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All Forum Posts by: Steve Adler

Steve Adler has started 7 posts and replied 26 times.

Post: Best route in my situation?

Steve AdlerPosted
  • Posts 26
  • Votes 6
Originally posted by @JD Martin:

Probably the only way you get there, "fast" as you put it, is to use that 250 as downpayment and leverage another million against it. 1.2 million with a cap rate of 9 - if you can find it - would get you $108k before you pay your note, and your note is going to be about $50-60k depending on your rates, which leaves you 48k-58k free. But you'll need to find some serious value-add right now to get that kind of cap rate or be in some shaky areas. In my area - which is no metropolis by any stretch of the imagination - cap rates are running about 6 on MFH and there's not enough SFH at good prices that you could buy with that kind of down payment here. In theory you could get 10 SFHs for $100k each, using your 250 as 25% down, and if those houses collectively met the 1% rule you'd be clearing somewhere around $4k (10 $75k mortgages+tax+insurance ~ $6k/monthly), but that's also a tall order right now. And I wouldn't say that would be "fast".

Yeah I apologize about my usage of “fast”. I meant in the next 2-3 years! Definitely doesn’t have to be a one deal transaction! 

Post: Best route in my situation?

Steve AdlerPosted
  • Posts 26
  • Votes 6

Hi everyone! I will summarize my situation. I have one SFH rental property, and 250k liquid. My cash flow goal is 4K monthly. Honestly, I want to get there as fast and smart as possible.

I have studied real estate for 3 years and I am ready to go all in. What would you do if you had 250k liquid with a cash flow goal of 4K monthly? BRRRR SFH? MFH?

I look forward to hearing from everyone!

Post: Should I pursue this?

Steve AdlerPosted
  • Posts 26
  • Votes 6
Originally posted by @Account Closed:

Did you say you can purchase the entire 6 units for $54,000? Is is a war zone?

You are only collecting $500 to $600 per unit for rent? 

Are any of the units currently rented and what is the current income?

Post all your numbers including your down payment, or will you pay cash.

It sounds like a super great deal for a person who knows how to do the project with the least amount of time and hassle, but the major problem may be the rents are to low to cover future expenses like the cost to clean and make repairs when tenants move, for water heaters, furnaces and repairs, roof repairs, etc.

No there are no war zones in my town. Drug use, but no war zone. This property is not on that side of town, it’s actually in a developing area. Yeah It would gross anywhere from 3-3500. The deal would be paid in cash.


I called the utility companies and for electric water and gas the total average is $624 a month. 

Post: Should I pursue this?

Steve AdlerPosted
  • Posts 26
  • Votes 6
Originally posted by @Matthew Crivelli:

You would have to fund the project with your own money or bring on someone with money. The purchase price is way to small for an intuitional/commercial lender to help with a project like this.

 Yeah we would be funding it ourselves!

Post: Should I pursue this?

Steve AdlerPosted
  • Posts 26
  • Votes 6
Originally posted by @Aaron F.:

My top questions would be the area/tenant class; will you hire management; and how are utilities split. Depending on those answers, it could be a nice cash flow property or a headache that doesn’t return much of anything. 

I’ll be honest I don’t know how to tell the tenant class. I’m from that town, it’s not in a bad area, but it’s not in the best area. The part of town is actually starting to develop a lot. I would manage myself most likely, and there are not separate meters so the last owner was doing an all bills paid gig. 

Post: Should I pursue this?

Steve AdlerPosted
  • Posts 26
  • Votes 6
Originally posted by @Ryan Howell:

@Steve Adler - I would say it depends. If those numbers are real, then it could be a great deal, but you need to be sure those numbers are good. I'd get it under contract and get some seasoned investors to look at it with you. You do need plenty of reserves. It looks like to me it likely would cash flow even with significant additional rehab costs, but only if you have the money to put into it. As far as the value, if you're buying on a commercial loan, they likely will lend on the rehab. On my recent purchase they lent 75% of the rehab costs and did an ARV appraisal to estimate value after it was completed.

The numbers are 100% real as far as I know so far. The seller wants 54k but sounds like he’d go lower, my contractor gave me an estimate (walked the property with me) and said 80-120k. He also coincidentally bid the project for the last owner, but the owner just didn’t have time for the project. 

I’m calling all the utility companies now to get accurate numbers. But I do share the concern with you, how accurate the numbers (rehab) cost is. Nothing is getting changed structurally, it’s just very run down. I’d love to connect with you more and talk about the property?

Post: Should I pursue this?

Steve AdlerPosted
  • Posts 26
  • Votes 6
Originally posted by @Peter Nikic:

I would say NO. 

You've never done anything of this size, it's going to take a lot longer and cost a lot more that you expect it to, it's going to cause you extreme pressure as time and expenses continue to mount, while there is NO income coming in.

If you have at least $200k in cash on hand that you're willing to put into this, I'd say NO. 

I have 200k cash for the deal, my biggest concern was just trying to figure out, how much would make it a deal, and how much would not. 

The money part isn’t the problem (honestly not trying to sound arrogant), my only concern is just that it is a big project, and like you said it’s going to cost more because there’s always stuff you can see. My contractor said around 80-120, but I was still budgeting for about 140 in repairs.

Post: Should I pursue this?

Steve AdlerPosted
  • Posts 26
  • Votes 6

Hi everyone,  I came across a 6 unit MFH. Asking is 54k, my contractor said it would be 80-120k to completely update the property (it is vacant, mostly cosmetic but still run down). The property would gross 3-3500 a month. Would you pursue this deal? 

Draw back is this would be my first big project, I've helped with flips before, but nothing like on a property this big. Another draw back is I don't know what the ARV would be, especially since there's not any properties like this around it.

look forward to hearing your opinion! 

Post: Would you leave your job in this situation?

Steve AdlerPosted
  • Posts 26
  • Votes 6
Originally posted by @Nicole Koch:

Steve,

Yes Sir I would Jump on Your Dreams I'm definitely not experienced in REI/REO ..I wish to be doing this one day..

But, You will regret not Trying , and No matter what you have Your Family and all and all Creating Happiness... For others/ pursuing your dreams thats the Ultimate GOAL

Best Wishes

 My thoughts exactly! I can not imagine how I would feel about myself 5 years from now if I didn’t jump on this opportunity!

Post: Would you leave your job in this situation?

Steve AdlerPosted
  • Posts 26
  • Votes 6
Originally posted by @Brian Armstrong:

This looks like an awesome opportunity, but make sure you are thinking things through. What is your goal in real estate? Do you plan to continue working as a an agent after the year is up? The reason I ask is because while 200k is a lot of money, you will not be able to live off the income that that money makes you as an investor. So you need to ask yourself do I need to start generating income with this 200k? Or is it going to be used for the start of a long-term portfolio? If you want to survive off that 200k you will most likely to choose an active strategy such as flipping or wholesaling to generate your living income. If you put it in more long term buy and hold stuff then you will likely need to continue a real job for quite a while.

Just some food for though.

I would plan on being a realtor for forever, even after being financially free. Real estate is a true passion of mine and something I could see myself doing for forever. I would always be a realtor, and use that 200k to flip, and brrrr properties.