All Forum Posts by: Justin Ruholl

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $260,000
Cash invested: $22,925
Sale price: $260,000

FHA 5% House Hack
6.75% Interest
$13,000 Down
Bought with investor/friend, will be living in 1 unit together, renovating them, and hopefully repeating that process within the first year to keep remodeling units with no vacancy cost.
Will be paying $52.50/mo for rent (Not including utilities), for the first year and then making $158/mo each (16.55% Cash On Cash Return) Year 2.

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

Usually use investors, wanted to park some of my own cash into real estate instead of stocks.

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

For sale by owner on facebook marketplace. Got it for 10,0000 less than asking.

How did you finance this deal?

FHA LOAN.
5% down.
Partnered 50/50 with friend/investor.

How did you add value to the deal?

Will be moving into 1 unit, and renovating each unit. $10k each into 2 of the units.

What was the outcome?

About to close.

Lessons learned? Challenges?

Getting the right lender is Important.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $200,000
Cash invested: $60,000

Seller Financed Duplex
200,000 PP
3% Interest
20% down
16,000 Renovations
$673/mo Cashflow (13.47% Coc Return)

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

Interest rates have been the most challenging thing for me, I have been wanting to get a seller financed deal for a long time now,.

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

Found it by calling the owner for 3 years, negotiated through seller finance.

How did you finance this deal?

Seller Financed.
2 investors at 30k each.
33 and 1/3rd split.

How did you add value to the deal?

Will be adding 16k of renovations to unfinished side. New flooring, appliances, ect.

What was the outcome?

Still under Contract.

Lessons learned? Challenges?

Consistently calling is the most important.

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

I am a real estate agent myself, which helped the contract process.

Three years ago, at the age of 18, I partnered with my parents on our first single-family rental. I found this property on the MLS, after falling out of contract last minute due to buyers financials. My parents took out a HELOC loan on their house, and I managed the property with a 50/50 profit split. Our first tenant stayed for 2 years and 8 months, and we've just recently moved in a new couple. We plan to remove the carpet next year and install LVF to increase property's value and potentially bump the rent. I wanted to share the financials after 3 years, and demonstrate what three years of real estate investing can achiev

3 Bed/1 Ba Single Family Pro-Forma:

Year 1 (2021)

Income:

Rent: $1,200.00

Expenses:

Mortgage: $509.95

Taxes: $119.10

Insurance: $43.84

Cap Ex: $60

Repairs/Maintenance: $60

Vacancy: $60

Monthly Cashflow:

$347.11/mo or $4,165.32/yr

Year 3 (2024)

Income:

Rent: $1,300.00

Additional Pet Rent: $75

Expenses:

Mortgage: $509.95

Taxes: $155.43

Insurance: $53.03

Cap Ex: $68.75

Repairs/Maintenance: $68.75

Vacancy: $58.75

Monthly Cashflow:

$450/mo or $5,400/yr (Total/Not 50/50 %)

Total Equity: $37,473.88

-Principal Equity: $7,959.62

I have learned a lot about the systems needed in place to run a rental property, and how important picking the right tenant is.  I am going to purchase a 2-4 unit property to house hack, or seller finance up to 10 units (Depending on which financing works best) by the end of this year.  I have put better systems in place after reading  Brandon Turners book on managing rental property's, which has given me the confidence to dive into multifamily.  My strategy will be off market owner calling for meetings, and building relationships with as many owners in my market as I can. 

Hello. My friend and I are thinking about buying an duplex using an FHA loan or a FHA 203(K) loan. He has 10,000 dollars that he wants to invest, and he's decided to partner with me. We are going to open a joint account and put the 10,000 dollars in there, and I am going to live in the duplex so we can qualify for the loan(This is my second investment property, I'm only 18 years old).

Property Details:

Built: 1900

1st unit- newely redone 1 bed/1 bath (one story), currently has a tenant living in it for 750 dollars/month.

2nd unit- 1 bed/1 bath ( two story) walls are finished and painted, still needs flooring, cabinets installed, bathroom finished, closet finished. 

Cap Ex: Roof needs redone, and electrical and wiring has newly been done.  

FINANCIALS:

Asking price: 120,000

Down-payment- 4,200(3.5%)

Closing Costs- 2,400(.02%)

(Pre-Stabilization) 1st Year/When I'm living in one unit.

Rent: $750/month

Expenses(Monthly): 

Mortgage:$553

Taxes:$65

Insurance:$130

Total Cashflow:$2/month

Stabilized Report(After I've moved out, and both sides are rented.

Rent:$1500/month

Expenses:

Mortgage:$553

Taxes:$65

Insurance:$130

Cap Ex:$150(10%)

Repairs:$150(10%)

Vacancy:$75(5%)

Cashflow:$377/month

COC ROI: 68.57%

Cap Rate:9.30%

Question: Is this a good investment?

Question: If roof needs replaced, should I use a FHA 203(K) Loan to wrap that cost into it?

Notes: Most of the things that need finished in the second unit, are already supplied in the unit, they just need installed.

I have gotten into real estate just recently with my parents. We bought a single family home and split the profits 50/50. I always see that investors want an ROI of 12% or 100 dollars a month per unit(such as brandon turner and ken mcelroy.) I was wondering if they want 12% ROI or 100 dollars/month per unit for them or for them and their investors to split 50/50?

We are currently looking at a fourplex for 240,000. I am wondering if I should try and get 400 dollars/month for myself personally(10%ROI) and 400 dollars/month for my parents to, or 400 dollars/month for my parents and I to split into 200 dollars/month(5% return)

Thanks for any help!

My parents and I just partnered on our first single family home which is bringing in about 580$ in cash flow total.  Sounds like a lot but we combined our mortgage and ended up getting more rent total then we expected.  

My question is, for my next investment I was going to try and get a duplex. Would you recommend me to get an FHA loan and live in one side so I can get the highest ROI I can get, or pair up with my parents again, and just put 20% down and have 2 tenants in there right away instead of after a year?

Side note: There is a duplex straight across the street from my current rental(off market, older couple who wants to move, one side hasn’t been rented for 2 years) 

Also:  Brandon turner always says he looks for 200 cashflow/per unit.  Does that mean he wants to make 200 cashflow per unit himself or 200 cashflow total for him and his investors to split into 100 each?

Thanks ken, my real estate agent is also a property manager and he is helping me with the screening process and giving me tips on how to manage property’s.  My dad used to own a construction company so we will repair the roof ourselves in about 2-3 years!

Thank you very much!

Just finished reading it! I agree with you on everything. My mom added me on her credit card a while ago to make my credit score increase. I am already planning on doing an FHA loan next year and have my sister put the loan under her name(she wants to move out) and we would do a 50/50 partnership deal. I would manage everything and make sure the numbers work while she would provide the down payment and live there for free.