All Forum Posts by: Jean-francois Ndomb

Great tip @Jared Bandel, I will be contacting my lender soon. But i am currently buying a 4 unit and looking to occupy one of them and qualifying for an FHA loan. He told me that he can definitely make it happen. But I will inquire about the multi family and see if i can get that instead. That would be great. Thanks for sharing guys, great tips and techniques, that i will be looking to explore. Good luck Jared. @Greg Pond do you put all your cash flow back onto your mortgages until they get to 20% typically and refinance?

Great question to share @Jenine Kenna I will do some purchases under my LLC and that will def help. Good luck and congrats.

@Marcus Martinez if time is against you, as though it ever is on someone's side, you should look for other ways to raise cash in real estate. For example, whole-selling , dog-birding for a local cash buyer, look on Craigslist what comes up and keep looking, daily, twice or 3 times per day ( i am sure you have a smart phone and check your Facebook more than you check for deals online). There is always deals out there. You might not get the big ones at first, but it doesn't mean you wont get a Lil cash out of a few others. Just don't frown or hang your head, no one who wants to be successful ( you clearly seems motivated to do the work) has time to focus on negatives. Keep positive, try ever trick in the REI books do not take your eyes off of the price ( your first duplex).

@Marcus Martinez, like the guys said up there. If DTI ratio is pulling you down, you got to start hustling. And start by limiting the amount of times you run your credit around looking for mortgages. Get a second job if your schedule permits it, become frugal on all aspect of your lifestyle. And do not lose hope, like @Jake Thomas said, it could go down within a few months, but lots of other things can bring it back down. Save, payoff debts and stay consistent with the progress. It wont be easy, but it'd be worth it. I can relate. Good luck.

@Marcel Theisen, I believe he is trying to avoid foreclosure and has until August to resole debt from my understanding meaning he should be motivated. I am currently planning to pay myself rent to maintain my investor numbers ( since I am only moving in to take advantage of the FHA Loan) and stay consistent throughout. The seller seems set to set as is, therefore i will need to adjust my offer after inspection and adding up he potential fixes. Current leases are all over the place on dates. One new tenant as of last month, another one that has been there for some time and 2 just moved out. ( Pending applicants waiting to move in). I was planning, if i end up getting the deal on my terms, keep the 2 vacant units vacant, that way i can do some touch ups, cosmetic updates and when ready, bring the rent up right away on those two. Then do the same after the other tenants move out. My luck is that the 2 hat are occupied are at $475, a $25 bump wont be too bad, might even go to $550.

At $60k would YOU take the deal?

@Marcel Theisen you are Heaven-sent. I just read the article and i would have been screwed in the very near future at this rate. I re-did the calculations after reading and like mentioned in some of the comments from some members, it really take a profitable cash flow deal to a not so much of a deal vibe. I will factor all the big tickets items in my offer and try to get as much as possible covered or fixed before any future negotiations. My CapEx seems to be about $200. which bring that cash flow to $230. Assuming I get it all fixed to start by the seller.

@Michael Boyer Thank you for the feedback. I will adjust the numbers and review the offer. The units are way below market averages. In the report, there is no comps within 12 miles that have 1 bedroom units and the ones that do are $700+ per month. I definitely have room to raise my rent to $500 all around after some cosmetic updates. which is my plan from the get go. I am attaching the new numbers, but with $200 cash flow, is it worth it ? What would be a good offer if he addresses the necessary fixes and what is the right price if he doesn't? Thank again gents.

Image Without raising rent- makes no sense to have this cap rate ( 3%<)

Second with rent raised to $500/Unit.

Hey BP,

I am in the process of making a final decision about buying this 4 unit flat, independent layouts under the same roof. The numbers from last year that I got from the seller are in the table below. With all inclusive, the cash flow (not net) is $1,740. The asking price is $71k (Worst case scenario). I did my number with the recommended percentages and end up with a net cash flow of $400 for the 4 units. I had a conversation lately with a friend of mine who is a successful investor, owns over 20 properties. He is well seasoned and does a lot of his stuff himself. He thinks this is not a good enough deal, because if you separate the units, you are only getting $100/Units cash flow, which I agree is not good enough. How ever, I am getting a FHA loan, low down payment, and will live in one of the units myself and will be doing the renovations and the maintenance myself for the first year. On the negative side, last inspection the seller got in August 2015, mentioned roof needing replace or repair in the next 5 years or so, some minor waterproofing in the basement will be needed ( I can attend to that myself). One of the unit's AC unit is down and it is causing tenant to use electric sources of heat, hence raising the electric bill out of the norm. And the property ended up being appraised at $86K. Please look at the numbers and give me your investor's opinion so I can make a sound decision on his buy and not based on my excitement of ownership.

Thank you in advance for your time. 

Yours in success,

JF

@Rick Turman no worries Rick, The new born Wee hours never go away hahaha. Congrats by the way, I also have a 6 year old. I will try to do the 6 am Lowes run next week and see how that goes. The Lord works in mysterious ways, I got a contact from a friend of a G.C that has been doing work around last night and set up a meet/interview this Friday to connect and plan for a potential business future together. I go to the Local Renters Associations and REI Meet-Ups and i am yet to find the legit REIA group meet in the area. But I will make a point to find it by next week.

JF