All Forum Posts by: Leon Trak

@Roman Pak that link is to a good lesson I didn't have to learn the hard way, thanks. Right now, I'm trying to narrow down my potential niche and can cross off condos. From what I've read, a good starter deal would be either a SFR or multi unit (4 or less) which my wife and I can move into and rent out the rest.

It's been more challenging than I expected to find the right property, part due to a hot market in Houston and part due to my inexperience. I'm trying to stick to the rule of thumb 1 month rent = 1% purchase price, but these properties are located in areas not known for appreciation. In areas where properties have been appreciating, monthly rent is closer to .07 - .08% of purchase price. 

Anyone have recommendations as to what I should be willing to accept? Would you guys go for the lower rent but higher appreciation potential?

Thank you all for the warm welcome. I've asked one question in another topic and already received very helpful responses. Looking forward to this new adventure!

Thank you all for the quick and honest input. You all have just helped me avoid several thousands in beginner mistakes. What about the following multi-family deal:

Type: 4 unit complex with two garage apartments. (would this qualify as a commercial property requiring higher interest rate?)

Price: $150,000 (planning on 20% down)

Rent: $3,100/month (4 units at 550/month and 2 garage units at 475/month)

Utilities 1,450/month (Owner pays utilities, electricity, water, gas, for 2012 came out to $17,000)

Mortgage: 750/month

Taxes/Insurance: 450/month (based on zillow)

Cash Flow: 450/month (please let me know if I'm missing some basic expenses)

Building has window A/C units. Property is not in the best shape. Located next to a university but also not in a very good area of town.

@Brant Richardson what is your opinion regarding multifamily vs SFR for cash flow. I feel that at a comparable price point, you could get more cash flow from a multifamily than a single family. But please correct me if this is a wrong assumption.

Thanks,
Leon

Hi Guys,

I'm looking into my first potential real estate investment and would like all advice possible.

Option 1:

This property does not have a good appreciation potential, but financially appears to be cash flow positive. Based on the below info, would you recommend that I pursue this deal?

Type: Condo 1bed 1bath

Price: $28,900 (would try to pay $26,000 cash)

Current Rent: $550/month

HOA: $220/month (not sure what expenses/amenities are covered)

Option 2:

Next door is an efficiency unit with a remodeled kitchen listed for $32,000. Not currently rented. HOA is $186/month. Should be able to rent it out for $400.

Thanks,
Leon

Hi Everyone,

I've decided that Corporate America is not for me, and what better way to become financially independent than through real estate! So far I've listened through 40 episodes of the BP podcast and browsed through this forum soaking up knowledge.

I'm looking forward to learning from everyone at the biggerpockets community!

-Leon