All Forum Posts by: Mark Ito

The one day this whole month I can't make it! Any chance of moving it to the 19th? I understand if not.

Hey Trent, I'm a little late to the party responding but just wanted to say; I also invest in Dayton, saw this deal and passed. We may have different goals though so take all emotion out and look at the numbers. If it fits your criteria, go for it. If not, pass on it. See you out there!

@Brett Deas thanks for the response. Would 20/80 be appropriate since they're providing 20% capital and staying hands off? Or if they provide the capital for the deal, is it customary to structure 50/50. Again first time, so I don't know what would be insulting and what would be agreeable. Looking for examples others have done.

This is my first time having private money interested in a deal. I was speaking to a friend about what I'm doing and a deal I was looking to acquire. There was no solicitation for funds, and he wanted to jump on board with capital. Current deal would be for a portfolio, and requires 20% of the total value as down payment. My questions are:

1. How have you all structured deals with partners? I will obviously be working with an attorney to draft a solid contract, but just need an idea for the terms.

2. I could do it on my own, but if I bring them on I can allocate my funds elsewhere on more deals. They say partners should bring something to the table, and he is pretty wealthy and there is potential for future partnerships if this goes well. Do I partner up on this deal, or go it alone and reach out for deals in the future? 

3. If we do partner, where does his money go? From what I've read and understand, it should go straight to title/escrow account?

Again this is my first time not using my own money, and looking to gain insight and lessons learned on private money and partnerships.

@Joel Broyles I'm factoring insurance in the PITI. All the pm prices I've seen are around 10%, have you seen otherwise?

@Hemrajsinh Waghela yea looks like I'm breaking even with the numbers I have. If those are all good numbers then I probably won't go through with this one. Just seeing if I was far off with anything that would make or break the deal

Looking at a 4-plex in Dayton, Ohio for $350,000. All units are 2/2s with balconies and larger-than-market av sqft. Average rent in the area is $950 (BP rent estimator). Currently fully leased with long term tenants, totaling $3500/mo gross. Property is in good condition in a low B to high C neighborhood and needs no repairs (but could use cosmetic at the end of lease in order to push rent.) I'm factoring property management (10%), maintenance (10%), vacancy (5%) and capEx (5%) into operating costs ($1050) to give me a NOI of $2450. PITI is looking around $2500 with a 6% 30yr conventional. Am I being too conservative in numbers or anything i'm missing for analyzing a 4-plex? Not conservative enough? I'm hesitant but would love to hear insight from others on how to refine my analysis.

Hey BP, been listening to the podcast over again and a topic stood out to me that seems to have a divide amongst the guests; As an investor, do you get your real estate license and become a realtor/broker or not? Looking for anecdotes for both to figure out if it's a waste of time and money, or if its been an essential tool to help your RE investing? Would love some debate and advice in the matter!

Hey Christian, STR could be a decent strategy depending on your situation. Are you able to keep your home fully furnished? Can you find STR management companies you like? Can you get turnover and cleaning crews to fit demand? I think Fresno is a great place to do it because it's close to the mountains and Yosemite, but it'll be something you'll have to decide if you want to do. Like you responded, you won't be geographically close so you need a team that will take care of all this without you (which costs money that you'll have to factor in.) Yes there are management companies that do STR and MTR.

Also, if your house is brand new with upgrades then you can push rent if you absolutely don't want to do STR/MTR. This would be more speculative in my opinion because you're already walking the line of negative cash flow, and who knows what appreciation and rent will be in the next 1/2/5/10/15+ years.

Last option I can think of is to rent out rooms individually. I have seen success with this as long as you screen tenants well and consider all the factors for this.

If you are positive you want to keep this, then you need to ask yourself, "How involved do I want to be in this?" Your answer to that will more than likely give you the answer of what to do with your property. Very/moderately involved = STR/MTR. Moderately involved = Lease rooms. Lightly involved = rent it out. Want nothing to do with it = sell it.

Only you have the right answer and must factor in all aspects of where you are now, and where you will be after those 2 years. If you need help analyzing or want to bounce ideas and specifics, feel free to PM me. Good luck to you!

@Cory J Thornton thanks so much for the response. The thing is, we read rich dad poor dad together three years ago. That is what switched our mindset to investing. We did a deep dive and found BP and bought/read about a dozen books from the BP library. She is well versed in real estate investing and was on board until recently.

I have made my teams (agent, lender, property manager, gc, inspector) in two geographic areas already and was ready to put an offer in for a MF that was a serious deal. That's when she froze up and now I am feeling really torn.