All Forum Posts by: Michael Wentzel

@Pam R. My wife is from Sunbury and I'm from Delaware. So we're certainly familiar with your part of the world. We presently live in Colorado Springs and are slowly trying to build a portfolio in southern Colorado where the numbers are better.

At the moment we own one townhome and a four-plex. As we've learned more, our numbers or criteria which we expect have become stricter. So we now look for 2% rent to purchase price, 30% annual return on cash invested and $200 cash flow per door. In the area we're focusing on, there aren't many multi-families that hit those numbers. So now we're considering single-families that would cost around $30,000 and rent for $650 a month.

I'm a little concerned that the maintenance costs will be higher on the single family properties. For example, on the fourplex I have four units but only one roof to worry about. If I pick up four single families, I'll have four roofs to worry about. On the bright side, if we ever need to sell, moving a single-family is generally easier than a multi-family.

So that's a few of our insights as we wrestle with a similar situation.

Mike

PS- We actually considered investing back in Central Ohio, but the high property taxes scared us away. On my $90,000 four-plex I currently pay $30 a month in property tax. In central Ohio, I imagine this would be 3 to 5 times higher. Do you still find good returns in areas with high taxes?

Hello Everyone,

A lot of common ground here...

Bigger Pockets Podcast

Real Estate Guys

Planet Money- NPR

This American Life- NPR

Wait, Wait, Don't tell me- NPR

Dave Ramsey

Entreleadership- Dave Ramsey

PTI- ESPN

To be honest, I have yet to read a Real Estate book. But I have learned a ton from the Real Estate Guys and Bigger Pockets podcasts. They are amazing resources.

Mike

@Gary Miller Since it meets the 2% rule, it should give you enough buffer to make some mistakes and still find cash flow. The fact that you're moving into it yourself also lessens the risk on it.

How long has it been on the market? Can you drive the price down any lower?

From the little bit you've shared, it sounds like a great first step. I hope it works out well for you.

Mike

@Will Barnard Interesting insight. It is something to think about. However, I would guess that higher rates of inflation in the long-run will cancel out any drops in rents caused by large institutions with significant holdings.

That being said. I do like Dawn's idea of lower leverage amounts to create larger cash flow and allow my portfolio to remain profitable even if rents drop.

Good discussion.

Mike

@Bridget Garcia You've come to the right place to learn about Real Estate Investing. We're relatively new to the game as well. We're located in the Springs. We have one sfh here and a multi-family down in Pueblo. We're hoping to add another sfh to our portfolio by the end of the year.

I have a great local lender that I'm working with and can recommend Realtors in Colorado Springs or Pueblo. We also have property managers we like in both communities. If you're going to need financing, sitting down with a few lenders to know your possibilities should happen early in the process.

Mike

@Rusty Pollard As far as the Colorado market goes, ask me in a few years since I'm just getting started. At the moment I like the numbers I've been able to find in the Pueblo market. We'll have to see if I hit my projected returns over the next 12 to 24 months. Good luck as you go house-hunting up in Seattle. It seems like BP has succeeded again in connecting you with some locals with plenty of knowledge.

Mike

@Rusty Pollard Its great that you managed to pick-up your license partially through a college class. That should come in handy as you build your empire. I also like the strategy of buying multi-families and letting someone else pay the mortgage. I haven't had the opportunity to execute that one yet, but hopefully in the future.

We live in Colorado Springs. We have one rental here and just bought our first multi-family in Pueblo. We're looking to add a single family in Pueblo in the next couple months.

Are you ready for the sticker shock of the West Coast? I imagine getting into a duplex up there might be a bit expensive. Good luck hunting for a good deal.

Mike

PS- Definitely shop/ look around a little bit to find a good lender. But I wouldn't let 6 different lenders run a credit report on me, as it might ding my credit a bit. I would make a short-list of two or three lenders and let them run the credit reports.

Mike

@Alex Silang Welcome to Bigger Pockets! It is a great place to learn and connect with other investors.

I'm relatively new to investing, but I would recommend sitting down with a few lenders and getting a sense of what they are able/ willing to do for you. I would choose one or two national banks and one or two local banks. The goal is is to find someone who is willing to work with you long-term as an investor. This will usually be a local bank.

I haven't done much with online banks because we're self-employed (lending is complicated) and we want a long-term relationship with a lender. It would be interesting to hear if other investors have had success with online banks.

I would definitely get pre-approved or have a very good idea of what you will qualify for before you start looking. Don't waste your time and the Realtor's time if you won't be able to purchase.

Mike

@Kenneth Goldman I assume investors would be looking at return on investment annually. However, I haven't really dealt with investors yet, so maybe someone with more experience will answer that one in the morning.

Let us know how the deal goes.

Mike