All Forum Posts by: Steve C.

Anthony-  That's interesting...40%.  That's not far off for my home.  Is there any science behind that or just something you came up with?  

Thanks

Tahra-  Thanks for the info.  In the case of my current home, the 12 months of statements we reviewed were not helpful because they were presented as if it was while someone was living in the home....it was vacant.  

Is there any way to access utility bills throughout a property's life?  Maybe going back a few years instead of a few months?

Thanks

I want to buy a $150k-$200k mixed use investment property.  The first floor is going to be office space for my practice (Sex Therapist) and the second I want to be an apartment with separate utilities that I can rent out or use for AirBNB.  

I already own a home but it was not occupied prior to moving in.  We did not check to see what water, electric, etc. was each month and just took the prior owners' word for it being "cheap" to heat.  And we really just winged the purchase which wasn't smart.  Came to find out the radiant heat in the ceiling was close to $1k/mo to run and wasn't heating the house well at all.  The water bill is doubled because a separate company owns the pipes and the city provides the water/filtration, etc.

That was close to 10 years ago and, in the beginning we had a few close calls but now we are in a completely different space and doing really well.  

But I know what I currently bring in each month and I want to make sure I can comfortably afford the property prior to purchase.  

How do I figure out with some degree of accuracy, what my monthly expenses will be  for whatever property I buy?   Not just utilities but also factoring in the mortgage, maintenance, etc.

Thanks!

Over the past few years my business (sex therapist) has really taken off.   I started by doing it a few hours a week at night and now I've kinda hit a ceiling because I'm doing it 20-25 hours a week in addition to two other 20 hr/wk part time jobs.  The one consistent struggle I have had is finding a steady flow of day-time clients.  Everyone wants nights and weekends save for a handful of people.  

On the financial end of things my goal was to save ~$60k, use that as a down payment on an investment property with 1-2 units on top of/attached to a office space I could use for my practice and bring other counselors on board as contractors that will work for me.  My thinking is that the rental units could pay the mortgage, tenants pay their own utilities...maybe with a surplus from the rent payments that could be accumulated and used for any repairs/maintenance needed down the road.  And then the office space could generate some income from the other counselors as well as the bulk from my own caseload.  

The struggle has been, since the money has been rolling in, instead of saving as I had been doing we started soaking a bunch into our home for much needed repairs and updating....new windows all around, ductless mini-split system, etc.  Over the past year alone I've spent around $25k on our home.  It's all bought/paid for so no debt from it.  While I could just keep saving and in another year or two be at $60k....I'm wondering if some sort of refinancing or home equity loan would be  one option to shortcut the timeline and allow me to buy my building sooner?  Home is worth between $225k and $250k (without knowing exactly where the market is since 2012 and what all the work over the years has added to the value) and we have $160k left on the mortgage.  I'm okay with going back to the beginning of the 30 years if it means I can buy my building because that's when I see we can really grow and ultimately pay off the mortgage far sooner anyway.  

...or is that a really ill-advised/careless idea?  

Any thoughts and/or ideas would be much appreciated! 

Thanks! 

HML= Home Mortgage Loan?

Sustained income is what I see happening once the loans are paid off, and despite the lack of a tax break...I definitely want the building(s) paid off so that, once I'm dead, my son/family isn't stuck having to make any ends meet or sell property due to a lack of income.  

I don't necessarily need the freedom from the 9-5 job until I want to retire.  I love my job!  

Thanks!

Steve

I see where you're coming from.  My hope would be that, just as bad tenants can sometimes be avoided through a complex vetting process, buying a building that's in great shape as opposed to a fixer-upper might allow for some repairs, but certainly not all, to be reasonably worked into a budget.  But like you said, sometimes things don't go according to plan.  

I'll say that if a lot of big items keep needing attention...rather than being a buy once/cry once deal...maybe I'm not doing my part or the building management company isn't doing theirs.

Off topic but how do I contact a mod?  No problems....but I don't see any options on the site to reach out should the need arise.  Thanks!

I'm not sure if you read my reply right above this post, but I definitely have more homework to do.  LOTS of it!! And one of the worst moves I could make would be growing too fast and not be able to meet some demand, whether that's a repair, attention to my practice, time in court, etc.  

But to your point about chipping away at the pot... I'm thinking that if I can live off of the income from my practice and let the apartments be their own self-sustaining animal...can't really chip away as it would constantly be replenishing itself no?  Doesn't seem to be the self-licking-ice cream cone that storage units are but maybe something that the rental fees could continuously pay for the management company, repairs, etc.  

