All Forum Posts by: Tyler D.

 Well, it pays itself off in 6 years.

And I get to brag about my sub 3% interest rate.

 I know, it's pretty amazing. 2 points for 2.875% or 0 points for 3.375%.

2.875%. VA loan.

I have run the numbers already, estimating actual taxes/ insurance and estimated maint/capex, etc.

What I am looking for here is the experience of investors who have done this before. Real life vs on paper.

I'd be using a VA loan @ 10% down @ 2.875%. All in with closing costs $45k.

Monthly payment $1,170. After 50% rule $230 CF or a 6.7% CoC return.

It's not great, BUT there is potential upside in the rents, and actual costs will likely be less than 50%, right?

I am looking to buy my first fourplex, out of state. I found one that appears to be a deal. Below, I'm going to break down the characteristics.

1) It is in a smaller town, about 80,000 people, in a landlord-friendly state. 

2) Town has mid-low crime, and multiple job sources. Population is going up 0.5% per year.

3) Units are 3/1, with a garage.

4) 2-5mins drive to food, shopping, and airport.

5) Last renter added 2 years ago at $700. Market rents for a 3 bed are 20% higher at $850.

6) Current total rent is $2800, and asking price is $314,000. This puts me at about 0.9%.

7) Property appears to be in good condition.

All this being said, how does the deal look? From what I have seen, everything appears to be solid, but as this is my first fourplex deal, I am unsure if I have missed something. Let me know what you think!

That's about what I've seen. I haven't seen a single 2% fourplex in decent shape, though I have seen quite a few 1%ers. 

In your experience, would you go for a 1% fourplex if it's in a good area or would you still shoot for something higher, like 1.1-1.5?

I have offers accepted on 2 out of state properties. Both need some minor rehab (new carpet, install appliances), but nothing crazy.

As an out of state investor, how can I get contractors inside and screen for tenants and give them the keys while out of state? 

I am looking to buy my first fourplex with my VA loan, live in it for a year, and turn it into a rental. 0% down at ~3% is excellent and I want to take advantage of it.

I'm not looking to take any risks with rehab or warzones. I want as close to turnkey as possible.

As far as the setup, I want the most consistent for long-term renters. I have been looking at townhome-style and 2x duplexes, and these seem optimal as each tenant has their own entrance that feels like a home. Personal garages seem great as well. 

As far as bedroom count goes, I'm thinking at least 2/1, possibly 3/1 or 3/2 but they are hard to find. I believe a 3/x would bring the longest term tenants, but a 2/1 would be easier to fill.

For rents, I have seen a few that appear to be renting under market value. However, the market rents include house which I assume run at a premium. In one example I found a 3/1 fourplex renting for $750/ unit, with surrounding 3/1 houses renting for $900+. 

When it comes to buying a turnkey property, should I still try to break 1.5-2%, or do I need to settle for 1%? Many of the fours I see on loopnet that are in good condition are at or under 1%. Keep in mind that I'm open to any market, I'll go where the numbers are best.

 Makes sense. What estimates do you use for expenses?