All Forum Posts by: Jim Owens

I live in Las Vegas and I am new to investing. My strategy was to buy properties that rent with positive cashflow. Appreciation is a plus but as long as the properties rent consistently if the market goes up or down I should be ok. 

I've been thinking of going the fourplex route because of the higher cashflow and multiple units under one roof. My concern here is most fourplexs in Las Vegas are not in the greatest neighborhood.  I'm worried they might not be the best tenants and expenses and vacancies will be higher because of this. 

I've stayed away from SFR because the average house is 300-350k and they dont bring in close to the same rents as a similar prices fourplex.

I've pondered the condo route too because they are cheap and it looks like the rents to purchase price are closer to the multifamily units. The HOA eats up a huge chunk of the cashflow on these but the hoa also covers a lot of the typical expense.

What do you find is working best for you? What's typical ccr for your strategy?

I'm looking for a lender in Las Vegas, Nevada who will lend to a new LLC. I would like to establish an LLC for a multifamily property for a buy and hold rental. I would like to put down 20% and obtain an 80% ltv.

My current broker can do 75% ltv but its conventional and cant do LLC.

If this is doable I would like to scale it. Ultimately after I do a deal with my own money down I would like to find private money partners to front the down payment for a straight 6-8% interest rate. I know some lenders require skin in the game but is there a way around this if 20% down is made from a private source?

Exit strategy would be to hold these properties for at least 5 years and then refi to pay the private investors money back. If refi cant be done then the backup exit strategy would be to sell.

Has anyone been able to do this strategy successfully?

Thanks

Jim

I've been trying to figure this out too. What if the "investor" you find puts the whole 120k down and you secure the loan. You give the investor 6-8% return on their money only with no equity split? You do all of the work and only need them as a money partner. This was kind of the structure I was thinking of doing. I was thinking of having their 20% secured by the property in a 2nd note but I don't think most lenders would allow this. Would this be structured as a LP where the investor is the limited partner and you are the general partner? Or would it be better to do an LLC?

@Louis Davis. That's good news that you are in Las Vegas doing that many deals. I'm trying to break into real estate investing with  sfr flips and buying multifamily rentals. Its definately been difficult to find deals to purchase. What type of purchase values are you getting? For example if the arv is 300k are you getting for 210k including rehab costs? What's the minimum profit you try to get on each deal? Is it a number or percentage usually? Are you involved in any of the local rei clubs or groups? 

Thanks

Jim

@Alexander where is your Sunday meetup held? Is an invitation needed? I'm a new investor in Las Vegas also and have been looking to find other investors to talk with as well. 

@Andrey did you get this figured out?

@Levi I know this is an old post but it's relevant to what I'm trying to do. I'm not 100% clear on this structure. Are you saying to borrow the whole purchase amount from investors to purchase the property or do I get a loan and use investors money for the down payment? I've had a hard time finding banks/lenders that will allow this. Also, you stated in this article "if your cash on cash return was 16%"  does this imply I would put up the down payment and borrow the rest from investors?  Just not clear how to go about structuring these types of deals. Thanks

Mathew

Did you get it figured out? I'm trying to get started too. I am refinancing my principal house right now to put down 25% on a fourplex that cashflows. My problem is once I do this I'm tapped out for a while. How are people getting more and more properties? I don't think many lenders are taking an 80% 1st and allowing a seller carry of 10 or 20%. I've also tried to explore the possibility of raising capital for the down payment and I carry the mortgage on my credit. People have talked about JV or syndication and I'm not sure if this is along the same lines?

Do you know of anyway to finance a property with "investors/friends" giving the money for down payment and I carry the mortgage? I dont think I can buy the property in LLC because it doesnt have established credit yet but is there a way to create an llc with me and my investor, buy the property in my name, and then transfer it to llc?

Thanks

Jim

@Taylor 

Thanks for the info. That is a great idea to talk yourself out of a deal instead of in to a deal. 

I only lumped taxes and other expense to simplify the post but I understand I'd separated one might be able to optimize and possibly see where to have savings. 

Rents used  are 525 per unit. The going rents in the area are between 550-600 so there is definately room to increase.  Even on the high side the rent would only be about 2400. 

Yes it's been on MLS for a while and maybe its still there because the deal isn't that great. I was thinking of writing a lower offer or creative offer to see what the seller says. The worst they can say is no.

Hello

I have been doing lots of research into real estate investing and I believe buying and holding duplex/fourplexes is the best option for me at this time.

Most of the deals I have been looking at are similar to this example below:

$288,000 Purchase price

$74,880 Down payment ($57,600 -20% down payment+ $17280 closing costs 6%)

$230,400 Mortgage @ 5%

$2100 rental income

-$1236 (Principal and interest)

-$500 (Taxes, Insurance, utilities, vacancy)

$364 left over each month

Assuming everything goes right and there are no issues (yeah right)

If I put down the $75k cash out my pocket that would be less than 6% cash on cash return.

If I borrow the 75k down and split with my investor 50/50 it would be a greater return on my basically 0 out of pocket but a terrible return for the investor.

Is this just a bad deal or is there a better way to structure it? I truly want to scale my real estate investing business by using investors for down payment source because I would run out of money after a deal or two and I want to keep reserves if anything was to happen.

To me this rent seems very low also. I would like it to be closer to 1% of the purchase price which would be $2800 a month instead of $2100. I’m sure this could gradually be raised but would take some time.