All Forum Posts by: Brant Richardson

If you like the area of town then I think those numbers look good to hold.  Build that passive income, one chunk at a time.

   Financing is what will make it possible.  Interest rates are incredibly good, now is the time to finance.  10 years from now you will have much higher rates, those higher rate loans will be the ones you want to pay down fast.  Lock in these rates with 30 year fixed loans and pay the minimum each month until you complete the acquisition phase of your investing.

If this is an ordinary property I would not want to pay more than 30k, including rehab. If there was something extraordinary about it, like it was lakefront and had 2 extra lots with it that would be different, but then rent would be higher too.

I would inspect it myself.  A good investment realtor needs to know something about inspecting and rehab, find the right one and they will help you.   Then make an offer with a contingency like getting financing.  If the offer is accepted but something big turns up in the appraisal or title search, then you can back out on your contingency. 

@Laura Williams 

I'll send you a PM.

Rehab from afar is definitely something to be concerned about.  The way I am set up helps alleviate the stress by paying an objective 3rd party to run the rehab.  You still need to build that trust.

If you qualify for conventional lending then your options are wide open.

If your friend does not have it listed and it is at market value, you could at least ask him to drop the price by the amount he would be paying in agent fees if he did have to list it.  Also, if it is at market value, I would expect it to have no rehab needs at all - fresh paint, carpet, up to date bathroom and kitchen.

One more factor.  Is seller financing the only way you can do a deal?  If so, then that makes this a much more attractive deal.

Don't forget maintenance, I use 10% = $75

Which would bring cash flow down to $48/mo.  2.8% cash on cash return. Too thin to call it a cash flow deal. 

If you manage it yourself and can really get 850/mo then you have $225/mo cash flow.  That's a cash flow deal.

The other factor, are you buying at market value or any discount?

Even if you only break even, living rent free is still awesome.

Vacancy and maintenance are real expenses, do not convince yourself that you will not have these expenses with this property.  If this property is really owned by somebody addicted to gambling then there is likely deferred maintenance.  The unit with a 14 year tenant almost surely has a lot of deferred maintenance.  If you truly want to live there then go for it but go in with your eyes open to the real numbers.  Even if you only break even, living rent that is still awesome.  You do not come across as an objective investor though, you sound like an emotion driven owner occupier who has fallen in love, not trying to offend just putting it out there.