#20 rental was purchased today

58 Replies

just closed on #20 today. it's a milestone since one time we thought we'd stop "when we hit 20", and "can u imagine having TWENTY houses?"

i need a new goal and at this point it's 35, when i think i will stop working and just stay home. will i get there? who knows. will i be upset if we dont? not that upset.

anyway, here are the details:

asking - 67, then reduced to 58.

purchased - 51k

sq. ft - 956

3 bed/ 1.5 bath

no garage - a shed is present

updates - ~12k with the driveway, which needs to be replaced.

rent - $1,050 estimate when it's all done.

my concrete guy wants to buy it on a land contract, so not sure what will happen at this point.

@George P. congrats!  Looks like you did really well with this one.  Are you using bank financing?

My goal was originally 10, and now it's 16.  I'm at 14 now, so I'm close to hitting my goal.  But I've been buying a lot in cash, so it takes longer to save up.  I may have to go back to financing in the future.

Originally posted by @Dawn Anastasi :

@George P. congrats!  Looks like you did really well with this one.  Are you using bank financing?

My goal was originally 10, and now it's 16.  I'm at 14 now, so I'm close to hitting my goal.  But I've been buying a lot in cash, so it takes longer to save up.  I may have to go back to financing in the future.

 hi dawn,

i meant to put details on that too, but forgot while posting.

yes, i used the line of credit that we have  (~170k) just wired the money. i have been buying "cash" for the last 8 months or so. i think that's the reason to get the houses that we have. i think i missed on a lot of houses simply because i didn't have the financing, and just like you, i was "saving for the next one". i think this was a mistake on my part.

the line is at 4.5% and once emptied, we can bundle the purchases that used up the line into one loan, to "refill" the line and start over.

Originally posted by @George P. :

yes, i used the line of credit that we have  (~170k) just wired the money. i have been buying "cash" for the last 8 months or so. i think that's the reason to get the houses that we have. i think i missed on a lot of houses simply because i didn't have the financing, and just like you, i was "saving for the next one". i think this was a mistake on my part.

the line is at 4.5% and once emptied, we can bundle the purchases that used up the line into one loan, to "refill" the line and start over.

How did you get the line of credit?  Was it through a local bank?  Do you have it against your home?  I would love to have a line of credit that large to be able to buy in cash.

Originally posted by @Dawn Anastasi :
Originally posted by @George P.:

yes, i used the line of credit that we have  (~170k) just wired the money. i have been buying "cash" for the last 8 months or so. i think that's the reason to get the houses that we have. i think i missed on a lot of houses simply because i didn't have the financing, and just like you, i was "saving for the next one". i think this was a mistake on my part.

the line is at 4.5% and once emptied, we can bundle the purchases that used up the line into one loan, to "refill" the line and start over.

How did you get the line of credit?  Was it through a local bank?  Do you have it against your home?  I would love to have a line of credit that large to be able to buy in cash.

it's a local bank and it's against 7-9 properties. dont remember the details. we did a refi, combined the properties and they said, "here's the left over in a form of LOC. you can use it if you want to. it's interest only until you put the new properties into a loan".

you should get that... we never realized how much it would help us.

Originally posted by @George P. :

it's a local bank and it's against 7-9 properties. dont remember the details. we did a refi, combined the properties and they said, "here's the left over in a form of LOC. you can use it if you want to. it's interest only until you put the new properties into a loan".

you should get that... we never realized how much it would help us.

What do you mean by "left over"? Do you mean that you refi'd and were only at like 50% LTV, so they gave you 25% LTV as a line of credit?

Originally posted by @Stephen Chittenden :
Originally posted by @George P.:

it's a local bank and it's against 7-9 properties. dont remember the details. we did a refi, combined the properties and they said, "here's the left over in a form of LOC. you can use it if you want to. it's interest only until you put the new properties into a loan".

you should get that... we never realized how much it would help us.

