All Forum Posts by: Wesley Clark

@Matthew Parrott thank you for the resource!  Just sent in a request.

Anyone else???

HI BP Community.  So I have a two part question as I have moved states since my first purchase an am about ready to make my second rental purchase.  

First part - currently I have 401k loan from my first rental purchase in the amount of $24k.  Recently I've sold my primary residence and the proceeds were $27k.  My question is should I pay off the loan to myself, freeing up this loan vehicle and then get a new loan to purchase a new home or just use the $27k as is towards the down payment on a new purchase?  

Second part - I relocated from NJ where my current property is performing very well - almost 2% and I love the property management company that I am working with.  Should I look to reinvest in that area that I know the market and management company, or instead look to purchase something closer in SB.  It is a college town and presents some new opportunities.   

Appreciate any assistance and if you are in the South Bend / Mishawaka area, lets connect!

Wes

Hello Everyone, So I just got some bad news. I was looking to sell my duplex in Wisconsin. I knew there were some foundation issues and my inspection prior to selling came back as needing hand excavation (proximity to other home) and a price tag of $18k. I owe $135k on the home which sadly given the lack of appreciation (I bought it in 2008) the same amount I could likely sell it for. I have little to no money invested as it was purchased with a VA loan. My new thought is to attempt to refi or try and get a line of credit to do the repair and keep the home. The rents are $750/each - one 3br one 2br and I think they are under market. Would like to hear anyone’s thoughts.

Ok so here is another deal. Multi family 2 - 2bd/1.5 bath. Currently owner occupied with other unit rented at 1.1k/mon. Assumption being as they are mirrored units the current owner occupied portion could rent for the same. Units are in great condition. 139k List price 15% Down 5k Closing 5% Interest 4.5k taxes $2.2k/mon rents BP calculators say $386/mon cash flow and 18% CoC return. ($1.8k/mon for total expenses) Here is the rub...the full basement is in the basement...and the basement is only 5ft tall - no joke. Also the half bath is literally just a toilet in the corner of the larger bedroom upstairs....who built this place?!? On paper it seems to be a great deal but it seems like interest for renters maybe low or that it would experience high turnover rates. Seller is motivated to sell and could likely get for even less. If it passes a CO is it accurate to assume that someone will always want to rent?

Mayer M. please send me an email to discuss further if you may, it is on my profile. Thanks!

Hello BP - looking for assistance in analyzing my first deal. I just put it through the rental calculator and BRRRR calculator and it does not look promising from a Cash on Cash return perspective. I'm wondering if SFR in my area based on taxes etc are just out of reach or if I am being too conservative in my numbers.

Currently approved for a Fannie May loan which buddles renovation into the purchase price.

3BR / 1BA SFR

List - $111k

ARV - $150k

Assumed purchase price - $80k

Reno - $17k-$20k

$14.5k down

$4.5k taxes

$55PMI

$6k closing

5% interest, 30 years, 1.2 points

$1,400/mon conservative rent projection.  Would likely start at $1,600 but comfortable I could get $1,400.

Lender quote of expenses at $80k purchase price is $975-$1,000 month.  When I account for vacancy, repairs, capex and prop management it pushes me into a flat or negative cash flow projection plus alot of upfront cash.  Am I right to walk away or am I just too conservative on this one and hoping to land the perfect deal....

Thank you all

Wow thank you everyone for your advice I really appreciate it.  After some thought and discussing with others I completely agree that it is time to cut bait.  

One more question for you all.  Currently both of my tenants are on month to month leases and I know the condition of one of the units is not the best.  Would definitely benefit from a coat of paint and new carpet.   Prior to selling would you suggest getting this tenant out and making those improvements or is the juice not worth the squeeze?

Thank you very much. I do agree I’m trying to make something work by the narrowest of margins. I’m a capex item away from a much larger financial burden. Time to list!

Hello BP!

I fell into land lording a few years ago when I moved out of a duplex I purchased due to job relocation.  I now own a duplex out of state and have recently purchased my primary residence.

Basically I purchased a duplex with little to no money down with a VA loan. I purchased it in 2008 for $154k, it is now valued at around $135K which is roughly the exact amount remaining on the principal. The rents total $1,500 a month with an escrowed mortgage of $1,350. However - due to my inexperience I have been paying the water for the tenants and have not raised the rents in several years. Additionally I have been relying on family to do the property management which I would ideally like to avoid. Essentially the property is cash flowing negative as property management, water and capital fund are only covered by $150/month.

Due to my now feverish appetite to get into buy and hold properties (thank you BP podcasts and books) I would like to get my act together and be a move active landlord.

Last year i purchased my primary home for $290k and have a conventional loan with capital invested in the down payment.

So that being said I see a few different options and was hoping for some advice. 

1.  Start charging the tenants for water

2.  Raise the rents incrementally annually 

3. Refinance my VA loan to restart the amortization schedule and reduce my monthly payment. I would think this would at least make the property neutral or start to cash flow. With incremental rents it could eventually work...

4. Sell the rental home to free up my VA loan - and refinance out of the traditional loan on my primary residence into a VA loan. I'm not sure if this is a viable option and if so - if i were able to pull out any of my capital.

REALLY appreciate anyone's assistance and I want to get going in the right direction on multifamily deals that positively cash flow.

-Wes