All Forum Posts by: Mike Mead

Good Luck to you. You can never learn enough about this business. Thank you Dean

Hi Ryan, I think the Vacancy expense was already mentioned by Jay Patel. To add to that, I wanted to air on the side of caution in case they were both vacant at the same time (Which I don't anticipate happening). Also, I decided to do the 30 year mortgage for the increase in cash flow. I plan to hold my properties long term. My rationale is that if I use the same formula for all my properties I can make my systems more efficient therefore scaleable.

Thank you!

 Best of luck to you. It is definitely worth the wait. Thank you so much! 

So I finally competed my first deal!

Since finding BP 3 years ago, I knew I would start a business in Real Estate at some point. At the time I didn’t have any money saved up and all I had was time. So I put a plan together to save up enough for a down payment. In the meantime, I did nothing but read books, listen to audiobooks, and listen to Podcasts.

I feel a big part of my success was because of BP so it’s only right that I share the details of my first deal. I had been looking at several properties in the NC area and found a Duplex for sale. It was 3 beds 2 baths on both sides and built in 2008. It was listed for sale at $169,000 and had renters in place bringing in $1500.00 per month. Home appraised for (179K)

$750 per side was about the average rent for this part of NC. I had analyzed countless properties in the area so I felt comfortable with that amount being collected. After some further research, I found out that it was an estate sale. I then looked at the public record to see if they had refinanced the property at all and didn’t find anything. I determined that they owed about 85K on the property.

From this point, I thought  a good opening bid would be $125K. They declined, and after brief negotiations we settled on $132K.

(Disclaimer) I know I may have made some mistakes but I’m willing to work through them.

Rent Collected $1500

Mortgage -$675

Property Management -$150

Vacancy -$75

Repairs -$75

Liability Insurance -$27

HVAC -$25

Roof -$35

Cash Flow $438 per month

20% Down Payment $26,400

30 year terms

Cash Flow Yield 19% (438 x 12 = 5,256/26,400)

ROI 22%

Note: When they countered to 145K, I got some great advise from @Michael Lee to tell then why I was offering a lower price and give my reasoning... IT WORKED!!  Thank you Michael for your help. 

I'm officially off the sidelines!

If anyone would have handled this differently, I would love to know.

Thanks

Stephen, welcome to BP. I'm a new investor as well looking to get my first property in the next few weeks.  I too am looking at single and multi family properties. How long have you had an interest in real estate? 

Mike 

@Thomas Franklin  Thank you for the Warm Welcome, and thanks for opening a line of communication for me. I look forward to picking your brain and thanks for the advice. I'm really excited about real estate and can't wait to have my first success story. 

Mike 

@Michael Lee  Thank you for the warm Welcome. You have already given me a piece of advice that I am putting to use today. I will be making an offer on a Single Family home and I will list the reasons for offering a lower amount. I am originally from Detroit but now live in East NC. However, the type of work that I do has me traveling to many different parts of NC frequently. Since I've been saving up for the past few years, all I have done is researched the market here. While I still have that newbie nervousness, I refuse to sit on the bench. I look forward to picking your brain in the future and thank you for being a resource.

Mike 

I am new to Investor From North Carolina and I Here to expand my knowledge. I have been studying real estate for a few years now, reading, podcast, audiobooks, etc; While saving for my first Rental. 

I am finally looking to buy my first Single Family home in the next few weeks to test the waters. I am in this for the long haul and would love to connect with as many local investors as possible.