All Forum Posts by: Mark P.

John, I am south of St. Louis. I have been in the game for 3 years now and have 5 properties. I have a owner financed, hud, homesteps, and conventional loans all rented and all cash flowing. From what I read here on BP I can tell you things are a little different in the Midwest than on the coasts. Find a small bank that does loans in house, like someone said above. That's your best bet. Once you build a relationship with that banker you can call and say, "Hey Bob, I just bought another house. Send a pre approval letter to *****" you won't look back. I drive by the big banks with my middle finger out the window! (Figuratively speaking) Mark

Hey BP...I bought my first property in 2012 with a goal to buy a property every 18 months to 2 years. I have exceeded that goal by buying 4 houses in two years. I have been a victim if my own success in that a great deal came along and I wasn't totally financially prepared because I just bought, remodeled, and rented a house last September, so I got a partner. Does anyone have a good partner agreement they would be willing to share? Thanks...I wound write more but I'm on my iPhone!

Bought one half price. Living in it for one year IAW contract. Convert to rental after one year. Then I will start shopping for another!

Not allowing an aav is absolutely crazy.

Boom...thanks Aaron. I like that answer.

I bought a house on the Homesteps program. I got it at 50% to 60% market value...$40K. I am living in it according to the rules for 1 year. I have made numerous improvements, probably doubling the value to $80-85K based on comps.

1. It's a great house. It's a great long term hold. Probably cash flow $400 month off of it, however:

2. I could sell it and take the $40K and buy 2 to 4 more properties. Although there isn't 4 available right now, the come available periodically. Foreclosures in my area average $25K to $40K and quickly rehab to $60 to $80K. 4 more houses would double my cash flow to about $800 if 100% rented.

It's just such a cute house, in such a great location (on a double lot on main street caddy corner form the high school), and I have put so much work into it I hate to sell it. One of my kids might like to have it one day.

You could add on a double car garage on the lot next door and put an efficiency apartment on the back. The lot is too skinny to build another house (unless it was really narrow) with the easements. It has off-alley parking. BNSF railroad has a stop in our town and many RR workers like to just have a small place to get their mail and sleep when they are at home.

A real capitalist would flip it and buy more, or take the $40K and buy an apartment building or something. Maybe even build a spec house and sell it. But sometimes a bird in the hand...

Thanks in advance.

I have a friend who owns several (couple hundred) and wishes he owned houses instead. Collecting, high turn over, locking out late payers every month, bad checks, cleaning out abandoned units, mowing, door damage moving in and out, phone calls people asking for units, phone calls asking for rent, and by the time he pays utilities, mortgage, property taxes and liability insurance he says there isn't a whole lot left. That's one side of it.

The balloon payment is not big deal. A friend was helping me out and the cash flow from the home will cover the down payment on the refi.

If you have read my introduction, I explained my situation. I got started with my first property with an owner financed deal. It was already rented with long term renters that write me 6 months of post dated checks at a time. He gave me 2.9% for 5 years, with a balloon payment due at the end. After PITI it cash flows about $160 a month.

I consult part time and had built up some cash for my balloon payment faster than I thought I would, so I bought my second property a year later. A $65K house for $45K. I rented it the first day I put the sign out to a great young couple getting married this month. It also cash flows about $160 a month.

Funny enough, I was renting my house. I am divorced and was just staying in my youngest child's school district. When he graduates in two years, I was going to move but I just bought a Home Steps home that was too good to pass up. I close next week. It is a $72K house on a double lot right on main street. Everything has been remodeled except the kitchen. I plan on living in it for a year according to the rules, then renting it. It will cashflow after PITI probably over $200 a month.

I live in a small sleeper town outside a city, so don't laugh at my numbers. My $65K house is an all brick, three bedroom on a double lot right off main street. The $72K house is a four bedroom.

Here is my question. All my loans through a small town bank that keeps their loans in house. I appreciate that, because big banks are so difficult to deal with. However, because their loans are kept in house their interest rates are a little higher and the terms are 20 year variable, readjusted every 5 years. I got a 4.75% and a 5% respectively. I think, for rental property, that's pretty good.

What is a good long term plan? I have the balloon payment coming in in 3.5 years. Should I try and consolidate all the loans into one large loan? Should I find a bank that will give me a fixed interest rate since rates are rising? I would like to keep buying SFH rentals and maybe accumulate a portfolio of 10 or so, or get to a point where I could hire a PM.

Thanks everyone in advance. I appreciate any advice.

MP

Jeff hit the nail on the head!