All Forum Posts by: Matt Moldenhauer

@Kirk Dawson Hi Kirk! That's awesome you're only 16 and already thinking about your future! Being 16 though I doubt you would be able to obtain any financing though. I think the best thing you could do is get a job, keep said job and save your money so you'll have something to invest with when your are of age. Be very responsible with credit cards as well. Good credit is VERY important. Good luck!

I use Joe Hurster with Weiss Insurance Agency out of St Louis. I switched for a bit to a local agent and regretted it so went back to him. He's always taken great care of me and him not being local has never been a problem. They are a broker so their rates have always been competitive.

Thank you!

So this may be a dumb question, but I'm having trouble finding the answer or maybe it's just not clicking. I know in Missouri you buy the tax lien and the owner of the property has 1 year to pay it back plus simple interest on the amount owed and fees. What happens with the money that is bid above and beyond to purchase the tax lien? Does it go in an escrow account through the county and you're paid pack if they pay the delinquent taxes? Do you "forfeit" that money if you take ownership?

If it sounds too go to be true, it probably is...

Here is a very good explanation/example of COCR: http://www.propertymetrics.com/blog/2013/11/14/cas...

COCR is just one of the MANY things to consider when evaluating a potential purchase.

Cash Flow is what you're left with at the end of the month after all expenses have been paid. 

I'm not exactly sure what the correct way to calculate an owner occupied duplex. 

*bump for someone smarter lol

Here are some things to remember when financing an investment property:

You'll need 20-25% down.

You'll need to pay the closing costs. I believe you can work 1-1.5% of the cost into the loan. 

You'll need to have six months reserves in the bank or a retirement account you can cash out if need be.

I personally try and shoot for a COC return of 20% or higher AND monthly CF of at least $250. This works well in my area. I would think it would be pretty close for the midwest as whole and probably way off base for the east or west coast.

I would be somewhat hesitant to keep buying homes with FHA loans in hopes of the value of your property increasing and interest rates lowering or staying low in five years to refinance. I just refinanced my primary from an FHA loan to increase cash flow for when i buy another primary house. It worked out well for me because i had paid down my loan enough that i was able to drop PMI, due to buying it right and got a lower interest rate. I would NOT buy another property right now with the same intentions though.

Hope this helps!

Without knowing the numbers, it might be a decent cash on cash return, but over the short term it might eat your lunch. What happens when the unit sits empty for several months or needs a new roof, HVAC system, water heater or a tenant destroys the floors because of an unreported water leak. If the one duplex was paying you $600/month, to me it might be worth it. For just $200 though i'd rather not have the headaches. 

I personally would not look at your investment as "in 30 years i'm going to have a pile of cash". I'd rather buy an $80,000 single family home, spend $18,000 on the down payment, closing costs and minor repairs, that's going to cash flow $300/month.

I like your idea, but i think you'll be hard pressed to find a GC that's willing to do that. Finding a good GC and even a good, reliable sub contractor is hard enough. I would think trying to find a GC that's willing to babysit a group of guys with a prison mentality, teach them, provide the tools and probably a ride to and from the job site would be next to impossible. Say you buy a house that needs $50,000 worth of work and that GC's cut is 10%. Would you be willing to take on a project with those headaches for $5,000?

This would be more of a business plan for a GC, not the person hiring the GC. The GC typically chooses the sub contractors. A good one chooses them based on cost, reputation, product lines supplied and the list goes on.  

Those are my two cents. 

I'm by NO means an expert, but i would probably wait. It sounds like you might over extend yourself. To me the risk for reward isn't really there, cash flow wise. Now if you think the duplex might experience some major appreciation over the next few years it might be a different story, but i don't really see that happening in the midwest.