Hi everyone! I am new here and stumbled upon the site and really liked what I saw. I have began listening to the podcasts as well as reading through the forums to soak up as much knowledge as I can get. So with that, Thank You all first and foremost for being so engaging with your conversations.
I have done 4 rehabs in the past 3 of the 4 successful. All 4 I guess could be considered successful since I haven't really lost money! I'm starting a new phase of my life and moving in the direction of buy and hold. I don't have the time to flip a property and like the buy and hold strategy that seems if all goes well to provide a nice living for some.
I've come across several properties that are really good in regards to cash flow. Property 1 is listed at 89,900 with 1600 monthly coming in. Its a 4 plex and sec 8 and all 4 are rented. Its listed by a property company that rehabs property fills it up and sells for a profit and then manages your property. He is also willing to hold a note with 70% down. my bank will loan me 85% on the property so seems like a no brainer right? What would be the down sides to this?
Also the other property I have come across is listed for 24,500 with 400 monthly coming in from a long term tenant, and 29,900 with 595 monthly from a long term tenant. Both seem solid properties...
Which Would you go for?
Also another question I have is my home appraised for 350k, and I owe 270k...Can I use that equity to purchase these?
Thanks everyone and have a great weekend!
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you probably don't have much to work with on your house but talk to your local banks.
What type of area are these property in and what is the condition of them as well.
Thanks for the warm welcome and tips! I'll make sure I make the most of those. I thought I would have some equity to pull but I am shocked that i cannot pull from that...I called a buddy of mine in the banking industry and he told me I could pull about 9-10k...Learn something new everyday.
The location of the two single family homes is a 50/50 type area...There are some good parts and some bad parts...they are near the Uni of Memphis so that zip code seems to hold its value pretty well. Both of the homes have long term tenants, 1 being there three years and the other being there 7 years. Not sure of the conditions...Realtors have them posted for sale and the only way to view the inside is to have an offer down contingent on an inside view. I have seen the outside of both...Peered through the winders...1 of the homes appears to be inhabited by a hoarder. I personally think there are positives and negatives to hoarders...They have so much stuff, its a pain to move so they are fairly likely to stay with an increase in rent...But their hoards of stuff also cover up potential problems that won't be able to be in view during an inspection. The 4 plex is completely rehabbed...new electrical, plumbing, and a total interior top to bottom. Seems solid shape...However, its not in the best area of town...i most likely would not collect my own rent from this property.
Welcome to BP, a great place to learn and make wonderful investing connections.
You've already started to use the great tools here---great!! I advise taking your time in choosing properties to invest in. And remember there are very real ways to invest without any or much money at all. Check out Brandon Turner's book here on BP.
Please do NOT buy something because someone else tells you it's a good deal, agent or not. You must learn to do your due diligence. When I first came to the Memphis market everything seemed like a screamin deal but I had a could investor friends that I had met that guided me through the jungle.
Happy & Prosperous New Year!
Melodee Lucido, Wholesale Houses In Memphis | [email protected] | 913‑210‑0691
My rule of thumb is if i don't feel comfortable collecting rent at night i don't buy it. There is no point in buying in a bad part of town. Everything is a headache. Cheap property high turnover and maintenance issues. I only by in A,B,C neighborhoods cost more upfront but i actually make money instead of chasing it. Don't chase a rate of return that is unachievable.
The houses sound like your best bet if the tenants have been in there a long time. I would raise rents $25 every year until i had it a market rent.
Hortors are a big problem from bugs to fire and everything in between.
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