All Forum Posts by: Nickolas Burns

@Jennifer T. 

 @Vince Mathis

@Brian Goodling

@Benjamin Aaker

Update :

So I ran through the property with an inspector and I also viewed all of the units. I will say I am not as confident about the property as I used to be and am considered pulling out. 

With the size and the clutter of the units from the tenants already living there it is apparent that the people living their do not take care of the units very well. The unit I saw when viewing the property was definitely the best unit as far as quality and clutter. 

1. Most of the kitchens are much older and in one case the cabinets are all ready to fall off of the wall. 

2. One tenant's unit is very apparent that a lot of weed is smoked in the unit which is illegal in SD so I dont have much experience with that. 

3. 3 of the 4 units ranges are older and look like they could need to be replaced soon

4. 3 of the 4 refrigerators look like they need to be replaced. 

5. The two water heaters are 16 and 17 years old which is well past life expectancy. 

6.  The overall quality of living for two people is going to be poor. This looks like a great deal for a flipper and re renting the rooms at a higher price. 

7. The 3/4 tenants could prove to be an issue 

8. On almost every window seal is cracked which lets in condensation between each. 

I would be able to have better situation renting by the room in town but you cannot have more than 3 non related individuals living in a property which would be an issue as far as cash flow but appreciation would be better.

I wouldn't want live in this small of a property at this quality and I know the individual who wants to live with me wouldn't either. Am I looking too much at how the current tenants are taking care of the property or should I suck it up and live there, renegotiate the contract or should I pull out and try and find better places? I know it is up to me but I would like some advice. 

Hey Guys, 

I will be breaking down my deal in Sioux Falls, SD that I am currently under contract for and would love some advice/opinions while I am in my due diligence period. 

Price - 235,000 - 3% from seller towards closing

Property Type - Multi Family

Year Built - 1949

Units - 4 units

Bed/Bath- 2 bed/1 bath per unit

Sqft - 500 per unit - 2000 total

Recent capital improvements-
- 2018
Unit 3: New fridge, window, vanity and toilet
- 2017
Unit 1: New deck, AC, washer and dryer, baseboard heaters,
kitchen faucet
Unit 2: New deck, AC, window, baseboard heaters
Unit 3: New paint, carpet, trim, fixtures, baseboard heaters
Updated landscaping
- 2016
Unit 2: New fridge, stove, toilet, vanity, tiled shower, paint
carpet, trim, fixtures
Unit 4: New tile flooring, bathroom sink faucet, kitchen
faucet, paint, trim, baseboard heaters, AC and fixtures

New roof

How I will be funding it?

I will be using an FHA loan combined with South Dakota Housing which will cover my down payment and I will have to repay my down payment if I refinance or sell the property. Sellers 3% towards closing.

Income Breakdown

Unit 1 - Lease Ends in November of 2020, 

Unit 2 - Lease ends in 2 years

Unit 3 - Lived there for 8 + years

Unit 4 - Lease ends soon - I will then move in once my college semester is over. 

Total Income/Month = $2420

Minus the $575 once I move in but I will have a roommate who will pay 200 + half the electric so I would subtract $375 from $2420 =  $2045

Expense Break down:

PITI = $1447.62

Tenants pay Electric,Cable, and Internet 

I pay water which at most is $180/m

Lawn = $50/m

Snow = $100/m

Garbage = $50/m

Electricity for my room =$50/m

Total cost = 1877.62

Income - Expenses = +$167.38/month plus I would live for free

I have an inspector going through the property tomorrow and am heavily considering having the plumbing checked out due to it being an older property and would love advice on this. 

Rents have the possibility to all go to $650/month once leases are up. Cash to get into the deal is less than 3k with a MCC credit plus SD housing covering the down payments and 3% from the seller. 

Questions- What do you think of the deal? What else should I be considering? What other problems may I have that the inspector may not consider? Drop any questions that you may have that I missed their is a lot a missed but vacancy is low and I will be getting a bank statement from the seller to confirm rental income. I do plan to move out after my first year and claim the rest of the income that I am missing by living there. 

@Kenny Dahill @John Powell

Thanks guys this helps out a ton!

This is a hypothetical question and more to hear what you would do in this situation as I really need advice. So I am looking to purchase a 4 unit multifamily property and I will be using 3.5% down or a low percentage down as I will be looking to house hack this property. let's say it cash flows and doesn't have any upfront repair costs. So here is my question/dilemma.  I do not have the money to be comfortable to put a down payments on the house and don't want to rent as I am moving off of my college campus this summer and I want to start house hacking.

How do I get the money? My solution is a family member who wants to start investing. Except he doesn't want to just give me the money and I pay him back with interest he wants a piece of the property. This family member and I are very close so this would be a handshake deal with no formal paperwork and the down payment would be a gift and he would provide money for a security just in case something needs to be fixed. 

The pros:

I get to buy the property with his money and it is in my name 

I will get to house hack the property essentially living for free

The cons:

I will manage the property

I won't technically own the whole property which makes me worried about scaling up

The family member will provide the money and I will do all of the heavy lifting.

The family member will be getting a high RIO from this deal.

My Question: 

What should the terms of this agreement look like to make it worth it for both parties if the Family member doesn't want the interest but rather the experience of investing in real estate. 

It is worth it for me and at what % of the house does he own is it not worth it for me.

If the family member invests $12,000 what should he see as a return on his investment?

Thanks for reading this and any help would be great!! Keep in mind this would be my first real estate deal. 

Hello, 

I am a student at the University of Sioux Falls double majoring in Business Admin with a concentration in marketing and Media studies with a concentration in social media marketing. I have always loved real estate  and would love to shadow someone in the Sioux Falls, SD area that could show me more about becoming successful in the real estate market. Additionally, I would like to add value to whomever I am shadowing and help them as well. I would also like to learn more about starting a business and other investment bodies. Please message me and I can give you more information! Would also love to grab some coffee! 

Thanks! 

@Ben S.

Yes I’ll be going I have the details! I am definitely very eager to meet more investors!

@Breshawn Hawthorne

Thanks I will check them out right away! I currently work at a credit card company in sales/retention so all I do persuade and speak with people on the phone so hopefully cold calling goes well!

@Seth Ferguson Thanks for the advice that sounds like a great idea to build connections and even help myself and some investors make some money in the processes!

Hello! I have been interesting in investing ever since I bought a bitcoin when I was 15. Right now I am looking at real estate for an opportunity to make income now and passive income in the future. Right now I am currently going to college in Sioux Falls South Dakota and I am already connecting with local agents and other investors but I don’t have the available funds to start buying, so wholesaling or being a property manager seems to be the best route to go! I have been interested in wholesaling for a very long time and have done hours and hours of research but now is the time for action! Right now I am just developing my team and building a buyers list! Ultimately I am posting this to possibly find a good mentor that could help guide me in the process and to find some people who are either dealing in South Dakota or looking to invest in some real estate in South Dakota!

Hello! I am a freshman at the University of Sioux Falls and I been investing since I was a 16 years old when I bought my first bitcoin! I have been researching and reading about other forms of investments ever since. Now that I am in a bigger city that has more than 800 people I am networking, saving money, and building my credit. My current plan is to start wholesaling by starting a website, start drive for dollars, and to set up signs! I was just reaching out to the community to find a possible mentor in my journey and just different people for advice but also most importantly buyers who are looking to invest in the Sioux Falls area!