That is kind of what I'm doing now.  I live off of my 9-5 jobs' income and then squirrel away the money from my practice into a GS 1.20% savings account.  Somewhat apples to oranges compared to owning apartment buildings but hopefully that rubric can be applied.

Thanks

Steve

This seems like logical advice.  Personally, I think I'll be too busy seeing clients and getting more counselors in the offices so I won't have the time to shop right off the bat.  And from what I've seen others in my field do it takes a solid two years until everything from the transition to calm down.  Then the stability will be my indicator to start shopping again.  

Right now I'm saving for a down payment.  That way I can get a better interest rate.  However, a loan officer told me that another way to do it is to just go off my credit and then use the building as collateral.  I'm not sure how popular that route is, but so long as I can make the mortgage payments and my credit stays good, seems like the sky is the limit with how many properties can be bought.  

Definitely do NOT want to get ahead of myself though.  And any more than a few properties and I'm guessing I'd need a very solid management company as part of the equation.  While I have a LOT of experience working on apartment buildings (repairs, painting, flooring, etc.) I'm a counselor (sex therapist) by trade...not a landlord and repairman.  I wouldn't think I could run both a full time practice AND manage 5 buildings.

In my field (counseling), I've been working for almost 20 years.  While the salaries have been low, up until this year when things really spiked, the retirement plans and money able to be set aside was just embarrassing!  It's to the point where, had things not changed for me as far as my income/earnings...I'd have had to pick a new field or else by the time I retired I'd have enough saved up to support me for a year or two at most.  

As I said, now I'm in a very different position financially and I'm saving up to buy my first rental property.  It'll actually be an investment property that will serve two purposes.  First floor will be used for my practice for office space.  Second and possibly third floors will be for 2-3 apartments/units that can be rented.  

At this point my plan is to let a portion of the tenant's rent pay off the mortgage.  But thinking ahead...if my plan works and I develop the ability to buy multiple properties....lets say having a total of 15-20 apartments spread throughout 5 or 6 buildings in my area... maybe that could produce a very comfortable continuous income for retirement??  

I figure that in 20-30 years all the mortgages should be paid off and whatever I get in rental payments, aside from the big chunk of repair/insurance/legal costs...should be 4-5 figures each month.  

Does this sound realistic and can anyone speak from experience as to how this works...or doesn't work?  What would help me to learn, work towards, etc. that could make it work?

I tried posting this in the "Buying and Selling Real Estate" forum and got no responses/help.  Hopefully this is a more appropriate forum for the topic.  If it's not, can someone please let me know where would be the best place to post it?

What I want to do is buy an investment property with 2 or more apartments on top of a main/ground floor that I can use for office space for my business (counseling practice). As the business grows I want enough space so that I can either rent office space or have others working under me. Then I'll use the office for the duration of my career. While purchasing additional properties might be on the table in the future, it is not my primary focus right now.

I've begun to educate myself on properly screening potential tenants, taxes, codes/laws, leases, insurance, and budgeting. I've also opened a savings that will generate 1.2% and will use that and some other money that's invested to build the down payment up over the next 2-3 years. I figure I'll save up $50k-$60k+ and then buy a $200k-$250k property in a specific part of town.

A little about myself...I first started to work by maintaining my family's apartment buildings at the age of 10 and continued until I went to undergrad. Jumping ahead...I now own a home, work 3 jobs...1 of which is my practice out of two different locations, and do most of my own auto/home repairs and maintenance, and have perfect credit. Right now, the 2 jobs pay our bills and I am saving 100% of what I make at the practice and have been for 5-6 months now.

I've worked for and have spoken to a handful of other people who have done exactly what I'm looking to do without significant difficulty. Elsewhere, concerns about noisy/disruptive tenants, working where collecting rent, etc. have been expressed. Again, through the education process I'm hoping to avoid whatever nightmares can be avoided and deal effectively with those that sometimes can't.

I tried educating myself on different aspects of a mixed use business/apartment investment property but the terms and phrases I used kept yielding irrelevant results. The majority of threads/articles/etc. pertained to people looking to make a living from buying investment properties rather than those who just wanted one property to use for another business and letting part of the tenants' rent pay the mortgage. I'd greatly appreciate advice based on experience and maybe some terms/phrases that would improve searching throughout the forum.

Thanks in advance!!

Steve