All Forum Posts by: Anthony Gayden

Just a little food for thought. With a 20% down payment, you won't have to pay PMI and your mortgage payments themselves will be much lower as well. If you do decide to rent out the place down the road, this will provide you with a little more rental income every month, or room to offer less expensive rents. This is the strategy I am using on my home purchase.

@Serge S. I see the deals you are talking about down here near Tucson, with single family houses under 10 years old selling for between $60-$100,000 in nicer areas. What I don't see down here though is inexpensive multifamily. In fact, most of the multifamily down here seems overpriced in my opinion, and better deals can be had in the Phoenix area. Keep in mind I am looking at primarily small multifamily (2-4 units). I ended up buying a 4 plex in the Phoenix area because almost nothing I could find down here would show cash flow other than trailer parks.

@Pyrrha Rivers thank you, after my offer was accepted on the 4 plex, all I could think about was growing even more.

@J. Martin I would like to get into buy, fix and hold in the future, but I need to get more resources together first

@Account Closed Thank you.

I have posted a couple of threads, but I realize that I have not properly introduced myself. My name is Tony, and I live in rural Arizona near the southwest border. I became interested in real estate recently due to pay issues in my job, and a strong desire to supplement my income. It was very apparent to me that the real estate market in the small town where I live is very weak. Houses linger on the market for a long time, and many of them are very overpriced. This town of under 4000 people is saturated with rentals also, so the rents you can get for housing is very low.

My goal in real estate investing, is cash flow. I do not want to rehab or flip properties, I like rental cash flow. Seeing that where I live was not going to work, I began looking 1.5 hours away to Tucson for deals. I knew from the beginning that multifamily was my goal. I had no interest in single family, and though the cost of entry is higher, and it is a more difficult path, I decided to start with it. I also knew a few things from articles I read on Bigger Pockets, like the 50% rule and the 1% rule.

Anyway my specific criteria for properties is 4 units, 2 bedroom/1 bath minimum per unit, newer than 1980, recently remodeled, under $200,000, in a decent area, and fully occupied. The property also had to pass the 1% rule and the 50% rule and I wanted $100 per month income per door after all expenses. I quickly found out that Tucson was overpriced in terms of multiplexes for what I wanted to accomplish, but what I wanted could be found in the Phoenix area. Since I was already going to have to pay a property manager, it wasn't a huge step to look at the Phoenix real estate market.

Anyway, I had an offer accepted on a Phoenix 4 plex last week, and am getting started in the world of real estate investing. This week I am looking at a very inexpensive single family that might actually cash flow in this tiny town where I live if I manage it myself.

I live in Arizona, and I have pretty good credit (798). I am looking at purchasing a single family property under $100,000. I still haven't decided if I will live in it or rent it out, so I asked my mortgage provider about interest rates for both ways. I told her I was putting 10 percent down on the property regardless of which way I used it, and that I wanted rates for 10 year and 15 year mortgages.

She sent me an email saying owner occupied is 5.25%, non owner occupied is 6.125%. Those rates seem a little high to me, especially considering that I am closing on a non-owner occupied 4 plex at 5% and a 30 year mortgage. My first thought was that because the loan was under $100,000, I was getting higher rates, but could it be that this lender just has rates much higher than market levels? Should I look for a different homepath lender?

I'm originally from KCK, and hoping to eventually invest there again. There are a ton of cheap properties there that are perfect for the buy and hold/cash flow investor. You won't see much appreciation, but the cash will flow.

Sorry, the formatting came out oddly. Also I did some of the calculations over so ignore my earlier posts.

4 Unit Apartment Complex Glendale, AZ

My Cash Investment $32,000

List Price $144,000

Offer Price $137,000

Down Payment $34,250

Closing Costs (using an online calculator) $4935

Mortgage payment 30 year fixed rate at 5% with 25% down $552/month

2nd loan (secured loan) $7185 to be repaid over 5 years at 2.25%

Average Rent per unit $500/month

Gross Income $24,000/year

Vacancy Loss 10% $2400/year

Adjusted Gross Income $21,600/year

2013 Taxes $1050

2013 Insurance $780

Property Management 8% $1728

Maintenance/Repairs/Supplies/Landscaping 15% $3240

2013 Water/Utilities $2640

Total Operating Expenses $9438

Net Operating Income $12162

1 Year Mortgage Payments $6624

1 Year Secured Loan Payments $1524

Net Operating Income - Loan Payments $4014 Profit per year $334.50/month

Cash on Cash Return 12.54%

Well I didn't get any responses, but that didn't stop me from driving out to Glendale on Tuesday to look at the property. Today I called my real estate agent and made the offer. If all goes well, I will get a reponse in the next couple of days.

Well the spreadsheet didn't quite come out clearly, perhaps I can create a link to it.