All Forum Posts by: Jesse Waters

Thanks @Brandon Hall

 That does help.  I think I got focused on the furnished numbers, but I think any advantage will be eaten up by utilities.  I hadn't gotten an insurance quote yet, but I would imagine that would be much steeper.  I have been having reservations about this property, but had gotten stuck between facts, figures & emotions.

I am looking at a 100 year old duplex that is in pretty good shape with a good location.

The building has lots of updates, hardy plank siding, new roof, split utilities, updated kitchens & baths, all appliances included etc.  It is listed for $110k very motivated seller and each unit is rented for $925 furnished with utilities.  Each unit could rent for $600 unfurnished with no utilities.  The history & numbers are solid.

My question is: What am I missing?  I feel like I have missed something with the age of the property, but it doesn't seem that bad.  Anyone with experience with older properties, advise?

If I am not missing anything it seems like a solid deal for my area, especially since I should be able to pick it up for a good bit less than its list.

If we know that a unit is coming up for rent we try to start advertising about a month prior to the vacancy date, especially if we are certain of the condition of the unit.  However, as a matter of practice, we don't advertise until we have actually closed on the property.  If I can't show it then I don't want to list it.  I have also had delays in closing that would have brought a considerable amount of embarrassment if I was holding out promises for potential tenants.

However, if there is a vacancy, then as soon as I close I post the listing & put a sign in front of the property.

Agreed, BP has definitely made me a better investor.  I have gained tons of knowledge that would have taken years to gain on my own and possibly would have been too expensive to gain on my own, missteps can be expensive.

I would say that I could have been one of the many potential "idiot" investors.  Thanks BP.

Only vaguely familiar with the Indy market, I have in-laws in the area.  In general I prefer multi's.  I get more units and better returns with easier management by having everything in one place.

@Katherine Aguilarwelcome to BP. Don't know any in NOVA, I have found the podcast & forum do a pretty good job of being a virtual mentor & I have learned a ton from the contacts that I have made on here & in my day to day REI.

@Tim Crumleywelcome to BP.  Great to see others on here from SC.

So, for me, passive income is always to goal.  When I leave a closing I like to make money right out of the gate.  I want the property to cash flow immediately, that is a pretty realistic goal when I purchase an apartment building with tenants already in place.

In REI there is no "right way" or secret formula for success. Lots of folks started out wholesaling or doing rehabs to generate cash for down payments on rentals. And with your background in construction, rehabs might be a good way for you to get going.

The only wrong way to invest is to keep doing deals that you loose money on.

When I started out I was ready to take on the world, quit my job & live on easy street....  Then the realities that you mentioned hit me.  If I want $X/year, then I need Y properties cash flowing with an average of Z.... and I got discouraged.

This is not a get rich overnight deal, it is for the long term.  As you get going, you will develop your own strategy, make contacts & accelerate your investing.

We started with single family properties and moved to multi... should have started with multi, but that is hindsight.  

I am getting to a point in my investing where, with out really doing anything, cash flow has increased from where we started.  My escrow payments have gone down slightly, we have found a few expenses to scale back on and rents have gone up.  We are also able to start consider doing things like cash out re-fi's to use a down payments of future properties & are starting to realize returns from side investments that we have made, like tax liens, and will roll those into future down payments.

Sorry for the long reply, but I hope that helps.  Feel free to PM me if I can be of further help.

@Kevin F.has hit the nail on the head.  I do most of my investing with a partner or two, but I'll spare you the details on why I do.  In this case, you are basically talking about house hacking- buying something to live in & renting out the other side.  I'm not a mortgage pro, but, since you will be an owner occupant you should be able to qualify for a lower down payment.  If I were you, I would buy the property your self and rent your friend the other side.  I don't think that I would want to live next door to my business partner if things got bad.  You may also want to consider going after a larger property, perhaps a 4 plex.

If you want to partner up with this friend, I would suggest a property that you don't live in.  I would also check with an account to see if there are any rules covering a property purchased for business that you & a business partner both live in.  

Best of luck.

Here's my 2 cents worth. I really like DR, he has good advice for the average consumer. But, I think that most of us on BP aren't average. Personal/consumer debt is bad, every dollar you pay in interest is a dollar that you can't invest. Every dollar you leverage in REI is a multiplier.

That being said, to me debt is like dynamite...  It can move mountains or blow you to bits in an instant.  So, before you assume any debt, lets assume good debt for investing.  You should always make sure that even with the most conservative estimates that the numbers work out.

I try to follow DR for my personal finances, pay off the high interest stuff, don't buy what you don't need, live with in your means etc.  But, for investing, I take a modified Kiyosaki approach, use OPM, leverage, but I want to make sure it is a sound investment, and as has been pointed out here, I don't believe that I will reach my goals by purchasing all my properties out right in cash, too many advantages not to.

@Chris Duzan

 Sorry, a little late to this party, but I invest in the Columbia market, so.  Don't get discouraged.  There are good deals to be had in the metro area.  I have a few quads in West Columbia and they are pretty solid performers.  The hard part about Columbia can be the taxes.  I have looked at some properties that would be great deals but the taxes ate up most of the cash flow potential.  But, its all in how you structure your deal.  

One solid source of leads that I have gotten has been from my property manager. She will let me know when she has another owner who is looking to retire or sell off some properties. I would suggest getting in good with a property manager or head to the REIA meetings and make some contacts. A guy that I partner with has said lots of good things about the Columbia group.

Best of Luck.  PM me if I can be of any assistance.