All Forum Posts by: John Armando

@Paul Timmins when is the next Rockland meeting?

@Anthony Angotti Thanks for the input Anthony, pretty much along the lines of what I imagined. Yes, we are considering some more distressed properties, and are in a good position to wait out a short sale (we are in no rush to owner occupy the residence). We've been primarily looking through MLS or some off-market through the help of real-estate agents in our network. But I agree, we need to do some more networking or direct marketing to locate better off-market deals, something we need to devote more time too.

But yes we are keeping this property for cash flow in the 25-30+ time frame. 

I'll keep searching and hopefully will make a deal come our way. Its an active process, so will take some hard work. 

Hello BP team, 

I've been looking at multi-family units in my area for quite a while, and feel I am on the cusp of making a deal, but am having trouble finding the right house. Which is fine, no reason to jump into a bad deal just to get started. But I was hoping for some guidance on my evaluations. 

I am looking at low down payment owner-occupied options through a portfolio lender at 5% with PMI, that will go away once reaching 80% LTV (so will get some extra cashflow after approximately year 7).

In my analysis I account for Expenses including (common utilities, taxes, property management (10%), Long term maintenance (10%), short term maintance/repairs 95), legal, misc, vacancy (7%) etc, etc.) This amounts to roughly 55% for most of the properties I analyze, so I am comfortable with those assumptions. 

Breaking out my cashflow by year, I assume a 3% rental increase per annum, a 3% expenses increase per annum, and appreciation of 1.5% (the area I am looking to invest is a slow up-and comer but still has some very rough areas, but I know the area well). 

For most properties I don't see positive cash flow until approximately year 3, some COCR better than other properties at this point. Is this acceptable in your viewpoints for a long term buy and hold, where at years 7 and 8 a >20% COCR is achieved?

And I know it is not good practice to not account for property management in the expenses, but at the outset (early years of ownership for our first few properties) should I discount expenses based upon performing our own property management to add the 10% property management to our cashflow?

Any guidance or rules of thumb would be greatly appreciated

@Molly Armando

@Tom Mole great information Tom, thanks for the thorough details. 

Hello, I have a general Short Sale question. I am in the market for multi-family properties in my investment area and looking to get my start in real estate investing. 

I've located a short sale property that is a 3 family, currently 2/3 occupied, and fully rented would cashflow $300/month, so I know it would be a great cash-flowing property. (I am confident in my numbers, accounting for property management, long-term and short term maintenance, 8% vacancy, etc. etc. for a total expense of 55% of gross income, and and expenses + income growth of 3% per annum). 

I've located the current owner contact information, the listing agent, as well as the mortgagor, and at this point I'm wondering what my next steps should be. Contact both the current owner and mortgagor citing my interest in the property and present an offer? Reaching out to the listing agent? Building a documentation package? 

Any guidance would be great help, I've been scouring the forums and blogs to find more information but would love to get in contact with someone well versed in short-sales. 

@Molly Armando

@Dustin Costa @Andrew Spencer @Chris Cyr @Mike Buckley @Molly Armando

Hi guys, 

Great to see some investors having success in the NB/Fall River area. I grew up in Dartmouth right nex tdoor to NB, but my Fiancee and I currently live just outside of Boston. We are just getting started in Real Estate investment and have been building our base of knowledge over the last year with as many resources as possible through BP, books, networking etc. We are about ready to purchase a multi-family in NB and have been scouring listings for potential deals that will cash-fow. 

It would be great to connect with other investors in the area. Is there a particular REIA you typically attend? I've heard the one in Plymouth is great.

Looking forward to keeping in touch,

John 

@Brent Coombs @Joe Villeneuve 

So what I can gather from both of you is that the most successful way to apply the BRRRR is to use OPM for the purchase, ReFi, take the cash to pay off the borrowed OPM, and use the remainder to continue purchasing additional income properties.

I think for my first deal we are going to be looking at utilizing the low down Owner-occupancy route to find a cash-flowing 2-3 family, which we currently have plenty of cash for the DP. But i'd like to continually learn about the BRRRR strategy while I build our local network of investors. I think with no track record it would be a challenge to find lenders. Despite this, I am very confident in my analysis and numbers (I'm an engineer by training and enjoy the numbers aspect of real estate investing), so I could leverage my analysis as a means to convince lenders despite not having a track record of deals.

Thanks again

@Kendra Shaver 

Hi Kendra, welcome to BP! You will find an unbelievable wealth of knowledge here through the blogs, forums, and podcasts. I'm just beginning my real-estate investment career (part-time I work full-time for a local Biotech company), and am getting closer and closer to my first deal as my Fiancee and I learn more about what opportunities we have and what opportunities fit our goals. We are very interested in multi-family properties in the SouthCoast/New Bedford Area, as owner-occupancy. Our goals are to build up a passive-income rental property portfolio supported by capital growth through single-family flips (3/1 or 3/2 size properties). 

Wish you the best of luck!

@Brent Coombs @Joe Villeneuve @David Krulac

Thanks for the info guys. As an investor starting out I'm still building my network of private money lenders/partners. I do have a bit of cash I can bring to the table which should help in partnerships, but not quite enough to be bringing all cash to the table, nor do I want to bring all cash to completely drain my capital. I like the BRRRR strategy for being able to keep properties for passive income, while being able to re-use my invested capital for future purchases, I just wanted to make sure I had options available that were not all cash purchases.

Thanks again!

@Jeremiah B. @Devin Cohan

I see the cash-out refi as a way to pull out your money and begin to build a portfolio without waiting fpr identifying other sources of money (saving, partnering, etc.) It can be scalable as equity is built in your houses, and essentially allows you to recycle your downpayments. But, it is important to ensure you cashflow post re-financing.