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Originally posted by "all cash":

Ravenwolf; ... I think you're on the right track, but you seem a bit like a newbie. Nothing wrong with that we all were at one time, and even the old gray hairs know that education never stops.

I'm as green as they come! :mrgreen:
I'm an information systems security architect (CISSP) by profession and have been doing technology work for over 13 years. Real Estate is all new to me but it's very exciting! I've just started reading about investments and such on this forum and prior to that I've just been tracking specific properties and seeing their values go up and down. Trying to read and understand the terms and lingo of the business.

I'm a quick learner though and look forward to understanding the Ins/Outs of this kind of business. As you mentioned, I think regardless of our experience, there is always room for growth and learning.

Net Worth, the difference between ASSETS, what you OWN, and LIABILITIES, what you OWE. I doubt that buying this duplex will increase your net worth, why is an experienced investor (seller) going to sell a cash flowing ppty for less than FMV?

Agreed. This is something I didn't think about and as was previously stated in another post, 'if it sounds too good to be true.. it most likelyl is.'

We still haven't heard from you regarding taxes, insurance and other operating costs. Until we know that it's impossible to tell if this is even close to being a "deal".

Almost embarrased to say I didn't take that into consideration at all! :oops: I'm learning to navigate through the MLS listings and read through those sections that list taxes, water/sewer, heating, etc. The good thing on this though is that I CAN fix everything within a house and have done that with my own. Plumbling, heating, electrical, flooring, sheet rocking, tiling, etc. Everything but structural things I can do and do well. (roofing, foundations, and stuff I wouldn't touch).

BTW, I think you had a question in your original post regarding lease terms. The leases that are in place will stay in effect for the new owner. Leases run on the ppty, not the ownership.

Part of your "due diligence" is to ensure that the leases are in order, not "ghost tenants" and that security deposits are accounted for, and transferred to you on closing.
all cash

This is interesting and I didn't know how that worked. Thanks for explaing it to me my friend and thanks for all the comments. I look forward to growing and some day helping others here also.

Best regards.

Originally posted by "wesley":

Generally,

You should not get into deals that don't cash flow.

However, that being said, if it truly is cash neutral, then
in the next few years the rents will probably be able
to be raised and then it will be cash flow positive.

There is also the potential of appreciation.

But....But....But....the value could go down near term,
taxes could go up, and rents stay flat, or you have
vacancies.

You have to be very financially stable to handle that. Are you?

Quite a bit to consider. In my previous post I mentioned about some references on the web I could read to understand and map out expenses and see if it's really worth it.

After considering the initial debt consolidation, I'm actually 8 months away from paying it off cash so i think I'll hold off on the 50k. The only thing I would have left is a 14k car loan out of that 50k which is very manageable. The CC's are what is killing me with high interest rates. But as stated, they'll be gone by Q1 07. During this time, I'd like to educate myself more and prepare myself for a purchase.

Thanks for the comments and any direction you can provide will be appreciated.

Originally posted by "wesley":

Ravenwolf,

I know you're excited, but slow done and figure the costs
carefully.

I agree and I'm trying to understand things and put them all done in writing and map out costs. There is quite a bit to think about and consider. Do you have any references and such on the web I can use as a template to follow?

Thanks.

Can someone explain to me why you would (or wouldn't) invest in a property to break even and not make any cash flow with the rent? Would this still increase your net worth and possible equity with the new property?

I'm trying to understand these terms as I go...I'm reading these forums and as much as I can on the internet before proceeding with my first investment. (see my other post below in a different thread)

Net Worth? (difference between assets - liabilities ?)
Cash Flow? (physical cash coming in?)

Anyone recommend a good rag to read on real estate?

Thanks,

Originally posted by "all cash":

ravenwolf, it may be good, but I can't quite figure out a few things in your post, perhaps you could clarify for us.

1. Each unit rents for $850 = $1700/month, not $1750.
2. How much down payment, closing costs etc? How much are taxes insurance, utilities? Any major systems needed in next 5 years?
3. What is the $50K you're talking about?
4. What is the debt consol etc you're talking about?
5. I see NOTHING in here that's going to increase your net worth.
6. Moving debt around isn't the same as paying it off. Extending the payment terms is not the same as paying it off.

Not trying to be too hard on you but there's not enough here to analyze.
all cash

Thanks for the quick reply... it's late and I'm exhausted to excuse my miscalculation. :(

1. Correct. 850 + 850 = 1700! :goofy:
2. The roof, siding and interior was recently remodelled. I haven't made an appt yet to assess this and verify the condition but that's on the list. In regards to costs - I'm looking at 100% financing on this without any money down minus closing cost expenses which will be paid by the seller.
3 & 4 - this is some debt consolidation and home improvements I want to make to my current residence.
5. Wouldn't my net worth increase when I assume ownership?? Property value worth more than listing/purchase price? Excuse my questions but just trying to understand assets & liabilities here for net worth.
6. True. But if I can purchase this property and the income can pay both by themselves, wouldn't that be worth it? As I also increase the value and equity in my own home by the improvements? Albeit, if I lose the renters, then I pay for it myself...

Thanks for your extended thoughts.

Good evening all.

Any thoughts on this? Is my thinking straight in regards to a sound investment and to assist in clearing my personal debt to provide more immediate cash flow?

I'm thinking of investing in the following:

[list]2 Unit Multi-family that is local to me (5 mins away)
Currently rented (how will this work with a new lease, etc) for $850/ea totaling $1,750.00 income in rent
A mortgage on this would cost me approx. $1,300.00
Revenue generated from rent $450.00
I also have some debt consolidation I'd like to pay off to free up some of my own monthly income. (pay off my car and CC's and do some work around my primary residence) - loan for $50k
[/list:u]

What I'm hoping out of this is to get cash back from the extensive bills I'm paying out with CC's and also increase my net worth with a new property that is currently rented. With the consolidation I'll surely be able to pay the mortgage myself in the event the tenants decide to go elsewhere.

I believe I've crossed all the T's and dotted the I's but I'd like your opinion. I have a few ideas going through my head but I wanted to start small first... test out the waters as to being a landlord and dealing with people before I proceed into more of an investment property.

Thank you for your thoughts.

Thank you everyone for the warm welcome. I'm currently looking at a place that is a 6-unit house on .63 acres of land local to me. All but 2 of the units are already rented including the first floor a daycare by itself bringing in $1440/month but has me thinking about liability?? The estimated cash flow is $4k/month with a list price of $375k.

Of course I'm hestitant on my first endevaor and I'm feeling the waters right now one toe at a time. :roll:

Hopefully my guts get stronger as I move into more properties after this one, if it pans out. Where there is a will... there is a lender. :)

Cheers. :superman:

Originally posted by "wesley":

Hello Ravenwolf,

And welcome to the forum. Will you do something for us?
Will you go into your profile and fill in the blank that gives
city and state?

That will then show by your name when you post things,
and we will know where in the country you're located.

Wesley,

Thanks for the reply. I've updated my profile accordingly and also provided my email address in the signature.

With the statement you made about being ready to go
in 90 days or so, you want realtors and others from this board to be
able to start networking with you.

I wish you all the best!

Thanks. I'd be more than happy to receive and increase my network in the CT area. My email is in the signature.

Best regards.

~rw

Greetings all.

I'm very interested in investing and looking forward to making my first within the next 60-90 days. I'm learning as much as I can and then I'm going for it. Win or lose.. I expect to learn a lot and look forward to further investments.

This site has some great content and exceptional posts to assist newbies.

Thanks.