All Forum Posts by: Jo Ballagh

Great information, guys! I like the idea of an umbrella LLC and a separate for each property for liability protection. This was sort of what I was thinking so it's good to hear that for some, this isn't a waste. I've had people tell me it's too much to manage but this sue happy society we are in makes me want to set up all the barriers I can!

Jo

Thanks, gentlemen! The inspection went just about as bad as it could have gone. Structural damage, bad roof, bad boiler, bad drainage. I still pushed through trying to get the seller to fix everything and while they agreed to most, they didn't agree to the roof. I'm mostly nervous about the structural damage and am terminating the contact. 

Really appreciate your input and support!

Jo

Hi Everyone! Apparently I can't find my own forum postings using my cell phone (or I just haven't figured it out). Finally on a real computer and can read these. 

Thank you so much for your time and responses! UPDATE: I agree with those who immediately saw a "bad deal" and will be terminating this as soon as I receive a structural engineer report and roof estimate (I've gone this far and want to know as much as possible before walking away)

@scottsewell Sorry the picture didn't show... I'll add it again at the end of this post. It may be a formatting things (just a 'snip it' of the spreadsheet from my computer). I've been to REX meetings in the past and would love to start going again! Is it still at the PCA? Which days do they meet?

@scottengland I didn't do a full repair analysis as beyond the "major issues" I would have to do initially, most of the repairs would be generic upgrades (save one unit's bathroom-bleh!). The ARV rents are very comparable to the market of upgraded rentals in Anchorage and I can almost guarantee that those would be easy prices to get at the time I chose to move on the next property

@connordunham Won't be hiring a property manager at this point in my investing career. I know it's an incredible hassle but capital is more important to me than my time and stress (I'm expecting in 5 years or less, however, to be whistling a different tune). I really like your suggestion to look at each unit in sq ft value! It makes total sense. I'll run numbers on my own place that way and see how it fairs. For rental increases, I was expecting to move into each unit after a vacancy and re-vamp it, staying in until a tenant rented it for the new price. Currently, the rents for this property are adequate considering the appearance of each unit. 

@kathyargento I heard that about FHA. Thank you for the confirmation!

@thomasb I do have estimates for the roof and boiler and when the sellers didn't agree to pay for the roof, I knew I would need to back out. I can't go into a place automatically spending $10k-$15k (Alaska is pricey). And I think your estimate for vacancy is a bit high (Anchorage has a very low vacancy rate overall which is why I am buying my property here rather than in the States) but I DO want to err on the side of caution with the higher estimated rate

@jamescash I was wondering how the comps for mulitunit rents compared to this. Thanks for the input! For this property, all of those expenses were given to me by the seller so lawn maintenance is included. And each unit has it's own W/D...I'm not sure I'll be able to find a place where my expenses towards it would only be $800/mo with and FHA loan. BUT I know you have been in our market for a few years so you have that knowledge.

Thanks again!!!

Jo

I need some more advice :)

I currently own my own home but am trying buy a 4 plex with FHA. I thought I was ready to pull the trigger but my offer looks like it may fall through.

Now I'm wondering: Should I move out and establish my home as a rental to give me a better debt:income ratio?

IfI move out, I can cash flow $300/mo. I wouldn't save or spend any more money by moving out but I could eventually count my rental income towards my current income for another offer (which may be quite a ways down the road)

Can any lenders offer some thoughts?

Thanks!

Thank you so much for that inspiration!!

Kudos!

I know it's been posted before but I'm hoping for a few eyes on my personal analysis of a property I'm looking at. A BP Colleague has been graciously dealing with my berating of questions (Thank you, Tyson!) but I was hoping to pose this to the community.

So for this property it looks like it will never cash flow until I move out and even then, it's only $103. I'm in this for the long haul (meaning when it's paid off, I will cash flow $5150) but this just doesn't sound good in any short-term aspect. Plus it needs a new roof and boiler ($$$). It's possible to re-fi to conventional after all repairs/upgrades are done and I move out (I did that with my current home) but I'm not sure when I will have enough equity in the place to do that. 

