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All Forum Posts by: John Finch

John Finch has started 4 posts and replied 13 times.

Post: Quest for early retirement

John FinchPosted
  • Rental Property Investor
  • Houston, TX
  • Posts 13
  • Votes 8

Love that you're tracking your progress. Keep it coming, and thanks for sharing!

Post: Moving to Austin TX from NYC

John FinchPosted
  • Rental Property Investor
  • Houston, TX
  • Posts 13
  • Votes 8

Congrats to your wife on the job offer!

This may not be of any interest to you at all, but I'll offer the information at least. You mentioned you're wanting to stay investing in Austin's city limits, and I wish you the best of luck with that! I will mention, however, if you're comfortable with investing a little farther away, there are 3 major universities within 2 hours of Austin. Those are UT Austin, A&M (and Blinn) in College Station, and Baylor University in Waco.

A lot of people have no interest in investing in college towns, since there's quick turn around with tenants and some of them can be...destructive. Both great reasons to stay away. That being said, from my time living in Waco, I rarely saw duplexes, triplexes etc empty. College students eager to ditch the dorm tend to swarm to these.

Example: I know someone renting out duplex in Waco near Baylor University - Each unit is a 4 bed, 2 bath and he's charging $1650 per unit, which is actually really low rent in the area (typical rent per room in the area is ~$550+). So that's $3300 a month in rent for the duplex (which cost him ~$215k), and he's never had vacancies because that's a super competitive rate around Baylor. Unfortunately I don't have an estimate on his monthly expenses, so I can't convert this to cash flow.

It peaked my interest. I intend to invest in these college towns some day just because there are so many renters in the market, but again it's not for everybody. Just wanted to throw out the idea since you're not too too far from those towns.

Post: What are some potential ways to finance this first deal?

John FinchPosted
  • Rental Property Investor
  • Houston, TX
  • Posts 13
  • Votes 8

All 3 of the above replies make really good points. I think the key is making sure your cash-flow is going to work out. You're going to get different interest rates, or have different terms of the loan depending on what entity/person you get the money from. It's possible that the interest rate in this scenario could make or break the deal. That being said, I second Bob's comment. You should should be able to finance the property with the 40k you have as a down payment.

I know you mentioned it's a friend you're buying it from, and you're not wanting to screw her out of money. Of course you don't want to do that, but the numbers do have to work. One thing to keep in mind is that you're providing a solution to her - which is that you can move fast on this and get the property off her hands, and that's worth something. Keep that in mind when deciding what to pay for the house. As the other replies have pointed out, the purchase price is a very big factor in whether or not this deal is worth it. "You make your money on the buy side".