What do you mean by "left over"? Do you mean that you refi'd and were only at like 50% LTV, so they gave you 25% LTV as a line of credit?

when we refied the properties, they initiated a loan of ~500k over 20 yr. then they gave me a ~170k LOC with nothing out of pocket.

Originally posted by @George P. :
Originally posted by @Stephen Chittenden:
Originally posted by @George P.:

it's a local bank and it's against 7-9 properties. dont remember the details. we did a refi, combined the properties and they said, "here's the left over in a form of LOC. you can use it if you want to. it's interest only until you put the new properties into a loan".

you should get that... we never realized how much it would help us.

What do you mean by "left over"? Do you mean that you refi'd and were only at like 50% LTV, so they gave you 25% LTV as a line of credit?

when we refied the properties, they initiated a loan of ~500k over 20 yr. then they gave me a ~170k LOC with nothing out of pocket.

I'm just trying to figure out what the value of the property securing the loans and the LOC were.

Originally posted by @Stephen Chittenden :
Originally posted by @George P.:
Originally posted by @Stephen Chittenden:
Originally posted by @George P.:

it's a local bank and it's against 7-9 properties. dont remember the details. we did a refi, combined the properties and they said, "here's the left over in a form of LOC. you can use it if you want to. it's interest only until you put the new properties into a loan".

you should get that... we never realized how much it would help us.

What do you mean by "left over"? Do you mean that you refi'd and were only at like 50% LTV, so they gave you 25% LTV as a line of credit?

when we refied the properties, they initiated a loan of ~500k over 20 yr. then they gave me a ~170k LOC with nothing out of pocket.

I'm just trying to figure out what the value of the property securing the loans and the LOC were.

what i remember happened was they assumed the loans of the properties and it came up to 500k. but they are valued at ~750. so the gave me the LOC of 170.

those are approximate numbers. does it make sense?

Originally posted by @George P. :
Originally posted by @Stephen Chittenden:
Originally posted by @George P.:
Originally posted by @Stephen Chittenden:
Originally posted by @George P.:

it's a local bank and it's against 7-9 properties. dont remember the details. we did a refi, combined the properties and they said, "here's the left over in a form of LOC. you can use it if you want to. it's interest only until you put the new properties into a loan".

you should get that... we never realized how much it would help us.

What do you mean by "left over"? Do you mean that you refi'd and were only at like 50% LTV, so they gave you 25% LTV as a line of credit?

when we refied the properties, they initiated a loan of ~500k over 20 yr. then they gave me a ~170k LOC with nothing out of pocket.

I'm just trying to figure out what the value of the property securing the loans and the LOC were.

what i remember happened was they assumed the loans of the properties and it came up to 500k. but they are valued at ~750. so the gave me the LOC of 170.

those are approximate numbers. does it make sense?

That's about 90% LTV. It's a generous amount of debt on them, but it's certainly possible. We're growing (and smaller) and I'm just trying to make sure we have explored all of our available options for growth. We bought 4 units (1 SFH and 1 triplex) this year. Hoping to do more than that next year. Maybe we can get in one more this year.

 @George P. :

Follow the 10X Rule. Your new goal should be 200 houses!!!!

By the way do you do all single family, or do you have any multi-family? Do you manage yourself?

Originally posted by @Dawn Anastasi :

@George P. congrats!  Looks like you did really well with this one.  Are you using bank financing?

My goal was originally 10, and now it's 16.  I'm at 14 now, so I'm close to hitting my goal.  But I've been buying a lot in cash, so it takes longer to save up.  I may have to go back to financing in the future.

You should 10X your goals as well. Shoot for 160!!!!

Originally posted by @Anthony Gayden :
Originally posted by @Dawn Anastasi:

@George P. congrats!  Looks like you did really well with this one.  Are you using bank financing?

My goal was originally 10, and now it's 16.  I'm at 14 now, so I'm close to hitting my goal.  But I've been buying a lot in cash, so it takes longer to save up.  I may have to go back to financing in the future.

