All Forum Posts by: Matt Brooks

I am working to put together a contract to purchase a triplex unit in TX. It is a nice deal but Seller has thrown a curve ball at last minute.

The seller is telling me she will not be transferring security deposits to me because these are considered last months rent.

This is my first rental property but I thought legally the Seller has to transfer security deposits being this is actually property of tenants.

How should I proceed or not proceed? Thanks for any advice!

Mike H. Just an update- I am closing on the lots. The city has verbally told me (waiting on proposal from city in writing) that they will install water meters on each lot ($800/each) for no charge and possibly a tax abatement. I will be meeting with builders in near future to determine next steps. I appreciate your help on this one so far and will keep you posted. I am now looking at a 7 year old triplex unit in TX. The negotiated price is $115k. My local bank is offering 15% down, 7 year note, 30 year amortization. Details with triplex are: 100% occupied, all on one year leases 7 years old, all brick unit 3-one bedroom/one bath units $550/month rent each-$1650/month total Landlord pays water/trash Water-$95/month Trash- $30 Taxes- $145 Insurance- $100 ?? Property Mgmt- $165 Vacancy- $165 With your experience would you consider this to be a solid first multifamily investment? It seems to be from my end, however, I am newer to figuring multifamily investments. Thanks for your help!!!! Stay warm!!

@SarahHumbargar - thank you for you reply! I will do my best to answer your questions below:

Right now I am looking at developing myself. My father is guiding me as he has experience in this arena. There is no zoning-small rural town in Texas. No re-plat required just looking at maximizing each lot. There is no fee for water tap. I will need to check on electricity, etc.

$50k is after the property is paid for.  I could use this $50k for construction costs of one or two units or invest in another property altogether if it makes more sense.

For $300k I could build (2) 2 bedroom 1 bath units. Finding renters does not sound like the issue in this particular town, however, it does have to make me money! :)

I appreciate any more insight you may have........thanks!

@Sarah Humbargar

@Mike H. Thank you for your reply and willingness to help. First, it is a small world as I have been in Jonesboro, AR for one year now. However, the previous 3 years I lived in Bourbonnais, IL and I have many friends in Manteno!

I will do my best to answer all of your questions:

The lots are priced lower due to it being a smaller rural town of only 4k people.

I believe I can have it built around $75-80 sq. ft. I'm looking at a 1900 sq. ft. unit, so lets call it $150k to build. The duplex would be worth around $155-$165k when built.

The rents for a newer 2 bedroom will be in the ballpark of $800/month.

The lots are already platted and ready to build on, requiring very little dirt work if any other than the slab. The water meters should be no cost.

My father will be managing the units for me.

I will be able to sell $45-$50k from stock every year to invest in rental property.

Am I better off building these units over time OR investing my money in properties elsewhere? This town needs new, clean rental units so this seems like an opportunity.

I appreciate your feedback as I continue to crunch numbers. I have a call tomorrow morning with the City Administrator and Economic Development Director. I will keep you posted!

Happy New Year! I am a new member to Bigger Pockets and am impressed with everyone's willingness to help on here. I currently live in Jonesboro, AR but am from TX. I have flipped land and single family homes but am interested in creating long term, passive rental income. My current opportunity I am seeking advice on is: I have a contract on 5 city lots in TX. All curbed, city/water and sewer and ready to build on and all connected. I am buying all 5 lots for $20k. Local bank is offering 20% down, fixed rate 15 years. No worries with financing. This is in a small town which needs newer/nicer middle class rentals for teachers, coaches, etc. I spoke with the city and they also have property they are willing to work with me on (not sure what this means yet) in return of getting more rental units built. Again, the town needs some nicer units. I will have $50k cash in June. Local bank is offering 15% down, 7 year note, 30 year amortization. What would be everyone's play here with my goal of creating long term passive rental income? Thanks BP!!! I'm looking forward to getting started in multi family!

Sent this one out late last night so I will re-post. Thanks!

Happy New Year Bigger Pockets! This is my first post and I have been a member for 6 days. I appreciate any advice in advance. My opportunity is:

I currently have a a contract on 5 city lots in a small town in TX. I am purchasing the lots for $20k. $4k down, finance 15 years fixed rate. This is the town I grew up in and is in need of newer/nicer middle class rentals.

Once the city learned of my intentions of possibly building rental units on these lots they would like to speak with me in regards to possibly using city owned lots for construction of even more rental units. 

I will have approx. $50k in cash in June to invest as I see best.

There are apartment complexes in this town but they are old and not well maintained. The town is in need of middle class nice rental units.

Local bank will offer 15% down payment, 7 year loan, 30 year amoritization. 

My initial thoughts are to build a duplex, refinance in 2-3 years, draw equity out and build again. I should have this same $45k cash available annually through my primary career.

How would you proceed? Thank you for your help!!