All Forum Posts by: Jesse Poll

So if I do this I get
$240 cash flow
Cash on Cash return would be
240*12/7000= 41%

Am I analyzing this correct now?

I just put in my first offer yesterday. Here it is. This property is not on the market yet. They will be asking

Asking $149k
Offer $140K
Total PITIMI $1050
To get this property I will probably have to pay full price.

Here are the rest of the numbers.

4 plex FHA loan so I will occupy 1 unit.
All leases in place.
Rents from the other 3 are $1850
Figure for monthly maintenance $200
Cash flow after expenses $600
This is not actually income. It will be banked to support future property expenses.

My purpose for this property is to gain experience and have a second home for free.

I was not sure how to evaluate this property because I live in one unit rent free.

I will manage the property myself and do most of the maintenance since I will be on site.

One other concern I have is that I will have to terminate one tenants lease within 60 days of purchasing the property.

I do not like this fact as they are all pretty new leases. Also I will contact an attorney to find out legalities with this.

To make up for terminating there lease I am thinking of giving them 60 days notice and free rent for those 60 days plus refund there deposit in full for the inconvenience. I am not sure about this part. I just want to make sure that it is a win-win for everyone. My thinking is that I am not counting on rents from that unit anyway and they were not expecting to have to move.

I would appreciate your feedback on this situation.

Thanks
Jesse

@jon Where can you get a 80% ltv on an investment property? I am looking in Vegas and was told it is always 30% down.

Awesome!

@David Not sure but he did seem to know a lot about Vegas.

@Lance, I wondered why all the sudden while talking to lenders they were happy to talk to me. My conversation style has improved to Credit score 760 job 4yr and so on, lol. I have to admit that I have heard all the negative about banks not lending and i was surprised when told that I would have no problem purchasing my first investment property. We'll see how it turns out after underwriting.

@Rusty I just sold my truck to get my D/I lower to qualify for more property. I have to admit it was a hard decision me the dogs, they are still looking for "their" truck so they can go for a ride.

@Nathan on the FHA loan you were talking about. I am getting ready to put this kind of deal together, searching for property now. My plan is to live in one unit for at least 3 years while my wife does an internship. At the point that I move out will I need to refinance it and have the 75% equity in the property?

I got my D/I ratio inline and cleaned up old credit to get approval letter for my first property. Reached my goal for the month.

I was surprised at how much I qualified for considering it will be a second home and the strict guidelines that I have heard about in today's lending.

For March I am starting to look for a MFU 4plex to buy. My plan is to live in one as a tenant and let the other three offset the cost and pay for the property using a PM company so that I am simply a tenant and not the go to guy.

My main goal for March is to keep focused on my classes in college. I have gotten sidetracked with BP and need to get focused.

@Robert thanks for the welcome. I have to many questions. I think I am getting my mind put back together slowly.

@Randy thanks for the encouragement. I am excited about the opportunity and potential of this business. If all goes well I hope to be a full time investor within the next 3-5 years.

The reason I wrote this hear is because I do not know BP well enough to know where to put it yet.

Need some feedback.

I was getting ready to refi my personal home and started thinking it may not be to my advantage at this point.

Current mortgage $192000 at 5.75%
30yr that balloons in 20yrs.
PMT $1145 not including TI. Pay those separate.

Lender told me that it would save me around $250 Mth ballpark.

The reason for my doubt is that property values in my area are all over the map and there are literally no comps to compare. I live in a rural area. I had 20% in 2010 but not sure now. I want to roll in closing cost to preserve cash.

If I follow through with this loan and the appraisal comes back low I am out $650 because it does not make sense for me to pay PMI on FHA which I will be paying almost the same amount anyway.

I am preparing to purchase a MFP to live in one of the units for the next 3-4 years about 3 hrs away from my home. This is because I am already renting a room here and my wife is coming to do an internship. My thinking is that the rents on the other units will help pay for my second home, and I will be able to finance it as such instead of an investment property. I want to keep what cash I have on hand for this purpose.

One other consideration would be that when my wife gets done with her internship our intention is to open a women's sanctuary on the property we live at. At that point we will be building a dormitory and need to refi then. This however is contingent on us getting the neighborhood rezoned commercial. (Highly unlikely but we are going to give it our best.) We have many hurtles in the next few years. If this does not happen we will be moving to somewhere that we can make it work.

I need to add that I am a new investor with an extremely nervous wife. I need to take caution in my decisions for her sake.

Also I need to consider that I have two kids getting married within the next six months.

I realize this is a lot to consider but there it is. I hope that I haven't missed anything.

Thank you.
Jesse