All Forum Posts by: Robert Fountain

Thank you very much. This is a definite starting point

BiggerPockets has a great renal calculator that you can use to help you determine if the rental is a good deal or not.  

https://www.biggerpockets.com/buy-and-hold-calculator

Hi Everyone.  I'm just starting out and I'm running into a roadblock with my business plan.  I've searched around,  looked at some guidelines and tried to take a stab at creating one but I'm stuck.

Since I'm new to the REI scene I really don't know what to include. My target area will be buy-and-hold and I'm looking towards seller financing ant private lenders.

Any tips you can offer for how to structure a business plan for someone in the REI infancy stages would be great.

@Ayodeji Kuponiyi Thanks for the information

@Eddie Aracena thanks for the info.

@Charles McCabe great advice!  Thank you so much. 

I'm looking at buying my second rental and this time I'm going to go with a private lender.  The good news is that I have some great connections from my previous job.  I have a great relationship with the previous owner of the company and he just happens to be a private lender.  

My question is, should I find a deal first before approaching him or should I ask him out for a cup of coffee and discuss my plan and see if he's on board?

@Charles McCabe you are correct. there is no equity in the property and we are underwater.  We are able to front the mortgage whether the property is occupied or not so that's a big plus.  That's why we want to take our capital and try to make some money with that.

Regarding PMI and property taxes. We are not paying PMI which is good. I also had our property taxes reduced 2 years ago which was successful so that's another plus.

The rent definitely at market rate but we have not increased the rent ever.  After reading the books from Brandon and doing my research, we should be increasing the rent since costs rise.

So here's a big question I have. Now that you mentioned possibly paying off the second mortgage to maybe start improving my bottom line should I do that or buy another property? 

 I can find some great deals in my area.  There are many multi-family units in my area that can offer a 12% CoCROI.  I have some connections and I believe I can get a private lender or some owner financing.  Would it be smarter to go that route and purchase a property that will generate cash flow or make my current property generate more?

Thank you in advance

@Charles McCabe, thanks for the welcome. I'd be happy to share info on my rental although it's not what you (or anyone else) would call profitable. 

My wife and I bought the townhouse in 2006 right after we got married, right in the middle of the bubble.  We were young and didn't have a lot of money.  We financed with an 80/15/5 mortgage because that's what we could do.  We figured we "had" to buy now because prices were going up daily and we would lose our chance.

We lived in the townhouse for 8 years had a child there. In 2013 we moved out of state and, since we couldn't sell due to the bubble burst we decided to rent it out. We've had steady tenants since and they cover the cost of the 1st mortgage. We front the second mortgage as well as HOA fees (30/month).

We are much more financially stable now. My wife and I make good money and have steady jobs.  We have some saved and since I've wanted to get into real estate investing for a while now I decided no longer to "want" and to actually DO IT!

I would love to make my current rental profitable (or at least break even) as well as purchase another property. I'm looking at multi-family.  If you would like more information please let me know.

@Mohit Madaan great points.  You're absolutely right.  I'll be going :)