All Forum Posts by: Lee Yoder

Hey @Eric Sammons, actually duplexes, triplexes and quads are appraised just like single family homes- based on comps. These smalls multifamily buildings are still considered residential. You can get a residential loan when purchasing them, and they are priced like a SFH, not based on income. This can be a negative, because you have much less control over the value. Five units and up are valued based on the NOI- net operating income (income - expenses (excluding the mortgage)).

@Allen Moore welcome to the BP community! I'm excited for you with this first deal!

I would suggest staying in Cincinnati since that is where you live and I'm sure you know the area very well. Also, if you want to do some of the work yourself, it'll make much more sense if the property is close.

Bank money is So cheap right now, so I would suggest getting a loan rather than pay the high cost of hard money. An FHA loan is a great product because you only have to put 3-5% down. I would be careful taking advantage of the "owner occupied" if you and your wife will actually be living somewhere else at the same time.

The other option would be to partner with someone that can bring the down payment for a conventional loan. You can buy the 2-4 unit under you and your partner's LLC, and have him bring the money for the down payment.

Good luck and God bless!

@Dave Perrotta, yes, Cincinnati, Oh is a great market for COC and you can still find deals at a reasonable cap rate. This is no secret though, and plenty of east and west coast money is looking for deals in the midwest. So, prices are significantly higher than they were just a couple years ago. I'm in agreement with @Adam Walter- I can't find any deals that work for me in Ciny right now.

@Sudhir Dalal, yes, Cincinnati, Oh is a great market for COC and you can still find deals at a reasonable cap rate. This is no secret though, and plenty of east and west coast money is looking for deals in the midwest. So, prices are significantly higher than they were just a couple years ago. I still think Cincy is a great place to invest because the cost of living is very reasonable and we don't see the drastic drop during a recession like what you often see in the growth markets.

@Susan Tan, you've already received some great advice. I agree with @Greg Dickerson and @John Casmon. Find a private lender that is willing to loan you the amount needed for a down payment and the immediate repairs. You can pay them off over the first 5 years with interest and a large lump sum at the end of the 5 years. If you can't find a good private lender, I think your best option is to partner with someone that can bring the necessary capital. This way, you don't have to worry about paying them back in short order because they'll just enjoy the cash flow with you. 

Congrats @Susan Tan! Without know much about this deal, it sounds like you're off to a good start because you got started! The first step is the hardest and you've already taken it. I don't think you'll have any trouble finding tenants, but make sure they're vetted really well so that you can keep them for a long time. Good luck and God bless!

Congrats on finding this property @Henry Offiah! It sounds like the Seller is motivated to sell and is willing to make this work for you as a 4 unit. I would roll with it as a 4 unit. Is the resident in the basement on a month-to-month lease? That would make it easy to ask them to leave soon. Maybe you could rent the basement out as storage to one or two of the other residents. You'll definitely want to have good management! Good luck and God bless!

@Alex Critcher you're off to a great start with underwriting. Keep it up and you'll be on your way to finding a great deal. I think you'd be overpaying for this property for all the reasons mentioned above. Unfortunately, it's really hard to find a property that doesn't demand overpaying right now, in my opinion. Good luck and God bless!

@Kyle Robertson I do thave to say that I believe the idea that you don't need to rush to quit a job that's keeping you away from your family because your kids will still be there next year, is terrible advice. Your kids will be gone before you know it, and you'll never get these precious years back. I believe a child's character, self-worth and relationship with their parents is formed when they are young, so these years are so important. The fact that your job is keeping you from your young kids is the number one reason you should quit your job in my opinion. 

Great thread @Kyle Robertson! I'm in a similar situation, but not quite as well set us as you. I agree with many on this thread that have encouraged you to "go for it." Based on how far you've come already, while working a full-time job, I have no doubt you'll do very well when you can focus all your time and energy on your real estate investment business. Good luck and God Bless!