All Forum Posts by: Kevin Nichols

Looking at a fourplex. Below is the deal so far.

It's in a decent neighborhood and has a new roof this year. Cash flow is more important than Appreciation, but the neighborhood will not go down in value. It's a pretty established area near a small local college.

Thoughts?

Kevin

Oh..forgot to share how:

1.) Log into your Google Account

2.) Go to Google Maps

3.) On the top left search bar, insert your cursor and then go down to "My Maps"

4.) Click "Create"

5.) To start out, add all your known rental properties and rental rates into a .CSV

Template example: https://dl.dropboxusercontent.com/u/12532182/test....

6.) In Google Maps, "Import" the CSV

7.) Map your column names and there you've made the first map.

8.) Then as you get additional rental data, you can just update your map. The map is private unless you make it public.

Thanks,

Kevin

Making your private Google Map is an easy reference option for rent prices. I would use Zillow for home sales prices.

My only concern is keeping up with the numbers, but in my area rent prices are pretty stagnant. May 1-3% increases.

But it's a good way to visually see what competition is getting.

Kevin

I've just started out investing and wanted to find a better way to keep track of area rent prices.  Has anybody else used Google Maps (Private map) to track rent in your area?

After getting hearsay info from for rent calls and other investors in the area, I'm going to build my own map of rent prices.

Example: https://www.google.com/maps/d/edit?mid=z_BgbjP9NJy...

Has anybody else done this?  Is it overkill? 

Kevin

Hi @darrell perez

We just recently started purchasing rental property in Rock Hill. Purchased 1st duplex and working on 2 other offers now. There are a lot of investors in the area.

Good luck.

Kevin

Lenders who loan LLCs will stick you with a commercial loan (slightly higher rate) and still require the personal guarantee from 1 or more LLC members.

I have an LLC partner in SC and one of the members will purchase the property and then immediately deed it into the LLC. The mortgage is not commercial.

You need to have an addendum to your LLC operating agreement that outlines that members must do this when purchasing rental properties.

Thx,

Kevin

You'll have to go to a portfolio lender after 4-5 houses with mortgages. Slightly higher rates, etc.

To get cash back out of your rentals, you'll have to wait a year for renter history and you might get 75% LTV for your refi's.

Another option is to partner with another local investor, create an LLC and let him/her buy investment property using their good DTI, where you still invest cash to help cover the new property purchases.

Or use the snowball theory and focus on paying off a property and then have the ability to mortgage new properties.

Disclaimer: I'm by no means an expert. I just closed my 1st property with a partner this month.

Thx,

Kevin

I had a similar experience in late 2012, after the sale of software. We immediately invested the money in early 2013 with a reputable financial advisor and got a 24% return last calendar year.

Then, this year, my wife and I decided to purchase some buy and hold rental houses as a way to diversify. Don't dump all your money into real estate.

The one issue I'm having is that having cash doesn't necessarily make you attractive to lenders. 

Even though our money, for the most part is in taxable brokerage accounts, reaching out to lenders for rental property loans...they mostly have looked at our W2 income on the past 2 years. We refied our primary home with a 10 year mortgage in hopes of paying off before our 1st child goes to college. 

That's the only debt we have and still our debt to income ratio was "too high" to purchase additional rental property. 

I own my own business, and typically reduce my W2 income as much as possible, but that has hurt me....even with having access to cash.

So...you may want to start small, but you need to start soon....especially if before you new cash that you had a regular paying W2 job. 

One thing I did was to partner with another person who had a very low DTI ratio and we did a 75/25 LLC, where I would pay 75% of down payments on the rentals we purchased. He was happy to reduce his exposure, but still have some cash flow and diversify.

Thanks all for feedback. Our first duplex is getting 38% COC and when I ran the numbers with paying cash on this 2nd property, it's just not as good.

Plus, the property is in the middle of a botched rehab and the owners are absentee (Canadians with this property being in SC).  I was hoping to lowball the offer, but I don't think a mortgage could be obtained on the property. That's why I was thinking about a cash bid. 

If I could talk to the sellers, I think I could sell them on the offer. Would it be OK to share a letter in our offer outlining why we offer what we did?

Kevin

We've recently started investing in rental property. We're closing on a duplex this month.

My question is about purchasing rental property with cash. There is an opportunity to purchase another property for about $30K and I feel a cash offer would do better.

But when I run the numbers, the COC is about 10%...about $280/month cash flow after taxes, insurance, and a small maintenance budget.

House: $30,000 cash
Rent: $500/month
Taxes: $1300/year
Insurance: $490/year

Long term, I'm tying up $30K and won't get back to even until 9 years into the rental...and the property appreciation is minimal...properties in this area never appreciate a lot...maybe in this case $5K to $10K in the 9 year period...I would estimate.

So...explain why paying cash is better?

Kevin