All Forum Posts by: Joel Bowen

 Hi Luke, I was curious if you had any updates since you have owned the property for a bit on what your insights in the area are? Thanks,

 Thanks John. It seems like everywhere I am reading about has job growth.

Hi guys, I am primarily interested in investing in multifamily units (3 or 4 units). I plan to utilize the FHA loan and live in one of the units for the first year (or longer). I currently live in the Portland, Oregon area so it seems it is one of the worst markets for my buy and hold strategy at the moment. I am willing to relocate anywhere inside the United States because my job permits. I would prefer to say in warmer climates. My question is this: If I wanted to find some of the best markets to invest in multifamily units with a buy and hold strategy, how would I go about starting to research which areas would be the best to start targeting? Thanks,

Thank you for the clear explanation @J Scott. Def buying your book real soon, just waiting for this upcoming Salary :) I have learned tons from you in such little time on bigger pockets. It's so much appreciated!

Hey guys so I have really been studying the last few months. I have really been trying to create my own spreadsheets and make sense of all these numbers. I have a few questions relating to J. Scott's article entitled "Introduction to Real Estate Investing". You can locate the article here if you would like to reference it: http://www.biggerpockets.com/renewsblog/2010/6/30/...

1.So under Cost Assumptions on the top left, the last number under selling costs is 7%. I have tried a gazillion calculations but I am not sure where that number is coming from. Could somebody help me with the math where this number comes from?

2. How can I estimate Annual Revenue Increase, Annual Operating Expense Increase, and Annual Appreciation? I know each area in the market is different, how can I find these figures for my local market?

Thanks,

Thanks @Skyler Smith, that is a great suggestion about the utilities, def something I wouldn't have figured out until it was to late. 

Great suggestions on craigslist. That will def help me with future purchases when I am ready and able.

Again great suggestion on building equity, this concept is new to me so I am going to have to do a lot of research on it. Thanks bro, appreciate the insight so much.

Thanks @Tommy DeSalvo for the help. I look forward to following along and see your progression with mine :)

Ok so I am sitting after just finishing up a podcast with J. Scott where he talks about setting goals and getting them on paper. He says that it doesn’t have to be formal but just jotted down for my own reasons. He says that after you write down your goals there will be parts missing that will help you fill in the gaps of the knowledge you need to learn. I will try to write down my notes and if I am forgetting something that is pivotal please let me know.

Housing Strategy

Main goal – Buy and hold Multi Family 4 plex with in 1 year from May 15th

Purchase a second 4 plex with in the 3rd year

Purchase a 3rd 4 plex in the 3rd year.

If I am able to get $100 cash flow from each door I can have passive income of $1200.

I plan to purchase the 1st house with an FHA loan where I will owner occupy it for the 1st year. If there are additional rooms in the unit I am staying I will rent those for additional revenue.

The second/third house will be yet to be determined on how I can finance them. Possibly a 1031 if I do a good job on the 1st multifamily unit.

Each unit I will use the 50% rule along with crunching numbers on the Bigger Pockets calculator to ensure that I will have at least a true cash flow of $100/door, to make sure that my numbers work. No purchases will be made emotionally. I plan to post the calculations before my first purchase to get investors approval (at least until I get the hang of it after my first purchase).

I will also have at least 6 months expenses saved up for each unit as a backup before purchase.

Where to find Properties

My mom has a Real Estate License so I will be looking to her to help me view the MLS. Craigslist will be a possibility but as I understand not the best place to look. I will start in these places and expand if I am finding it hard to find the perfect property for my first owner occupied.

Renting the units

Tenants will be thoroughly screened through a number of methods I found on bigger pockets to minimalize bad tenants.

Marketing for tenants will include places like craigslist, A big sign that says “For Rent”, and postlets? Zillow and hotpads

Applications with consist of a fee. Tenants will be prescreened over the phone. Then I will give tenants the address so they can check out the property. If they like it I can set up an appointment to show them the inside. A deposit equal to one month’s rent along with rent and the lease agreement signed will be due before tenant is handed keys.

Exit strategy

As of now my goal is to buy and hold rental property for retirement. I don’t currently have an exit plan. I do understand how important it is to have an exit plan because I have another business I opened that I neglected having an exit plan (mostly out of ignorance) but it has cost me a lot of time and headache because a plan was not in place.

I guess for an exit strategy I am a little baffled how it should look. If you are interested in having rental properties to hold long term for retirement what would be some factors that would possibly sway my original plan and how would other exit strategies work for this type of investing.

Final Thoughts

If you have any suggestions on how to go about structuring a better system please let me know. I know that I am missing a ton of stuff, I hope someone can help point out the missing areas so that I can go and research them and learn as much as I can about those areas. 

Thanks in advance everyone.

Thanks @Wayne Brooks! very helpful

Sorry if this question has been answered before. I tried to look around for information regarding this but didn't find anything to helpful. So a long time ago when I first kind of heard about purchasing foreclosures I was under the impression that you had to pay for them in cash (I think I had this drilled into my head from when I was young or something). After a bit more research that doesn't seem to be the case.

I was curious, is it possible to purchase a foreclosure from the bank with an FHA loan (3.5% down)?

Also, how do banks price foreclosures? Do they just sell them for what the defaulting party owed on it? Do they mark them up from that price or down?

If a bank is asking X amount of money for a foreclosure that let’s just say it doesn't need any work for simplicity, at what % discount should I be looking for offer/get. The reason I am asking is I see many foreclosures that seem to be way under market value, how do I know what a bank is willing to let it go for?

Thanks guys,

I recently just read J. Scott's "Introduction to Real Estate Investment Deal Analysis"( http://www.biggerpockets.com/renewsblog/2010/06/30...)

and Wow what a great article that is. I learned so much! I am fairly new to Real Estate Investing so I have never done any deals before. At this point I am still trying to figure out what my actual goals are, ie which niche is going to work best for me. I think I will be looking into long term holds such as 2-4 plexes to start. 

In the article by J. Scott he stresses the importance of making sure you get to see the Actual data after the initial Pro-Forma. I tried to look around the net for an example but I couldn't really find anything worth while. I was curious if someone could post a good example of what a Pro-Forma in the actual world would look like so I am familiar with one before I actually go out into the real life market. Obviously if there is any sensitive information remember to black that out.

Thanks in advance,