All Forum Posts by: Nuhan Demirkan

In order to "quickly" know what the "accurate" numbers you would have to do many deals. In the beginning you can get close the accurate numbers but it is not going to be quickly. First write down every item that needs to be repaired and get quotes for labor. Go to Lowes or Home Depot and price the material. Add 10% for margin of error. Add in purchase and sales cost if it is a flip. There are other costs if it is a rental. I guess what I'm saying is you have to go thru the process a few times to get an understanding of what the costs are in your area. Be thorough, be diligent, and be persistent. You will figure it out.   

Somebody smarter than me once said "everything works, nothing doesn't". Just start. You will soon figure out what works for you.

Why couldn't you finance it in both the LLC and your personal name? All the bank is worried about is will they get their money back with interest. I would approach the bank and tell them the LLC is for asset protection (they'll understand that) but they will require you to sign the mortgage documents in LLC and in your personal name. I do this all the time.

Sounds like the house you just purchased is a perfect comp to the one you want to purchase. I would show her the cost of transaction (commissions, etc) and make her a net offer similar to the net amount of your purchase. If her house is in better shape than the one you purchased give her the amount you budgeted for specific repairs as additional credit. Be open and honest, show her all the numbers and tell her that you will buy her home on the day of her choosing.

Good luck, 

Hello Gabriel,

You may be over thinking here. 4.1% fixed 30 year mortgage is never going to happen again in your lifetime. Personally I would take as much as I could afford and spread it as long as I could. Yes you are paying more interest in the long run but you are also reducing your monthly cash outlay. The question is can you earn more than 4.1% with the freed up cash by investing. I generally earn 35% to 70% on my cash by investing in rentals or flips. Buying down interest is pretty much paying the interest up front. I would not do that to 4.1% interest rate. 

Hello Brent,

Before we can give you sound advice on your situation we would need to know what your goals are. We can't give you a path without knowing what the end game is. If you paid off the 20 units would that get you there? If not than you would have to buy more  which means more debt to take on. If you haven't already done so I would advise to develop a plan. The number of units you own should correspond with how much cash flow you want. Property 1 cash flows $230/mo or $2,760/yr. per side. if you paid it off it cash flows $450/mo per side (after taxes and insurance) or $5,400/yr. And if the numbers were similar on all of your properties $5,400 x 20 units = $108,000/yr. Is that enough? If not you need to buy more before paying them off. It is difficult to scale without debt or partners with money. Good luck.

My response would be to use your 401K money to purchase the 4-plex. Individual retirement plans were developed for people who do not know how to manage their money and save for their future. Government designed it so the retirees would not be a burden on the government once they stopped working. A smart real estate play will always out perform what you are gaining on your retirement plan even after penalty and tax. You have to make sure the numbers pencil out on your real estate investment before you commit your retirement funds. Good luck.

Sounds like a good deal. Take the free money.

Can you have one lease and name the students as the lessors? They would pool their money each month to pay the rent, same as the utilities. At the end of the term, write a new lease with the new tenants. 

Couple of points:

Hire a cleaning service and build it in to the rent, this will keep the parents happy

Hire a lawn care service and build it into the rent, this will keep the neighbors happy

Install new smoke alarms, fire extinguishers, post emergency numbers

Decide 9 months or 12 months term you are going to offer. There is high turn over and most kids will go home for the summer.

If the current tenant is happy I would do nothing now, power wash in the spring, wait until it is vacant. Then I would replace the siding and paint the trim (check the windows while you're at it). Hopefully you'll get more rent.