All Forum Posts by: Matt Lyons

@Allen Li

I will chime in after reading all the posts:

I am not a fan of SFR... all eggs in one basket. I have a few but the profit for renting is not large and the risk is large if that one tenant sucks

I am also not a fan of huge places with 30+ units at a 5 cap... too much work for too little monthly cash flow. I agree big boys are just looking for a better than 2% ROI but I don't have the issue of having to put $9 billion to work!

I do LOVE 2-20 unit places and here is why:

With more than one tenant the risk is less, one can suck while one pays and you are at least covered.

You can get a 30 year fixed on 4 or less units so funding is great at 3.75%

Cap rates can be awesome... I don’t look at anything below 10 for a cap and these smaller multi unit places can show that

@Jorge Cajamarca

It is a four plex and three SFR... all but one has new metal roof. All have new furnaces as well

Two are rented and owner does not want to rent the rest but they are all turnkey (I have seen them three time now). He will go as low as $285k but no lower.

Once rented up which would be easy to do it will generate about $3750 gross with tenants paying all utilities.

If you want I would do the following:

You put in $40k and I cover rest to close and get fully rented (about $20k)

We own and split profits 50/50

If I need to hire a management company that will come out of my half of the profits.

If not, beat of luck it is a great deal

@Joe S.

Yes there is a property management company out of Mexico MO

The place has been mostly rehabbed (metal roofs and newer mechanicals and so forth) so it won’t need a lot

I have been seriously considering it but just bought two other places and have one under contract so a little light on cash

I can get it (I have looked at it three times and negotiated as far owner will go)... I am happy to partner with someone:

You put in $40k and I will pay rest of 20% down... I will manage and lease up and we can split monthly profits 50/50

If it is still on the market once my FL property sells (it is under contract) I will be doing it myself, but if someone else takes it there are two property management companies in the area but I have no personal experience with either

@Luke Andersen first the initial price was high. Second people have had a hard time financing because owner has decided not to rent, he has about 40 doors in town and wants to be done and retire. He also feels easier to show with no tenants.

I have investigated the buildings (in pretty good and turnkey shape) and the local rental market and it is not bad. For sure there is a need for rental space in that area.

And finally NO ONE ever looks in small towns like this

Seriously it is a no brainer... I would happily partner with you on it because the deal works

@Marc Alexander rates are low so that will help... you are looking at the right numbers as well (I calculate mine with just debt, tax and insurance and only invest at a 33% return... knowing that my goal does not take into account vacancy or repairs so I come in below the 33% but always above the 20% mark you want to hit)

Look for and buy fir cash flow... stay away from real crappy areas (like you can get great ROI in south side of chicago but you have to carry a gun to collect rents) and make sure tenants are "good" people.... I get great cash flow and awesome tenants from rural areas

Your numbers are good in my opinion

@Luke Andersen I am happy to take your money and pay you 10% with zero risk!

Either that or check out 100 S Sturgeon, Montgomery City MO on loop net.

I have looked at it and you will EASILY make your 10-15% with that property.

Problem, solved!

@Luke Andersen everywhere is great and everywhere can suck!

First, know why you are investing, what is your goal (cash flow, appreciation, flips, etc)

Second, how are you going to manage it... property manager or by yourself?

Once you know those two things then you can figure out the where. In my opinion there are deals and steals everywhere but you have to first figure out what you want and how you will manage

For cash flow and ease of management I like to look in smaller country type towns... they suck for appreciation but the buys are great and cash flow is great and tenants are great... most of my properties get me my down payment back from cash flow profit in under 36 months

If you want appreciation WAIT! Prices are high in those “hot” areas so wait till they come down some... I bought a place in Bonita Springs FL and I paid fair value in Dec of 2020.... it is under contract to close in a week at $105k more than I paid. Wait for the hot areas to come down, cash flow in small towns and if so all states can work

@Jasmine Morris

Good for you!

MAKE IT HAPPEN!

@Adrian Goss

I have a 3 unit in Milan, IL and so far it’s going well. Tenants seem pretty good and cash flow is nice.

IA side should get you better ROI as taxes are less. Also lots of section 8 people coming from IL to just across border which can be both good and bad

@Adrian Goss good question. I started all local(ish) and have branched out some.

Because I wanted cash flow I had to look hard to find the right deals... I was able to find them in the far west area of IL about 1-2 hours from my house

My target is to get my down payment back from free cash in 36 months or less

I invest is VERY small towns. One town has less than 300 people, another about 500 people. Found some great tenants who fix a lot of their own issues, usually pay cash, and if late they tell you

Also no big city problems and a lot less people looking.

I have branched out to FL and Ozarks but fir appreciation and fun