All Forum Posts by: Joel Geisel

Investment Info:

Townhouse buy & hold investment.

Purchase price: $217,500
Cash invested: $68,000

2 bed / 2 bath
Turnkey rental
Great location

What made you interested in investing in this type of deal?

Similar to others in my portfolio and in same location

How did you find this deal and how did you negotiate it?

on market

How did you finance this deal?

30 yr loan

How did you add value to the deal?

Changed toilets and painted, new carpet

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Joe Mack

It all depends how long you want to hold the property and if you have others to subsidize the larger monthly payment in case of needed repairs. 

30 year if you plan to buy and hold - this gives you the maximum amount of cash flow and provides more liquid money to further invest in others. 

15 year if you plan to turn it quicker AND you have other properties that cash flow. 

The 30 year mortgage CF for one year will yield $3,024 more than the 15 year option - that over the 15 year term is a lot of extra cash you can further invest if that is your goal. Personally, I buy and hold, use my CF to buy more and let my tenants pay the equity - as long as it is cash flowing in a 30 year, it doesn't matter what the interest rate is. 

Thank you for all of your replies. 

To follow up, I did a lot of pre-screening (over the phone and email) prior to doing an open house last Saturday. I ended up having 5 applicants, all of which are reasonable and I would rent to any of the 5. My primary reason for increasing the rent on my listing was to fend off as many people as possible to save me time. Most everyone requested to have a personal showing which would require a full time job for me. I learned that increasing the rent $$$ on my listing does not reduce the number of inquiries. My next round I have experience of which credentials I need to show in the listing which will help reduce traffic and narrow in on the best applicants for the property. 

I recently bought a townhome in a suburb of Minneapolis - 2Bed/2Bath. The going rate in the marketplace is about $1,600/month for rent. Once I listed this property for rent I received 50+ inquiries. To reduce the volume of inquiries before my first open house I raised the monthly rent to $1,700/month. Traffic did not slow down!; however, I started to receive inquiries about whether I would accept Section 8. 

The Section 8 requests did not come until I moved the rent higher to $1,700/month and more expensive! Is this a coincidence or is there something I don't know?