That mortgage insurance is a b*&^h and with such a low down payment giving me a massive loan amount, I'm starting to wonder if I should reconsider things-still invest but maybe take time to save more down payment-but that could take years of potential growth away. And multi family units are few and far between in Anchorage so when they come on the market, a potential buyer has literally days (sometimes hours) to get an offer in. (side note: "nice" move in ready 4 plexes with little to no elbow grease, in the not scary parts of town are going for up to $750,000 on the low end so for me to get into a decent $500,000 place is a long shot! Hence my mild attachment to this property)

I'm trying not to ramble. I just appreciate feedback from people who understand what I'm trying to do (my family and friends don't even know what ROI, ARV or FHA stand for :-/)

**Along with this calculator I made in excel, I've created a new acronym as I've been going through the process of trying to buy my first multi unit investment property: FTFO (Freaking The F&*k Out). Some of you may wish to use this when your S/O is asking you why you aren't engaged in a conversation and you're not sure how to explain any of this :)

Any experienced help would be SOOOO appreciated!

Jo

Good Morning BiggerPockets World :) (it's still 9am in Alaska)

I have a home inspection today on my hopefully soon-to-be four plex.  I'm hoping to just gather some tips, questions to ask, cautionary items, and maybe just calm my nerves.

My biggest concern is that there is a unit built on top of a carport. The sauna tubes that it was built with have been upheaved due to permafrost (#alaskaproblems) and this has caused significant drywall damage to that unit only (for those who don't have the luxury of knowing what permafrost is here you go: http://www.cchrc.org/permafrost). All other units seem sound. 

I was not present during the inspection for my current home and it was a terrible mistake I wont be making again. Things I think my realtor SHOULD have concerned himself with were brushed off and I am dealing with an enclosed porch that is sinking into the ground due to the same issue. I have a structural engineer coming to the inspection to offer his opinion and am searching for a last minute contractor to view the damage and write me a bid.

What are my rights after the inspection is complete? How likely would a seller be willing to come down in price if I produce a proposal with $15,000 worth of issues? How likely would the seller fix them prior to close? I know that life and health (mold, HVAC, etc) are obviously negotiable but what about structural support?

I could probably go on but I'd like to hear from you guys. Thanks for your time!

Jo

I'm soon to be a landlord for the second time. The first was terrifying as I was leaving the state and trusting my home to a "professional" Property Manager. This time I will be doing it myself. 

I'm wondering if anyone has created an LLC for themselves for receiving rental income. Do you recommend it? Is there any reason not to? Is it easy? How did you set it up? Does it protect you? Any experience advice is greatly appreciated!

Long term, I expect to have many units and I'd like for checks to NOT be written directly to me and I want to keep rental income totally separate from my 9-5 income. I will be creating a separate bank account to have mortgages withdrawn from and rental income deposited to. What else should I be considering?

Thanks in advance!

Steven, 

Thanks! I'm pretty lucky in that I have a hard working lender pushing my numbers pretty tight. A duplex/triplex would have been a walk in the park but I was set on a 4 plex (because I don't want to pay "rent") and it's pretty close. Not using my current house's rental income is tough. At this point, I'm hoping it doesn't fall through right at the end because of my DTI.

I live in Alaska so our rental market is pretty solid (as of this post). NICE multi family homes being sold are pretty scarce and the ones that are on the market are in the "up and coming" (ie: we're trying to clean up our drug/homeless problem) neighborhoods. I found a great place in a decent neighborhood that hasn't been renovated since it was built in the 80s and will be paying near full price for it to keep other offers at bay. 

I'm looking at a purchase price of $519k (pending inspection and appraisal). There's a 3br unit, 2x2br, and one 1br. My mortgage is looking like it'll be about $3400 (because I'm only putting down 3.5%), total current rents (without owner occupancy) come in at $4300/mo and I can cashflow $300 from my current home. 

If I didn't have so much stuff, I'd cram into the 1 br, and enjoy about $600 total cash flow from both properties...and I still may consider that. OR move into the 1br, renovate, rent it for market value (the tenant has been there over 10 years and is a hoarder-the unit is not up to date) and then jump into the 3br next spring. But because I've been living with a roommate in my 990sqft ZZL, I'm pretty set on living in the 3br unit and enjoying the fruits of my labor :-P haha.

What is your market like in Iowa, Steve? 

All, 

I so appreciate your replies. I saw them once but couldn't find them again on the mobile app. You were all correct that I can jump into FHA and i appreciate the non-negativity! I'm currently under contract (after scraping by with a barely acceptable debt:income ratio) on a really great place in my town. Just waiting for the inspection, rental analysis and appraisal! Hoping to close in October/November!