You should 10X your goals as well. Shoot for 160!!!!

 That's way too many properties for me.  Why have that many?  After a certain point, more money isn't going to make me more happy.

Originally posted by @Dawn Anastasi :
Originally posted by @Anthony Gayden:
Originally posted by @Dawn Anastasi:

@George P. congrats!  Looks like you did really well with this one.  Are you using bank financing?

My goal was originally 10, and now it's 16.  I'm at 14 now, so I'm close to hitting my goal.  But I've been buying a lot in cash, so it takes longer to save up.  I may have to go back to financing in the future.

You should 10X your goals as well. Shoot for 160!!!!

 That's way too many properties for me.  Why have that many?  After a certain point, more money isn't going to make me more happy.

In terms of that being too many individual properties, I guess you are right. Besides, owning more properties is harder than owning more units. I would think that I would rather have several 300-400 unit apartment buildings than tens of dozens of single family homes.

Now in terms of the more money not making you more happy, I don't really think in terms of my personal happiness. I am thinking more in terms of making a positive impact on my community and providing for my family. The more money you have, the more impact you will make.

so it's taken me 5 months and lots of tears on other rehabs, but we finally finished this one.

here are some pictures of the final product. if you have seen pics of our other houses, the interior starts to look like a cookie cutter home. same colors, same finishes, same, same, same..

so i hope you like them.

listed 30 mins ago on poslets for $1,075, we accept pets

i have to look at the numbers when i get home from vacation, but i think it was around 10 to fix. who cares, really. what needed to be done got done. at this point, it just snowballs and the rest pay for the new acquisitions. i love keeping my subs busy, i just love it.

Congrats on hitting your goal.   Although #20 sounds like a great number, I've noticed on this forum that most investors seem to concentrate on having the most properties and units possible.  The two questions we should be asking ourselves is it quality or quantity that matter and is it more important to have a higher cash flow with less units or would you rather have more units with less cash flow?  If A = units and B = cash flow, then c = avg cash flow per unit.   

What most people don't think about is that the more units and buildings you own, the more on average problems you'll have.  For example if investor A has 5 duplexes and investor B has 10 and they both have the same amount of money to spend on those units, that's 5 more roofs that need to be replaced, 5 more property taxes to be paid, 5 more sidewalks that crack and need to be replaced, 10 more water heaters to upgrade, 10 more furnaces that eventually go bad, 5 more yards to mow and do snow removal on, 5 more PM's if that's your thing, you get the point.  So more isn't always better. 

IMO, 5 properties with excellent cash flow is less risky and expensive than an investor who owns 10.   Which in turn mean for net income on average, which in turn means my wallet gets fatter.  

Originally posted by @Marcus Johnson :

Congrats on hitting your goal.   Although #20 sounds like a great number, I've noticed on this forum that most investors seem to concentrate on having the most properties and units possible.  The two questions we should be asking ourselves is it quality or quantity that matter and is it more important to have a higher cash flow with less units or would you rather have more units with less cash flow?  If A = units and B = cash flow, then c = avg cash flow per unit.   

What most people don't think about is that the more units and buildings you own, the more on average problems you'll have.  For example if investor A has 5 duplexes and investor B has 10 and they both have the same amount of money to spend on those units, that's 5 more roofs that need to be replaced, 5 more property taxes to be paid, 5 more sidewalks that crack and need to be replaced, 10 more water heaters to upgrade, 10 more furnaces that eventually go bad, 5 more yards to mow and do snow removal on, 5 more PM's if that's your thing, you get the point.  So more isn't always better. 

IMO, 5 properties with excellent cash flow is less risky and expensive than an investor who owns 10.   Which in turn mean for net income on average, which in turn means my wallet gets fatter.  

 it also means you have 1 vacancy in 5 homes and that's 20 percent of your cashflow.  as opposed to 1 vacancy in 20 and you realize it's empty 4 months later,  so to speak 

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