All Forum Posts by: Logan Beckner

Hello everyone! 

In my experience I always love a good follow up with threads so I figured I would provide one here if you're interested. This property is officially the first part of our rental portfolio and brings in about $550 of pure cash flow each and every month! So excited for where things will go from here. Cheers!

I know this thread is pretty old but I'm going through some of the local threads in my area... I'm from Frederick, md and I'm interesting in starting or attending some meet ups in the area. If anyone would be interested definitely message me and let's set it up!

Anyone still following this thread - would any of you be interested in doing a Frederick meet up? I don't see any already posted... thinking about creating one. There's so many good breweries out here that would be a nice place to meet and chat about real estate.

Hello BP forum users!

I'm challenging myself to push my comfort zone and I'm going to do my best to go to an in-person auction (this will be my first) to see how it is done. The experiment part is coming with my analysis... I'm planning to do the analysis of the property so that I can show up with a number in my head of where I would stop, then converse with the highest bidder to see what they did differently than me.

Here's the scenario. Baltimore County, MD property - Four 1BR units and Two Eff. Units. Fully Occupied with all leases continuing through 2022.

Open bid: 300,000; NOI from seller: 35,000 while self managing; Cap rate... unknown? (Struggling to figure out the best way to determine this but I've been running numbers around the 7%-8% area based on the surrounding location). Seller Financing IS available.

My math: From a traditional investing standpoint of investing 25% down the breakeven (for both cash flow and CoC return) purchase price is 450k when accounting for the additional management fees. With these same numbers, a $315,000 purchase price would give you a CoC return of around 7-8% and about 600/month PURE cash flow. this is all assuming a 20 yr Amortization with a commercial loan. (Again, I am new to this so tell me if there's another way)

Then I tried less money down approach for the seller financing. Instead of the 20yr, I stuck with a 30yr amortized loan with let's say a... 3 year balloon payment. the break even for the numbers I ran here was around 470,000. At 400,000 I'd be looking at only 300/month PURE cash flow but 8% CoC.

SO... What's am I missing here? Is this more of a "BRRRR" type approach? Where I would need to use OPM and raise the rents to increase the NOI? The expenses shown from the seller seem low as they are especially since they were self managing. Then I'd be able to refinance later on and increase the equity? Maybe the seller financing would be a similar approach where the number's aren't great right away from it's more of a multiple year play?

I know there's SO much more to the story that I haven't shared, but I hope this information will at least paint a relative picture for all of you to see where I have gone wrong in my analysis. The property was sold in 2006 for 300,000 and there's other nice single family homes in the area. Any help or advice for preparing to go to this auction would be so GREATLY appreciated. If you need more information to help me out just ask and I'll do my best to provide it!

THANK YOU!

Logan Beckner - Frederick MD beginner investor

Hello BP forum users! 

I'm challenging myself to push my comfort zone and I'm going to do my best to go to an in-person auction (this will be my first) to see how it is done. The experiment part is coming with my analysis... I'm planning to do the analysis of the property so that I can show up with a number in my head of where I would stop, then converse with the highest bidder to see what they did differently than me. 

Here's the scenario. Baltimore County, MD property - Four 1BR units and Two Eff. Units. Fully Occupied with all leases continuing through 2022.

Open bid: 300,000; NOI from seller: 35,000 while self managing; Cap rate... unknown? (Struggling to figure out the best way to determine this but I've been running numbers around the 7%-8% area based on the surrounding location). Seller Financing IS available.

My math: From a traditional investing standpoint of investing 25% down the breakeven (for both cash flow and CoC return) purchase price is 450k when accounting for the additional management fees. With these same numbers, a $315,000 purchase price would give you a CoC return of around 7-8% and about 600/month PURE cash flow. this is all assuming a 20 yr Amortization with a commercial loan. (Again, I am new to this so tell me if there's another way)

Then I tried less money down approach for the seller financing. Instead of the 20yr, I stuck with a 30yr amortized loan with let's say a... 3 year balloon payment. the break even for the numbers I ran here was around 470,000. At 400,000 I'd be looking at only 300/month PURE cash flow but 8% CoC.

SO... What's am I missing here? Is this more of a "BRRRR" type approach? Where I would need to use OPM and raise the rents to increase the NOI? The expenses shown from the seller seem low as they are especially since they were self managing. Then I'd be able to refinance later on and increase the equity? Maybe the seller financing would be a similar approach where the number's aren't great right away from it's more of a multiple year play?

I know there's SO much more to the story that I haven't shared, but I hope this information will at least paint a relative picture for all of you to see where I have gone wrong in my analysis. The property was sold in 2006 for 300,000 and there's other nice single family homes in the area. Any help or advice for preparing to go to this auction would be so GREATLY appreciated. If you need more information to help me out just ask and I'll do my best to provide it! 

THANK YOU!

Logan Beckner - Frederick MD beginner investor

Thank you so much everyone for these responses. I will reach out to the permitting offices to figure out the details! It sounds like it’s definitely possible and for what it’s worth, I’d rather not go down the duplex route but I want it to be legal! Again, thank you for the answers and suggestions :)

Maryland!

Hello all!

Main question: What are the laws associated with adding an additional range (or any other kitchen amenities) in a basement or ADU on the property? Does this classify the property of multi family? Is this legal? Any suggestions welcomed for answers or references to look into. Thank you in advance!

Background: My wife and I are currently searching the Maryland (Frederick county mostly) area for a viable house hack opportunity. Currently we are house hacking a townhouse with a basement tenant, but we share the kitchen and common areas. Our next place we are looking for a SFH that has an in-law suite or a separate basement entrance that would have a kitchenette/laundry etc so completely separate living (luxury house hacking). Duplexes are highly contested and low on availability in this area so to us, this option seems to be our best bet for house hacking.

Hello everyone! A while back I posted on Bigger Pockets and took some time away to really figure out what my fiancee and I are looking for in our future in real estate. After weeks and months of discussions and figuring it all out, we purchased our first property in Frederick, MD! 

It is a 3 bed, 3.5 bath Townhouse that we will be converting into a 4 bed, 3.5 bath when we convert the basement into a rentable bedroom. I had two friends lined up to rent out the other rooms, and both have fallen through. I am now looking into how to find, screen, and draw contracts for renters I do not know. 

We are looking to rent room by room to increase the cash flow. Any suggestions on this is greatly appreciated! We are so excited about the small renovations that we are putting into this and getting two rooms onto the market. All responses and ideas are welcome :)

@Brian Wilson @Russell Brazil You guys are definitely right. Even with my short time in researching, SFHs is going to be our best bet, and looking to make the money when we buy is going to be crucial. I know I am a hands on learner, so if anyone in the area is going through a deal, I would love to get up close and personal as much as I can. My whole family and close circle either rents, lives at home, or does a conventional loan. I have little to no exposure to the market and I'm looking to gain insight, knowledge, and experience!