All Forum Posts by: Thomas Brady

Hey Bigger Pockets! 

I just had to post this because I'm very happy to say I just completed my first deal and bought a duplex in Charlotte. It is an FHA loan and I will be living in one side of it.

Here are some stats on it. 

Price 183k 

Each side will rent between $1,000-1,100 

Plenty of room to add value and possibly raise rents, not to mention I will be living there paying nothing except maintenance and utilities! 

from all my calculations, the cashflow with a property manager will be around $250-300 when I move out so I am pretty happy with that. 

Thanks to everybody that gave me advice on my deals and the bigger pockets community as a whole. I'm officially an investor! BOOYA!!

-Tom 

Hey Dawn, 

The Water heater, roof, and A/C are 13 years old, so I would imagine they will need replacing in the next 10-15 years or so. Tenants pay all utilities and the duplex is separately metered. 

Thanks 

Hey BP, 

I posted last month about a Duplex on the market for 280k that produced $1,250 on each side in a C or C+ location, definitely trending up. I am certain I can bring in $1,300-1,400 in rent, but I am sticking with $1,250 to be conservative 

Anyway, the price has dropped down to 240k and my target price of 210-220k is looking possible.

I am putting 5% down and living there for the first year (the numbers are for when I move out) 

Some quick numbers. 

Total Rent: $2,500

PITI: $1450

Vacancy: 10% 

Maintenance: 10%

Cap Ex: 10% 

Total Expenses: $2,210

***Note: I have reviewed the 1040 Schedule E, and the reported expenses were not even close to the numbers I am accounting for, but I'm sure it will go up as the structure ages. built in 2002

So by my math, I should cash flow around $290/month. 

Does anybody see anything else I should be looking at, or does this deal check out as a good deal.

Hey BP, 

Here is a deal on a 4 apartment bundle I am looking at. 

asking price $185,000 (prob can get down to $175,000)  

plus $20 HOA per unit/month that covers any damage to outside of units including roof replacement.

Total monthly rent $2,800 (conservative) $2900-3000 (realistic)

all expenses accounted for (50% rule) and mortgage comes out to $2250 (this includes property management) 

Net profit would be $550

The only set back is that it isn't in the best area.... definitely not a war zone, but probably C or C- 

Any advice on this deal, because the monthly cash flow looks fantastic, I am just unsure about the area variable. 

Hey BP members,

If you have read any of my other posts this week, you know that I am closing in on making my first real estate investment. It has ultimately come down to two different duplexes. Both have their ups and downs, so before I make a decision on one, I would love some advice.

Once again, I won't bore you with the nitty gritty details, but here is an overview.

Duplex #1 This duplex is 4,200 square feet with a total of 8 bedrooms and 6 bathrooms. It is right near the university in what I would call a C or C+ location. I would rent it by the room to maximize rents. after all expenses are accounted for, it would most likely cash flow around $500/month....perhaps as high as $750 

Duplex #2 This duplex is  2,500 square feet with a total of 6 bedrooms and 4 bathrooms. It is in a fantastic location that I would say is nothing less than an A. the only problem is that when I crunch the numbers on this one, my cash flow is only around $100/ month....maybe as high as $400, but I'm trying to be conservative. (although they did just put a new roof in, so my capex budget might be a bit high.)

So my question is this: Do you go after the higher cash flow in the worse area (not that it is by any means a war zone), or buy in a great location that may not cash flow as well, but is almost certain to appreciate over the long run.

Thanks!

Hello Bigger pockets! 

I have a question regarding renting to students. There is a really nice duplex near the University of North Carolina at Charlotte that I am interested in. it currently rents for $2,500/month. $1,250 per side. Which isn't bad because after I calculated all the expenses, it came out to a conservative $200 cash flow per month. not great, but not bad. 

I recently listened to the BP podcast "The riches are in the niches" and was very impressed with the concept of renting by the room in student areas. This duplex is literally 3 miles down the road from the university and is currently being rented by college students. 

I checked Craig's list and looked up renting by the room rates; I found that most rooms are renting anywhere from $350-500/month. This duplex is a 4200 square foot 4/3 duplex (4/3 on each side) 3 of the bedrooms have their own bathrooms. I figure I could conservatively rent each bedroom at $350-375/month which would bring my monthly rent up to      $2,800-2900/month. 

Does anyone have any experience renting a property by the room? are there any downfalls to this, because from my math it would give me an extra $300 in cash flow per month. 

Thanks everyone, 

They are asking 250K, but I am trying to get them down closer to 235k so the cash on cash isn't too bad, and I was trying to be pretty conservative with my numbers. 

I could be wrong, but I feel like most people don't reach the 50% rule on single family properties and Duplexes, It seems to be more common in actual apartment complexes. 

either way, I accounted for 50% and it came out positive, so hopefully the actual cash flow will be greater. 

Hey Everyone, 

I have been looking at several duplexes over the last month and have a question about the 50% rule and location. 

I won't bore everyone with the calculations, but after my mortgage and the 50% rule, I am only cash flowing between $50-100 per month. (although they just put a new roof on and the current Hvac is in good shape, so capex may not hit for a awhile) I am also putting 5% down and using an FHA loan, so I'll be living on one side for a year. The $50-100 is when I move out.

Normally I would look at a property like this and consider it a sub par deal, however this duplex is in a GREAT location. I'm talking A to A+ location, so I simply don't see the property value going anywhere but up (over the long run of course) my uncle bought a house around here about 20 years ago for 60k and today it is worth over 250k.

My question is if anyone has any advice on buying a property with lower cash flow in exchange for a fantastic location. I have looked at some great cash flowing duplexes, but they are in less than desirable locations. If anyone has any experience with a situation like this please let me know. 

Thanks! 

thanks a lot guys. I'll request that information from the seller. 

Hey Everyone, 

I have been working with an investor trying to find a good rental property to go in on and I think I might have found a diamond in the rough.

Here it is: 

Asking $582,000

12 unit 3/2 apartment building

All units rent at 900/month so $10,800 monthly or $129,600 gross yearly profit 

20% ($116,400) down at 4.1% over 30 years = $2,250 mortgage per month 

50% rule deducts $5,400 

Total costs: $7,650/month which leaves $3150 net profit per month or $37,800/year 

COC return: $37,800/$116,400 = 32.47%

These numbers look very strong to me, but once again I would like the eyes of seasoned investors to look them over an see if there is anything I missed. 

FYI: I rant the numbers using a 70% rule and it still came out in the black. 

Thoughts????