All Forum Posts by: Shaye Mora

@Blake Lowderman

@Dave Grimson 

Congrats on the purchase, Dave! Solid purchase price and amazing cash flow number. Best of luck on your next investment purchases!

@Minh Nguyen House-Hacking is a great opportunity for living for free and potentially cash flowing on top of it. There are programs out there for 3%, 3.5%, or 5% down payments if you can't afford the 20-25% DP. 

As you many not be as leveraged as you want to be, you can look at the other end of the spectrum; your cash-on-cash return. Little cash down and actually having reserves in your bank for any miscellaneous mishaps or repairs isn't always a negative thing.  

Keep in mind, when you go to sell a multi-family, you're most liking going to sell it back to an investor. Where as the condo, you might be able to sell for a higher price and potentially sell faster. 

Another thing to take in consideration, multi-families have the opportunity of bringing in revenue if one or multiple units are vacant, where as if a single family or condo is vacant you produce no revenue until a tenant is in place and under contract. 

Best of Luck!

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $85,000

Cash invested: $3,750

This is my first property I bought for my portfolio, which I'm currently house hacking. Once I move out, this property will be cash flowing $385 monthly. Maintenance, Management, & Vacancy are all factored in @ 10%.

What made you interested in investing in this type of deal?

Since recently graduating, I knew I wanted to get out of my mom's basement as fast as possible. After studying REI and staying in tuned with BP, I knew house hacking a duplex was the way to go.

How did you find this deal and how did you negotiate it?

I found this deal through the Realtor.com app, or you can say the MLS. Asking Price: $89k. I shoot an offer of $75k and got countered with $89k (Seller pays closing cost) or $86k (Buyer pays closing cost). I tried negotiating $80k (Buyer pays closing cost), which got countered to $85k. We both agreed and signed the offer papers for $85k (Buyer pays closing cost).

How did you finance this deal?

Shockingly, after 3 different lenders, I found the best interest rate and the best deal a loan could offer. I locked in an interest rate of 4.5%, down payment of only 3% for conventional, and this mortgage DOES NOT require a PMI payment monthly. Shocking, right?

How did you add value to the deal?

Since I'll be living on one side for a year, I have the opportunity to see what a tenant is going to like or dislike when living in this unit. Therefore, I will be able to fix and update the one unit to appeal some long term tenants.

What was the outcome?

Outcome of this property was to finally get me into the market of REI, and get me out of my mother's basement at the age of 22. They say the first deal is the hardest and I truly got to see that side. Now that I've been through the process, I know who I want to work with, the properties & areas I truly want to buy in, and how to make the closing go more smoothly.

Lessons learned? Challenges?

1. Shop around for the best lending options. Don't settle on one lender. My first lender told me I needed 15k in my bank account and an interest rate of 4.75%. I closed with $3,750 with an interest rate of 4.5%.
2. Find a realtor you can be open with and have fun with. Yes, there is a professional side of this, but you want a realtor you can be open with and can joke with. Also, find one that is proactive in not only just their emails but texting too. Texting is a faster approach

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Ruhl & Ruhl Realtors out of Quad Cities IL/IA.
Ruhl Mortgage out of Quad Cities IL/IA.
TBK Bank out of Quad Cities IL/IA.
Insurance Broker, Blake Driskell out of Macomb, IL.

@Tyler Kress - I personally don't know one. I'm sure someone at the meetup next month can point you in the right direction for one. 

Tyler - As I mentioned at the meet-up, everyone views this topic differently. 

I believe property management should only come into play when you get a decent size portfolio and you can't handle the workload or if you're an "out-of-state" investor. QC is also known for their horrible Property Management industry, therefore it would be best for you to oversee your tenants and property yourself.  

Managing 1 or 2 properties yourself won't be so bad. Since you're first starting out, I would suggest doing everything yourself - management wise. Not only will you save that 8-10% monthly, but you'll also learn so much over that first or second year. (You can also pocket that 8-10% for managing the property yourself)

Things you'll learn from managing the property yourself:

1. Property Showings

2. Screening/Reading a Tenant

3. How to collect payments 

4. Contacting Subcontractors / Creating Relationships

5. Save labor cost on scopes of work you believe you can handle

6. Inspecting your properties quarterly to make sure they're not completely trashed

7. Etc, Etc, Etc 

Hope this helps with your questions stated above. If you're worried about not having a lease agreement or any type of template - reach out to members at our meet-up, reach out to people on BP, search BP's Tools > FilePlace, or even search google for some. There are many individuals out there that have been in your shoes before that are willing to help you and share documents they use.

Best of luck & looking forward to seeing you next meet-up,

Shaye Mora

@Blake Lowderman

Welcome to BP, Ross! BP is a great tool for networking, educating, and growing your RE business! Come out to the QC Real Estate meetup on March 19th. Looking forward to meeting you!

Congrats on your first deal! Keep everyone updated on your next out-of-state investments. Best of luck in your venture of Real Estate Investing!

Keep it up, Samuel!