All Forum Posts by: Sawyer Nyquist

As someone who is closing on his first duplex in the Lansing area in a just a couple weeks this makes me nervous! I think I would be pretty discouraged if my first tenant in my first unit didn't pay rent the first month.

Any 20-20 hindsight advice from this experience? I will be renting out a property in the next 2-3 months (after we renovate the unit)

Thanks David. 

My estimate for insurance is also in the high side, as I have seen comparable quotes for 650. So again, hope that my estimate is high. The 850/Mon is probably middle to upper half of rents in my area. With the updates I hope I can landed on the high end. Also, my realtor gave me 850 as an estimate. Do you guys use any other tools for calculating rent?

Sarah,

We have plenty of reserves if something goes bad in the first 18 or so. But we are hoping to use the reserves to move on a second property after several months of building a CAPEX buffer.

203k loans seem like a mixed blessing, for some of he reason you mentioned My lender has been pretty helpful walking me through it, but we are still considering doing more of the work ourselves and doing a much small or no 203k.

With vacancy, I see you are in Ann arbor. Do you find that school year is a big favor even when you are outside of the "college" market? Even for families just trying to move before kids start school ? I hadn't thought about the timing of our vacancy, and it seems likely that we won't have the second unit ready to rent until early September. We will see how that goes! 

Hello BP,

I am under contract on my first deal in Holt, Michigan (just south of Lansing). Its a 2/1 duplex on a 1 acre lot just on the outside of town. My family and I are going to move into half and rent out the other half. We plan on living there for 1-2 years before moving out, so I am trying analyze the deal as if we were renting out both units (is that the best play?). The property needs some updating and so we are looking to put 15-20K. Nothing major, just paint, floors, counter tops, most of bathroom and part of the other one. We are in the process of getting quotes from contractors so my estimates will be more firm soon. 

Here are the numbers; happy to hear your thoughts.

Purchase price: $105,000 (with seller paying 3k of closing costs)

Repairs and closing costs estimate: $22,000 (we are doing a 203K so this will be wrapped in the loan)

Cost Basis: $127,000

DP: $4,445 (3.5%)

Loan: $122,555 ($557 monthly payment)

Rent: $850 per unit, $1700 total, $20,400 minus 10% vacancy (high estimate) 18,360 GOI

Annual Expenses: 

Taxes: $4400

Insurance: $800

Property Management: $2,040 (10%) We will be managing the property ourselves, but we would like this budgeted in for down the road when we might transition to property management.

R&E: $1,500 (roughly 7.5% of annual income)

Capex: $1000 (roughly 5% of annual income)

No water or sewage as it is on a well. 

Annual Operating Expenses: $9,740

NOI: $8,620

Debt Service: $6,686

Annual Cash flow pre-tax: $1,934 ($161.14 monthly)

I tried my best to overestimate on expenses, so I am optimistic that my total cash flow will be higher than $161 for both units. Any thoughts on this buy? Did I miss anything in my analysis? 

Sawyer 

Hi Tim,

Wish I could help you out on this one, but I myself am also looking for an accountant in the area. I am moving to the area in the next couple of months and in the process buying my first investment property. 

I guess, I will just one-up Tim's request for account recommendations. 

Sawyer

Thanks for the thoughts Mark. Those are certainly creative options that i had not heard of or thought of before. I am doing a little digging into both those thoughts. 

I have had a couple other ideas of ways i might be able to get started. 

1) Would it be helpful for me to put up my $500 just to get in on a deal with other investors and learn some about the mechanics REI? OR again is my $500 too little to really matter.

2) I have seen posts about buying land for a few hundred dollars. Any thoughts on that as a beginning investment? 

Hello,

I am just jumping into REI. I have been doing research for several months, and now i am trying to figure out how to get my foot in the door.

Current problem, is I only have about $500 to get going with. Obviously, not a lot to work with. Anybody have any thoughts on how I could even get started with so little money? Do I just need to sit back and try and save for another year or so and try again when I have more?

I am based in East Dallas, and looking into properties in my area. Probably buy and hold, SFH but potentially small multi-family.

Thanks team! 

Sawyer