hoping it has appreciated).

I would love to have some opinions on this from other investors.

Much appreciated,

James Simpson

@Jason Fox 

Like you, I was in a very similar situation. I did tons of reading and research, found properties I liked but like you I was unable to find the financing. I took this question to my real estate professor, a seasoned investor of just over 45 years. He suggested maybe taking my investment plan to my parents and asking for a co-sign on an FHA loan. We are now in the process of closing on a duplex in which I will live in while I finish my degree, with roommates on one side and rent out the other! The hardest part was showing my parents that, if rented out, this duplex would not cost a dime (in fact it would make money). Now I am essentially "partners" with my parents... Weird! Anyways, hope this helps you figure out some financing. Best of Luck

James Simpson