All Forum Posts by: Account Closed

I am excited to see your interest in Pleasant Ridge. It is the neighborhood where I live.  I think you need more cashflow for things to make sense to me. What made you choose to look for duplexes rather than quads?  Usually duplexes have more of a house feel to them and quads are apartments.  Which can be good and bad. Probably bad from a livability perspective for when you are here for 12+ months.  But then good in that you should be able to find something that cashflows much better for you after you move out and continue to hold the asset. 

Depending on where option 1 is in Pleasant Ridge you should be able to rent for more than 550 a month. Might require a few updates from current condition though. 550 a month is more reflective of where the market was 3 years ago than presently.  

Make sure to have an agent pull comps on the property.  Putting aside the cash flow projections (which are indeed important) for a moment, the comps will tell you whether you are getting a reasonable deal, making money (equity) at Day 1 (i.e. buying below market value), or, paying too much.  

Many times, novice investors will be so focused on the cash flow projections that they forget to remember that Rule #1 is "make money when you buy".

Good luck!

@Account Closed

Thank your husband for his service.

A couple of other things to think about.  Will the properties have any Rehab needs?  You also need to account for minor repairs/maintenance that will occur.  I would recommend a minimum of 5% (depending on age and condition of the property).

Since you plan on using a VA loan (no down payment) your mortgage payments will be higher. Therefore, it is important you find great deals to make your cash flow goals.

Good Luck.  :)

I would look for a deal where you can get $100 cash flow per month after all expenses. If you can do that with the conservative approach that Kevin Siedlecki mentioned, you will be fine. Run the numbers for better cash flow and make that your offer.

Good Luck.

@Account Closed. 

I don't love either deal; I'd keep looking. You're working with a very tight margin on both deals. If you change your assumptions to be more conservative, say 10% vacancy, 10% management, and 15% capex, you're close to losing money. Those numbers are guesses right now, and other than management, there's really no way of knowing exactly what they will work out to in the long run. It might work out as you've put forward here, giving you a COC ROI of about 7% on deal 1 or less than 4% on deal two. If these were big deals where those small percentages were thousands of dollars, that might be acceptable, but for small multis with such limited cash flow, you're taking a big risk. A couple things go wrong, and you lose all your profit for a year or more.

So far so good!  Living in the building with my tenants has not been an issue at all thus far.  It is key to set up proper expectations with tenants, even more so because you will be living in the building. 

Hi @Account Closed I'd be happy to help as well. I've also got experience buying and living in four unit buildings, feel free to reach out for questions!

I sent you a pm

Hey @Account Closed

As a long distance investor in Cincy here's what I use to 'get familiar' with each block:

Crime: raidsonline.com - allows you to search crime up to 1 year - this speaks volumes and is a must-use, in my opinion. 

Neighborhood Scout - Gives you a good overview of the area

City-data - Use the map view to zoom into the specific block and it will give you more stats than you know what to do with. Vacancy, income levels, population - all great info. 

Most importantly reach out to as many locals as you can. I try to talk to someone living in the area at least once per week to help me understand the area/block. 

Good luck and feel free to reach out if you have any questions.