All Forum Posts by: Sam Tato

Hi Derek, welcome! I'm also a new investor and I had some recent insight that I wish I knew when I bought my first property a year ago.  I'm not sure what type of financing you are planning to use but I'll tell you what happened with me.  I used a 5% down conventional loan to purchase a double in the 14216 Buffalo area.  The only reason I was able to get 5% down was because I was going to be living there and there are special terms and rates for owner occupied.  I'm now looking for a second property and I was hoping to move into the new one in order to secure the same type of financing.  What I have come to find out is that banks will almost always see the second multi-unit property as an investment property, which requires 25% down, and will not acknowledge owner occupied status unless there is a very good reason for you moving (i.e. closer to work for a shorter commute, moving to a single family from a double, more space for a spouse and kids, etc.) Since I am looking in the same area I have no credible reason to obtain an owner occupied loan and will need to use investment property financing.  

I work in the city, so in hindsight I could have bought a property in the suburbs and then bought a double closer to the city as my second property using owner occupied financing and use the reason that I'm moving much closer to work which saves time and money (gas).  But, since I didn't do that I will now need to use a 25% down loan for my next property and I am looking for private money much earlier than anticipated!  Plans change! 

Hopefully this will save you from the misconception I had!

Hi @Tristan Cortez, if you're looking for the blog post by @Ben Leybovich here is the link: 

We’ve Done the Math: You Can’t Make Money on $30,000 Houses. Here’s Why…

I took the same approach as outlined by Ben in that article.  I own a duplex in Buffalo, NY that is almost 100 yrs old.  If you want to take a look at my spreadsheet you can check it out here: 

Cap Ex Spreadsheet

These numbers assume that everything in the house is brand new (which isn't the case) but it keeps it simple and gives an appropriate approximate number.  My monthly Cap ex reserve came out to $400 per month, $200 per unit.  I wouldn't use a per unit number though since many of the big items are for the entire property such as roof and siding... thus a building with more units will have a lower cap ex reserve per unit since they are all sharing the cost.  I'm not very experienced but this approach made the most sense to me.  Hope this helps!

I'm not sure if this exists somewhere already but I couldn't find anything in the FilePlace. This is my Maximum Purchase Price Calculator for buy and holds. Basically it looks at your desired Cashflow and determines what is left for your mortgage payment. Once you put in an interest rate it will calculate the Present Value which will give you your MPP. I created this because I've heard many people say that one of their minimum requirements is a certain amount of Cashflow per unit (say $100) at 100% financing. This calculator will allow you to quickly see your MPP based on your minimum Cashflow requirements.

There are some limitations. For one, it only allows you to put in one loan... But I hope some of you can give suggestions on how to expand and improve the spreadsheet.

Hope you guys find this useful!

MPP Calculator Based on Cashflow

@Kristopher Raepple @Mark Nolan @Linval T. @Kate H. Thanks for the welcome!

Hello everyone!

I've been hanging around BP for a while but just now introducing myself. I'm 22 yrs old from Buffalo, NY. I bought my first property (double) last year in Aug, 2014 in the North Buffalo area. I live in one unit with a roommate and rent out the other. Technically I live for "free" with rent well over my PITI but after cap ex reserves, maintenance, and rehab it isn't exactly free! Regardless, I think it was a good first deal and it continues to provide a great learning experience, especially since I'm able to rent to friends and learn to landlord with a lower risk. By living in one of the units I was able to get a 5% down conventional loan. A requirement of this loan is occupying the home for at least one year. That year will be done in Aug so now I'm working on different systems to help me work more efficiently avoid mistakes when I acquire my next property (shooting for Fall this year).

I look forward to being able to give back to this awesome community!