All Forum Posts by: Jon Kelly

@Robert S. IRR of 20% and Cash-on-cash of 1,000%+ looks good to me! Definitely add 5-10% for Capex depending on the year the property was purchased. I would consider adding a property management fee (8-10%) even though you are self-managing. If an additional 8-10% turns this solid deal into an ugly one, maybe it's not the best one. Even though you won't pay yourself to manage, it's still important to track how much you are saving from self-managing.

@Maimouna Sow, always shop around for repairs above a certain threshold (e.g. $2,000-5,000) and trust your instincts! If you feel something is off, it most likely is. Glad you had this situation resolved! 

@HX Yuan consider looking into the Lehigh Valley (Bethlehem, Allentown, Easton). It's ~1.5 hr drive from NYC. It's received a lot of attention from New York investors over the past several years 

@Mckenzy D. You can request a 2nd appraisal from a different appraiser. Before doing that, you may want to consider going with a different lender. The "package" @Evan Polaski referred to is critical because it supports your estimated property value. Make sure you show current rent roll for the 2-units and market rent for the owner-occupied unit. Also, increase your estimated property value you send to the new lender from $550K to $600K, as long as you can find comps or income driven approach to support it. Even if your new appraisal comes in low, they likely wouldn't be off by $85K ($600K vs $515K). Good luck! 

@Thomas W. Of course it's possible, you just need 100 turn-key units cash flowing at $200/month. Assuming the purchase price per unit is $100,000, total value will be $10,000,000. You'll need 25% down or $2,500,000. Then, just sit back and enjoy the $20,000/month in cash flow! 

It seems this thread was hijacked and turned into a completely different conversation. But, I recently looked into Robert Kiyosaki's "The Lazy Way to Invest in Real Estate," and I love the title. I think it draws interest from people looking to start in real estate but think it's too hard, similarly to how the "5 minute abs" makes you interested in trying to earn a 6-pack. The bottom line is that if you want to be successful it will take hard work. There are no short cuts

@Nick Love what's great about real estate investing is that you can be successful whether you are a morning bird or night owl 

@Nicholas Preston It's OK to make an offer without seeing all units, but before you buy, make sure to walk in each one. There's a reason the landlord chose to show you those particular two units. Not saying the other 12 are in bad shape, but he likely chose to show best ones... 

I made an offer on a 4-unit building after seeing 3 of the units. The seller didn't want to show me the 4th because the tenant was moving out and didn't want to "disturb the tenant." The day of closing, I did my final walk-through of all 4 units and low and behold the 4th unit was in terrible shape. The bathroom needed ~$6k in repairs, along with several other things. I factored some repairs into the price, but not as much as what was needed. Learn from my mistake and always do your proper due diligence! 

@Benson Gee Someone with a strong track record, experience and communication skills with the landlord and the tenant(s). Make sure they have experience with evicting tenants and are well versed in the state and local laws. My favorite property manager has an electronic portal that I can login to at any point to see when and how much rent was collected, and they attach invoices, receipts and pictures for any repairs that are completed each month. Make sure you ask for recommendations in your area! 

@Benson Gee don't be afraid to overpay for a good property manager, especially for out of state. Trying to save 1-2% in fees while using a "bad" property manager could end up creating more headaches than it's worth