All Forum Posts by: Jerod Smith

Thanks everyone. We removed #2 and updated everything. It looks great and we've removed a bad Tennant!  

 I currently have three, one bedroom cottages on our property along with our personal home. All are rented at the moment, but my wife's grandmother needs to move into one because my wife is her primary care giver and she is elderly. 

 Tenant number one has been there 15 years, doesn't pay very much rent, but is a model tenant. 

 Tenant number two has been there for 12 years, been late on rent several times, has a dog inside the unit and smokes inside the unit.  Both of which are against her lease.  (This one is pretty outspoken and will give me major grief if I ask her to leave.  Her grandkids lived in unit 3 and left on bad terms)

 Tenant number three has been in the unit less than one year and pays the most rent, keeps her unit clean, and has never been late on rent. 

 All three are ladies in their mid 60s.  What is the correct philosophy concerning who should move out because of our family situation? 

Thanks in advance!

Jerod

@Jose Guevarra where in Oklahoma?  I'm willing to help. Pretty well connected in the church world here in Oklahoma. 

@Steven Thomas I'm in Sapulpa but can't make it Tuesday. How can I find out when you're meeting again?  I would love to come next time!

Need a little advice.  Here's the deal in a nutshell:

Multi family unit 4-plex, asking price is $130k.  Rent gross is $1475 currently. Property is in good shape needing only very minor repairs.  Current owner owns the empty lot next door as well, but was only selling the 4plex currently.

We bantered back and forth until we reached an impasse at, either $120k for the 4-plex or $125k for the 4-plex and the empty lot.  (I asked him to throw that lot in once we got stuck at $115k...me....and $120k... him).  So he came back with the $120k without, or $125 with.)

MY QUESTION: How close do I let this deal be before I take it? My Threshold was originally $120k without the lot. This places me at $120.71/door, and 17.77% ROI, with $5000 repair cost.

At $125k, I'm at $112.80/door, 16.04% ROI, same $5000 repair cost.

Am I crazy for pressing for the $120k with lot included?  Or should I take this deal because we're so close anyway?  

*Lot is in town, 1 block from city center, town of about 20k.  I guess the lot is worth 7-10k.

how long are most people holding until they refi?  And is the rent received during that period added into the equation to reach the cash out number?  Im new and have analyzed dozens of properties trying to use brrrr. I haven't found a single property that would allow me to completely cash out, and my lender will do 80% on refi. 

What am I missing?  Over estimating the rehab cost?  I've been using $20/ft for a property that needs a pretty detailed rehab. 

@Ryland Taniguchi love this idea, thanks for the clarification.  I may not be there now, but will as I learn and do my first few houses.  BP has been a wealth of information for me!

Thanks again,

Jerod

@Ryland Taniguchi So, are you leaving money in each deal? According to the above scenario you would be leaving a sizable amount of money in at 75%. I was under the impression most BRRRR deals allowed you to bring the rehab cost back out for the next deal.

Am I missing something?

@Ryland Taniguchi thanks for the input.  I would love to hear how you are picking up 6 a month.  I'm a newbie, but I can't find 1 to pick up.  Seems like they all end up being bad deals.  Can you enlighten me a bit on how to find better deals?  I'm in a small market (for now).

ps. When you say 1% rule, are you meaning the rent must equal 1% of the ARV?

Thanks, Jerod.

Total sense.  Great strategy to keep $5k in reserves for each house.  Simple too.  Thanks.