All Forum Posts by: Wai Fung

Anyone have recommendations on an insurance companies in Missouri?

Thank you all for your candid responses. I actually had the chance to go out to Saint Louis this past weekend and to meet the team. Victor and Giro were the two individuals I had the opportunity to meet. At the same time before going out there they gave me three references to call who have bought property in the past and one who just bought a duplex and a 4 plex recently. I was able to get the pros/cons about their experiences. I guess more pros than cons since they both have bought more than one property from them so far. One individual has bought 7 4 plexes from them. One of the three investors I spoke to said they did quote him a higher rent than expected at $475 but got it rented for $425 in both downstairs units costing him $100/month in rent. I asked Giro about this and he said in his defense that the property came in at $10,000 less than appraised ($95,000) and so he either broke even or took a small loss here. He even agreed to offer the investor a concession of free management for 6 months. My gut feeling is that these guys will try to do everything in their power to make things right if they have in any way make a mistake. Speaking to those references really did help, since they were not completely one sided. Hope this helps.

Thank you Anthony for your response. Everyone on this thread is correct in regards to the maintenance. The homes are all completely rehabbed, so the first year shouldn't be too much of an issue with a home warranty in place for major items. Was the 12 unit rehabbed before your dad purchased it? Or was it just made rent ready? Thanks.

Brandon Turner - I think I will be using closer to 10% for maintenance and an additional 5% for reserves in case of any other expenses do come up. Craig did make a good point to add the 5% to make the unit rent ready.

Anthony G - This property is located between the 3400-3600 blocks of California Ave in St. Louis. What are your thoughts?

Yes, these are all brick homes that have been rehabbed. Properties are early 1900's. New piping, electrical, sound foundation, and new roofing (if needed). These homes are all former REO, condemned by the city, then rehabbed. Neighborhoods are in the C range. If I increased maintenance to 10%. Would this satisfy this expense? I have a one year guarantee on the property from the rehabber. Thoughts?

I'm sitting here at the St. Louis airport after looking at over 15 4 plexes all over St. Louis over the last 2 days. Here are the numbers for a 4 plex in St. Louis:

Price: $129,500
Units: 4 plex
Down: 20% $25,900
Closing Costs: $4,500 (+/-)
Interest Rate: 4.25%
PITI: $837.06
Rental Income: $475(2) and $850(2)
Total Rental Income: $2650
Management: 8% $212
Vacancy: 10% $265
Maintenance: 5% $132.50
Cash Flow: $1203/month

Am I missing anything? Is there a spreadsheet that I can use as a
template that someone might have?

What do people use to organize their rental properties? Excel? Special property management software?

So, if it is fully rented. I can make my initial money back in a
little more than 2 years. I can pretty much pay off the property in 7
years (but I wouldn't do this because I need the tax benefits). The numbers above is before taxes of course. I guess this would be the same without the headaches if I invested my cash with a commercial real estate investment group where their goal is to double investor's money in 5-6 years where I receive the tax benefits via a K-1.

What to do?

Any feed back would be greatly appreciated.

Does anybody have any experiences with redraw/offset accounts? Or is this method only used in Australia?

Has anybody ever utilized a UBLOC for buy and hold strategy?

Here are the numbers that I worked out.

House Price $125,000.00
Down (Using UBLOC @ 1.5%) $25,000
Closing Cost $4,500.00

Expenses
Cost of UBLOC @ 1.5% $586.50

"Down $25000 +
Closing Cost $4500 +
UBLOC csot (12% of $80,000) $9600
Total $39100"

PIT 4.0% $769.08
Insurance $100.00

Rent $1,300.00
Cash Flow $(155.58)

I would have to look into buying 4 plexes with better cash flow to justify using the UBLOC otherwise I would bleeding cash each month. Let me know if I am missing anything.

I am new at this so any feedback would be appreciated.

Thanks Tim. I was actually looking at St. John's County in Jacksonville for investments, but notice home prices are higher than what I want. The appreciation might be there in the coming years but cash flow is certainly not. I will be taking a trip to St. Louis at the end of this month to see the different pockets of the this city and the suburbs, the homes that are being rehabbed, current, and past projects as well. You have myself second guessing myself now...

I will heed your advice and invest closer to home between Las Vegas and Phoenix. I really do like the market in Dallas right now. Any leads you might be able to provide me in anyone of these markets?

Thanks.

Thanks Steve! Finding deals in Los Angeles seems to be almost impossible as the prices are too high and I wouldn't be able to cash flow. My only options which aren't too far are Phoenix and Las Vegas. The cash flow in St Louis is what really attracts me though. I feel I can get a return on money faster than I can bet on appreciation in LV and PHX. Can you tell me a bit more about your experiences with out of state investments? I see you are in TN, there seems to be a lot of deals out there right now where you don't have to put anything down and the properties will still cash flow. Have you heard of these?