All Forum Posts by: Michael Breedlove

Chris Mason thanks for the tips. The purchase price is 425k for this 4-plex. Thanks for the info on gifting for down payment. So, we'll use our own money for down payment. If we do end up borrowing some of the inlaws money for any repairs or updates...any suggestions on what type of interest percentages we should agree upon?

Hey BP, 

My wife and I are in the process of potentially making our first real estate investment and purchasing a 4-plex. We will be using a conventional mortgage, putting 5% down, and paying the Mortgage Insurance upfront at closing. Seller has agreed to pay closing costs. My wife's parents have a HELOC on their current house and would are going to let us use/borrow some of it to go towards our upfront expenses at closing and potentially for any updates we want to do at the property. Our plan is to live in the property for a year and then potentially refinance, pull out some of the equity, and reinvest it on another property. We would repay money borrowed with interest to my inlaws and then they have already said they would like to reinvest that again with us.

    Obviously, borrowing money from family has it's pros and cons and we certainly want to do things the right way. My question is, what is a good structure or terms to borrow from family? (I understand that can vary depending on countless variables) What is a fair interest rate to borrow from family? 8%-12%? 

    Thanks in advance for your feedback. We're newbies trying to join the real estate investing game. I've spent the past year trying to learn, gain knowledge, and analyze deals. And we're ready to take the next step forward towards our first deal.

Greg Jeanfreau thanks for the advice! My wife and I are officially under contract on a 4-plex. All four units are currently rented at $1,000/month. Each unit is 3bedroom/2bath and 1,200 square feet. I'll be receiving the current leases soon so that we can review them. I have to do some research on how that process of signing a new lease works whenever there is a new owner. I'm pretty sure we have to honor the current leases. What I'm not sure about is if we can extend the new leases immediately (if tenants are good and if they are willing to) or if we have to wait until the current lease period expires and then potentially extend them for another year. We have been told that two of the units are on month to month leases and the other 2 are on 1 year long leases. We will be moving into one of the units, but I'll probably do a few cosmetic updates to that one unit first. The building itself is only about 12 years old, so it's in great condition. I also have begun to read up on current Louisiana laws regarding Landlording. We are looking to close at the beginning of May which will be good because we will receive the prorated rents for that month. Our plan is to live in the one unit for a year, potentially refinance, and then pull out some of the equity so we can possibly do it again. Any of you have personal recommendations when it comes to Landlording books? I know BP has a list of books they recommend covering a wide variety of real estate topics (I've read several of them and they've been very helpful). Pros and Cons of having year long leases as opposed to having month to month leases? Obviously, locking someone in for a year can be a little bit of a relief financially for a period, but I've heard it is difficult to remove bad tenants on long term leases and can end up costing more money.

Thanks for the tips everyone. We were able to We've put an offer in on a 4plex and are waiting to hear back. Matt M. Nice to meet you man. I'll definitely try to get in touch with you soon.

Great advice. Thanks for commenting.

My wife and I are looking to do our first deal. We are considering a 4-plex. We've never been landlords before. Just looking for any do's and don't's when it comes to owner occupancy landlording. We have young children and safety is always a priority for us of course. So any safety tips and or specific boundaries with tenants to set in place would be helpful. And any other wisdom in regards to first time landlords would be much appreciated! Thanks BP peeps.

Hey BiggerPockets! So, my wife and I are looking to do our first deal. We are in the Metairie, La (New Orleans) area and it seems like everyone else is also in the market for multifamily properties. We've been looking for potentially a duplex, but just aren't seeing any of the numbers work. We're considering looking into a 4-plex. In our area we would be looking at something around 425k-475k. We would do an owner occupancy. Hopefully find one with 3bdrm 2bath/unit for around 1k/month. We would plan to update each unit one at a time and increase rents. My question is....Is it wise for us to be considering a 4plex for our first deal? Any recommendations in regards to first time landlording a 4-plex property while moving our young family into one of the units as well?

Welcome to the forums Howard!

Thanks for the advice Ryan! Do you primarily flip houses on the westbank? What's been your experience with flipping on the eastbank?

Hey BiggerPockets! So here's the deal....my name is Michael and I own a painting business based just outside of New Orleans in Metairie, LA. I've been spending the past 6 months or so learning as much as I can about real estate investing and it's time to actually DO something about it. My focus is primarily going to be to buy, renovate, and flip (possibly in the Metairie/Kenner location) to start out. Then, I'd like to own several rental properties once I gain some more CashFlow. The plan is for my wife and I to get a traditional mortgage inorder to purchase a home to renovate. Then, my inlaws have agreed to take out an equity line of credit on their house and are going to have a little more than 40k in money that they are going to allow me to use. I plan to use that 40k towards renovation costs, holding costs, & other expenses. My questions for general BiggerPockets users: Would you recommend a single family home or condo for a first time flipper? Or would you just say that it depends on the specific area? Is it necessary for me to form an LLC when I'm first starting out in the investment game? (We are keeping the 40k in a completely separate bank account) My questions for local NOLA area BP users: What areas would you recommend for a first time flipper? I've heard suggestions for parts of Kenner, Harvey, Marrero, New Orleans East. Recently, I've heard people even talk about trying to purchase properties in the areas where the recent flooding has occurred. I would assume that resale for those areas may be pretty difficult, but those areas potentially could be good for acquiring rental properties. What are your thoughts on that? Thanks for any and all of you that take time To read this and respond. Any info/opinions will be appreciated!