Just closed on Rental #2!

19 Replies

Hi BP,

Just had the closing last night for my second rental property! The first one was through an FHA loan and I am currently living in it with my fiance, so we don't actually "see" cash flow with this property.. only rent savings. (Which is just as good in my books!) Our newly purchased 2-family is owner financed, and seemed like a great deal. The property was solid, the numbers worked out, owner financing enabled us to only have to put up $7k on the down payment, so we jumped on it!

All in all, My fiance and I started investing in buy-and-hold properties about 4 months ago, and already have on 2 properties on our hands! Now we will start to actually "see" some cash flow! In other news, we are getting married in less than a month, honeymoon the whole next week, then back at saving and looking for rental #3!

Thanks for reading!

Joe

Congrats on your closing!  Keep the momentum going. Have you started looking for another yet? :D

Congrats! Where did you find the owner finance opportunity? Craiglist? Bandit sign? Mls?

congrats to you two!! 

@Tracie Davis : I haven't started looking yet! Hopefully we will begin looking for #3 later this year! :)

@Milton F. : our family friend and real estate agent found it for us! She's very good! She knew we were not ready to drop 20% plus closing costs on a property so she looked around for motivated sellers.

Thanks everyone! 

Originally posted by @Joseph Shevy :

Hi BP,

Just had the closing last night for my second rental property! The first one was through an FHA loan and I am currently living in it with my fiance, so we don't actually "see" cash flow with this property.. only rent savings. (Which is just as good in my books!) Our newly purchased 2-family is owner financed, and seemed like a great deal. The property was solid, the numbers worked out, owner financing enabled us to only have to put up $7k on the down payment, so we jumped on it!

All in all, My fiance and I started investing in buy-and-hold properties about 4 months ago, and already have on 2 properties on our hands! Now we will start to actually "see" some cash flow! In other news, we are getting married in less than a month, honeymoon the whole next week, then back at saving and looking for rental #3!

Thanks for reading!

Joe

 Congratulations! Taking action is something that 99% of BPers will never do. You are the 1%

Originally posted by @Tracie Davis :

Congrats on your closing!  Keep the momentum going. Have you started looking for another yet? :D

 Where in the world is Wickliffe Ohio, Tracie? I've lived in Ohio for 20 years, but never heard of this town...

I suppose I could look it up, but this is more fun..plus, I get to say high to you this way, and welcome you to BP Universe :)

Congrats to you both!!!

Double congratulations!!!!!!

Enjoy your honeymoon....and then back to business....:)

Congrats Joe!  And all the best with your marriage.  I'm getting hitched this coming January :)  Only $7k down sounds like a steal!  

That's great stuff. As a new member of BP is ok to ask for details on the numbers? Price // rent // 50/50 rule? And cash flow or is that not really talked about? Either way congrats on getting started!

Very nice to hear your start out story!

Wish you great success in REI!!!!!!!!

Hi @Ben Leybovich , lWickliffe is about 16 miles east of Cleveland.  We have a population of around 12k. 

Originally posted by @Matthew Forbes :
That's great stuff. As a new member of BP is ok to ask for details on the numbers? Price // rent // 50/50 rule? And cash flow or is that not really talked about? Either way congrats on getting started!

Thanks Everyone! We are very excited for everything ahead! 2015 has been an exciting year so far!

And Matthew, Yeah sure, I can spill some details about the deal. First of all, The numbers don't show how great this property is.. 

The rent is currently at 650 for the 1/1 upstairs and 700 for the 2/1 downstairs. My principle & interest payment is 410/month, and taxes and insurance is roughly 360/month. So, 1350 rent - 770 PITI is only $580/month. I set aside 8% for vacancy = $108, and 10% for cap expenses and maintenance. Monthly cash flow = $337. WHICH, does not seem high, but I saw something in this property. The property is in VERY good shape as the owners took very good care of it. Also, many of the big cap expenses were fairly new! the furnaces and hot water heaters were pretty new and the roof was in great shape. Also, the location of this property is very good, being on a nice side road right in down town, and very close to the hospital. (Both of the current tenants work at the hospital).

My favorite thing about this property, aside from only needing to put down 7k :), is the rents are BELOW fmv as it stands. The FMV's of these units are: 1/1 is about 700/month and the 2/1 is 750-800/month. So that gives me quite a bit of increase to cashflow when I decide to increase the rents. The tenants, right now, are taking care of the lawn, snow removal, their own garbage, and are great payers, so by no means am i looking to get rid of them any time soon. If I were to increase the rents to 700 and 750, the CF would increase to $419 :) For now, they are great payers that take care of the property.. I will take that any day!

Joe

Joe, I LOVE it! nicely done... Please consider that realtor an ASSET to your business.  For her to be shopping around finding creative financing deals for you is not the standard.  Cherish this relationship as she seems to be working hard for you.  As mentioned, awesome job pulling the trigger on rental number 2. 

 Did you find it easier and less formidable once you all ready acquired number 1 to pull the trigger on the next one? 


Congrats on your REI success!

Originally posted by @Aaron Thivierge:

Joe, I LOVE it! nicely done... Please consider that realtor an ASSET to your business.  For her to be shopping around finding creative financing deals for you is not the standard.  Cherish this relationship as she seems to be working hard for you.  As mentioned, awesome job pulling the trigger on rental number 2. 

 Did you find it easier and less formidable once you all ready acquired number 1 to pull the trigger on the next one? 


Congrats on your REI success!

Aaron,Thank you! Yes, I do consider her a huge asset! She is a family friend and is working extremely hard to get me to the a position much like hers! I will also be working towards my real estate license in about a month and she has offered me to work under her brokerage. I honestly couldn't ask for a better Mentor, Realtor, friend, to help me get to where I want to be. 

This one was a little easier to pull the trigger on, just because we did already go through the process once.. The only nervousness i had going into this was the fact that we are paying for our wedding thats in Sept, and renovations to our first apt. So, money was a little tighter on this purchase, but it was a great deal and im glad we went through with it!

Joe

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