First Post

7 Replies

Hi everyone! New investor here. I have a few questions as I am in the process of buying a investment. I have narrowed the list down to three in my area and my realtor is now getting comps for me.

Before that some background of how I got here. The beginning of this year I got out of the Navy and stayed in NH to go to school for an engineering degree. Six months ago I got a job at the shipyard as an engineer to support myself while I go to school (it's expensive to live here). A co-worker just bought a house with a VA loan and he was super excited about it. We ended up talking about how up here it is cheaper to own than rent, (He is from here, as I am from CO), I ended up looking at houses in that week. He gave me the number to his realtor and that lead me to my current realtor. As I started searching I found nice places nearby to live but it was expensive. Then I found a duplex with a ten minute walk from work. I did research on it, found out it would only cost me $500 to live there with a tenant in the other side. That got me thinking, what if I got a bigger place, with more units? Like an apartment complex! Well due to VA loan regulations that was shot down. Only can do up to four units. So I started researching those, then on how to be a landlord. I found some info and decided to wait till April to buy my first place, since my rent agreement ends then. I actually came across BiggerPockets during my search for info in the first couple of months, disregarded it then since I wasn't looking to be a REI then. About two months ago I came back to BiggerPockets and made an account, also started school then as well. Well as I read every guide on the site I started dreaming more. I got excited of what my future could be. I wanted to do more research and find more places, but school work needed to be done so I did that instead. Then I read an article about a month ago about starting now. I re-looked at everything and made a plan. I was going to start now instead of waiting. With school ramping up I had to stop doing more research again finish that, Now I am in my last week of school and about to place an offer on a place.

I created a almost play by play of the next ten years. I used my spreadsheets on possible rentals to create the plan. I have then since revised both the plan and spreadsheets multiple times as I learn more. However, the basic plan remains the same. Buy a four plex every year until I can put %20-%30 on a four plex. Then keep using all the money I make to do that until in seven to ten years buy a million dollar apartment complex (found on For the first place I will use the VA loan to buy and live in for the year. The second year, will use the second tier VA loan to buy the second. The third will be either a %20-%30 conventional loan or a FHA %3.5 with a one year living requirement. After those three years the next few years will look the same, thinking if I can flip I will do that when I get the funds (or use 203K, but that is contractor work only). Then hopefully I will have enough money in the next decade to put the 200K-350K down payment for the apartment complex. But how to get started?

The first step is the hardest. I need to buy my first four plex and I am starting that process and will look at them with my co-worker (He use to be a electrical guy building houses) and pay him in beer and food. Then I will need to place an offer on one of them. Is there anything I should do or know before offering? I am currently getting the rental stuff in order. Thanks!


Chris Wedde

I have found that sometimes the business plan and success can be easier when you purchase large ticket items. There are even 100% Financing out there for Apartment complexes, new construction, etc...they just want the amount to be over $500k at a minimum. Certainly, 8+ units is the minimum goal I have found, 16+ is preferable when it comes to getting solid financing without providing much evidence of credit/income, etc.

@Christopher Wedde I love the plan that you have set out and that you have been flexible with it as you've learned more. One of the key's in REI is having a plan A then B then C and a backup plan working simultaneously for each of them.

I would encourage you to start jumping in, looking at places making offers etc. make sure that you don't get emotionally attached to any property, know what your MAO is (Maximum Allowable Offer) and stick with it, don't compromise just to get a property. The right one at the right price will come along.

@Marc Kelly Hmm never hear of those. Who does that kind of loan?

@Rosston Smith Thank you!

@Suzanne Griffiths Thank you. I hope that the plan is decent. I am having troubles right now trying to figure out an offer. I am waiting on comps from my realtor, I would like to know how to do them though for in the future. I guess I need to figure out normal sell prices for that kind of house then deduct the cost of any repairs? What about current tenants? Do I lower the offer due to terrible tenants? Thank you in advanced for the answers!

@Christopher Wedde I find that a great resource for rough comps (always verify with your agent) is Redfin.

Type in the address you want comps for.  Scroll down til you see the map and select the link that says "map nearby properties".  Then on the next screen to the right of the search bar is a filter option.  Change the property criteria to be similar to the one you are looking at and the select the radio button that says "sold properties only".  This will give you similar sold properties within a close distance within your selected timeframe.  You can the select the properties and see if the finishes or condition of the home is similar to yours.  Try and identify 3 good comps and find the average.  This should get you relatively close so that you can run the rest of your numbers and then hopefully only make a small adjustment when you hear from your agent.

It will also give you a quick idea if the property is over priced for the area etc.

@Christopher Wedde

You can also your realtor to give you limited access to the MLS, it will be different from realtor but it will also give you an idea of the prices in your given area

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