All Forum Posts by: Melissa Sturges

Thanks for your advice!  I just needed a little reassurance since I am new at this and always second guessing myself. It's so nice to have the bigger pockets community for support!

The tennants pay all utilities. By cap ex do you mean the rehabbing I will be doing? Or future replacements of HVAC, water heater, appliances, etc? Those things are all fairly new and in good condition. I know I will have to replace them eventually since those things don't last forever but they should last a long time from now. Is the 10% I took out for maintenence enough to go towards those things in the future? The up front work I will be doing to the property just to update it will be included in my loan. If I am able to get that $725/mo in rent after the reahabbing I will actually make about $758/mo in profit so if I decide in the future to use a property manager for around 10% of the monthy rent I will still have a profit of $478 per month on the building. I think that's okay for only putting $6755 of my own money into it right?

I will be using an FHA 203K loan so I only have to put down 3.5%. I am hoping to get closer to $725/mo after I do some remodeling and the rental comps do support that higher rent. I suppose I could refinance later on since I plan on creating more equity after the biulding is rehabbed but the only way that would bring my payments down is if I put more cash towards it or get a better interest rate. Or am I missing something?

$2500 is for all four units. Since we will only be living there for a year I wanted to run the numbers as if we don't live there. We agreed on a price two weeks ago and are still waiting for the sellers signature on the contract. The owner bought the building in 2006 and paid too much for it by todays standards so I think he is having a hard time deciding for sure if he wants to sell.

These are two bedroom units. We plan on buying a house to live in after the year is over or a nicer duplex and we would live in one side and rent out the other. I also plan on saving up to buy more rentals over the years. I can save money from my job and I plan on saving all of the income that we generate from these units until we have about $10K saved up for emergencies, and then the rest would go towards another rental.

I was thinking the same thing, in the beginning it won't be a problem to manage them ourselves but when we get too many units eventually we would probably want to hire a management company. If it's about 10% then that would bring our profit down to $538/mo. I know it does not pass the 2% or 50% rule, I have heard of some investors just wanting a minimun of $100/door. I think I can live with $538/mo.

P.S. How do you tag people when responding to their questions?

I am possibly about to buy my first fourplex. My fiance and I will be living in one of the units and renting out the other three. We only plan on living there for the required minimum of 1 year. I will include the rent that we will get for our unit when we move out to determin if this is a good deal. We have been going back and forth with the owner and got him down to $163K but I don't think he is going to budge any more. We will also be borrowing about $30K for some rehab with a 203K loan. Here are the details:

Purchase and repairs: $193K

Down Payment: $6755

Rents: $2500 (Could be raised after rehabbing to about $2800/mo)

Mortgage: $967

Taxes: $415

Insurance: $100?

Repairs: $250

Vavancies $250

Total monthy expenses $1982

$518/mo cashflow, $818 after rehab

Would you do this deal? I know there are better deals out there but since we have to live in it for a year, we would rather not be in a war zone.

I am possibly about to buy my first fourplex. My fiance and I will be living in one of the units and renting out the other three. We only plan on living there for the required minimum of 1 year. I will include the rent that we will get for our unit when we move out to determin if this is a good deal. We have been going back and forth with the owner and got him down to $163K but I don't think he is going to budge any more. We will also be borrowing about $30K for some rehab with a 203K loan. Here are the details:

Purchase and repairs: $193K

Down Payment: $6755

Rents: $2500 (Could be raised after rehabbing to about $2800/mo)

Mortgage: $967

Taxes: $415

Insurance: $100?

Repairs: $250

Vavancies $250

Total monthy expenses $1982

$518/mo cashflow

Would you do this deal? I know there are better deals out there but since we have to live in it for a year, we would rather not be in a war zone.

I am about to buy my second house to flip. My contractor says that he knows somebody who will probably buy it from me once the rehab is finished. How much should I pay him for bringing me a buyer?