All Forum Posts by: Michael Paling

I'm glad to see that this thread exists and can hopefully help save some people. I was going to detail my experiences with this, but what @Logan Vierstra shared is exactly what I would have. 

I'll add a few things..... When they set up my LLC, they basically handed that work over to a different company and I wasn't even working with the coaching program for that. Then, once the LLC was set up, they started pushing "raising capital" for your first deal. What they offered to do was raise $100K all from credit cards and charge $6K right off the bat. Thankfully, my realtor knocked some sense into me and brought me back to reality before I did that. And when I told the salesman "No", his response was "oh, well if you have 20% to put down, that's better anyway" and haven't heard from them since. A fresh and naïve college grad at the time, of course I didn't have a down payment!

This was all back in 2016 and needless to say, this was my big mistake that's haunted me. I've learned WAAAAY more about real estate from books, podcasts, and other things from biggerpockets. I think the Rich Dad Poor Dad book was what initially pointed me towards real estate, but that coaching program has really made that name sour to me. Even just writing this is irritating me again. lol

Hey Sebastian! Welcome to the club! I'm also brand new and looking to find that first deal. I've spent the past couple years learning about real estate on and off, but never really had the capital or job stability to give me the confidence to jump past the books until now. perfectly unfortunate timing with these market conditions! lol 

Again, welcome! you're in a great location to learn!

Welcome @Jace Loos! I’m also a real estate newb and also don’t have anyone in my family to turn to for investing advice. With that, simply posting and being involved on here seems to be getting me some help. I’ve gotten advice on a couple things and connected with a local meetup group. After years of “educating myself”, these first couples posts have helped me take that next step, get out of my head, and start submitting offers. Good luck in getting to know your area!  

Hey Mohammed,

I'm working on finding my first house hack too. After years of saving a down payment, I finally made my first offer on a place yesterday. With that, I'm still super green, so take my advice with some salt! 

I've been watching the market for a while, so I generally new what things were selling for and where market rent was at. I'd just keep an eye on Zillow or realtor.com to get a feel for the market in your area. being still new, I don't have money to pay for the BP pro, so I've used all my free BP calculator trials, but I've found the free version of the spreadsheet from this site very helpful. https://www.realestatespreadsh...

And yes, go find local meetups. The first one that I went to, I learned a lot about things I'd never heard of and started making connections right away. 

Good luck!

Thanks for the input everyone. The repair costs were also what I've worried about the most. 

@Tiffany Vogel I have a little bit of repair experience. I do plan to do the smaller repairs myself, but will still be learning as I go. I'll also be able to ask friends and family for help with this. I appreciate your point about relying on a thorough inspection. Thanks to that, I dug a little and learned more details about the inspection contingency that I wasn't aware of. For my goal, I'm really looking to stop renting (I realized I forgot to mention I'll live in one of these units), but want a little income to help.

@Fernando Domingo thanks for pointing out the maintenance costs. Something like that is why I put in the "inexperience buffer". 

Hey all,

I’ve got a potential deal in Ishpeming, Michigan that I’d like to get some input on my evaluation results:

TLDR; Property cashflows $190 but the COC return is only 4.9% due to assumed soon needed repairs (roof and drywalling/maintenance). As a first-time investor, I'm thinking the COC isn't great and doesn't provide me enough room for errors so I'm better off to keep looking. thoughts?

Property details: Side by side duplex, 2 bed/1 bath in each unit, 2002 sq ft

Asking price is $120K.

Current total rent is $1175, but similar units are going for ~$1500 to $1600. These tenants have been around a while. Increasing rent >30% is another potential issue. 

Estimated fixed expenses (utilities [monthly averaged], insurance, taxes) are $530, and I’ve allocated $200 (12.5%) from rent for Capital expenses, and about $125 for an “inexperienced buffer”. I estimated the vacancy at 5% ($80), because there’s quite a high need for rentals right now.

It was built in the “1900’s” and the owner has owned it since 2003, but it doesn’t look like many updates have been made, except maybe siding. There’s no mention of the roof age, so I’m assuming it’ll need replacing soon, especially since the edges of the shingle are curling. There are several cracks in the drywalling that needs fixing. I don’t really know how to estimate these costs yet, but I’ve estimated $20K for costs. I’m thinking that’s conservative though.

With all this, I was looking at offering $110K, so mortgage expenses would be about $475. Similar Neighborhood duplexes haven’t sold at $120K just yet.

Numbers summary:

Monthly rent = $1600

Fixed Expenses = $530

CapEx = $200

“Inexperienced Buffer” = $125

Vacancy = $80

Mortgage = $475

Cashflow = $190

Cash-on-cash return = 4.9% with $20k repairs. If repairs are closer to $10K, COC would be 6.3%.

Since this is my first investment, I'm thinking the overall COC really isn't great and doesn't leave me room for error with the roof and maintenance costs. Or am I overthinking this? I'd love any input!

Hey BP Community! I'm new to the real estate world and based around Marquette, MI. It's a small community up here in da yoop, but I'd love to meet up with other local investors to make new friends, share stories, and learn about the local market. 

I just moved to the area last summer for work, but have previously lived in both Houghton and Iron Mountain. I've spent several of those years "thinking" and "learning" about real estate, so now I'm currently looking to purchase my first rental property. I'm looking for a multi-family with the intent to live in one of the units. Marquette itself is now beyond my price range, so I'm most interested in Negaunee/Ishpeming, which is also slim pickin's right now.

Shoot me a message if you'd like to connect!