All Forum Posts by: Michael R.

Update:  So, after some back an forth, they've accepted an offer of $159,000 with them covering the closing costs.  I plan to manage the property for at least 10 years, and put the additional 10% away for future expenses.  Keep your fingers crossed that everything goes smoothly!  Thanks again for the comments.

I'm in my early 30's and in the early stages of my real estate career so cash flow is very high on the priority list.  The place could be worth 12 dollars the day after I buy it and it wouldn't matter much to me.  My freedom number is a little north of 5 grand and this is another 360 freedom coupons towards that goal.  I'm just not sure it's worth deploying that much capital to tack it on.  I can see this staying in my portfolio for at least another 10-20 years.

The property in question is a fully rehabbed duplex in the NW burbs with both units currently rented.  The original asking price on this duplex property was 220k and has now dropped to 174k in the past week. We put in an offer at 145k and they countered at 167k. Assuming he'll meet us at 160, and based on the numbers below would this type of cash flow be enough for you to pull the trigger?

We've also performed an area analysis and everything checks out.  It's quite close to the 12 percent minimum we've been looking to achieve and we'll manage the property for the first 10 years which should bump up the cash flow quite a bit.  Any thoughts or opinions are appreciated.

Kindest Regards,

Michael

@James Bitakis rate/term refi's only change the rate and term of the loan, but at the same loan amount (assuming you don't roll closing cost into the refi like in Mike H's example).  This differs from a cash out refi since, as the name suggests, you are cashing out new money along with a new loan rate and term.  Going the rate/term route generally results in a lower interest rate than a cash out refi.

When I clicked on this I expected to see rave reviews of the BP customer service and response time.  All of my experiences with them have been outstanding;  I even suggested they write a "Bigger Pockets Guide to Customer Service" lol.  I'm glad to see this was just a technical mix-up.  

@Tom Olson That would be greatly appreciated!  Thank you!

I'm certainly intrigued by the idea of investing in NW indiana after hearing your points and doing some of my own research.  I live in the NW suburbs of Chicago and would have to hire a property manager to take care of the properties.  Do you know of any reputable property management companies in that area?

Thanks, everyone!  I will continue to keep communications with the tenant around how we can relocate him to a new place that's within his means.  

@Kevin Yeats the unit could use some freshening up (paint, hardwood refinish, etc.), but this isn't the guy for the job.  I've spent some time mulling over the things that I could have him do for payment towards his rent, but he's going to have to spend the next few weeks just cleaning out a two car garage full of his family's junk so I won't have to do it when he leaves.

@Dana Dunford I concur with all of the above.  My gut says, take your chances with someone new whom you can put through a more strict screening process.  Him moving on to a smaller place or a family member's for support is what's best for both parties.  I'll mention it to him in case he hasn't considered it.

Thank you!

Thanks @Kevin Yeats.  I like the guy, he keeps to himself, and takes care of the unit so it would be a win if he could find a way to afford it.  The only way I would consider it is if he signed month-to-month, but I would have to bump the payment since the previous owner had him on a 2-year that included a discount.  In my market the vacancy rate is so low and demand is so high that being generous is leaving money on the table.  It's certainly a tricky situation and I've been constantly juggling humility and business on a monthly basis with them.