World Traveler from Pottsville, PA

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World Traveler from Pottsville, PA

Bobby Weaver
Pottsville, PA · Member since 2016 · 7 posts · 1 vote

Hello! My name is Bobby Weaver and I am a location independent entrepreneur currently living in Chiang Mai, Thailand.  Originally I am from Pottsville, Pennsylvania - a relatively small town with coal mining roots a few hours outside of Philadelphia. 

Through online ventures and some other items I have about $20k-$25k in cash that I am looking to invest in real estate in and around my home town of Pottsville. My current plan is to purchase a few apartment buildings using leverage and live on the cash flow. I can live comfortably in Chiang Mai for approx $750 per month and in the States for approx $1500 per month. I love living cheap, it is one of my biggest passions.

The plan to accomplish this is to house hack a multi-family property (hopefully using a FHA loan to put little money down) and also acquiring another multi-family, possibly another after that. The prices of the properties I'm looking at range from $25k-$100k and all have at least 3 units. Average rent ranges in my area but falls between $450-$750 per month based on the area and size (of course). If I am house hacking my living expense would drop drastically as well.

Assuming both 10% vacancy, $200 per month CapEx, and 10% for a Property Manager - I am seeing numbers ranging from $400-$700 in cash flow, all with very high CCR (most well over 65%)  and CAP rates and GRM great, too. These are also not fixer-uppers and would require very little in the terms of immediate repairs. 

There are also 2-3 buildings with 6-8 apartments in them, but I am unfamiliar with the process of financing those type of properties (I am very new to real estate investing). 

The Plan - 

4 unit multi family, living in one, 3 rented $350 CF
4 unit multi family $650 CF

Other multi family $500 CF

Bringing my total around $1,500 (I am aware this is pre-tax). 

This plan is still very much in the works, but I fully plan on executing a full plan on my arrival back in Pottsville, PA on May 1st. Any thoughts, comments, AND critiques are welcomed with open arms. 

I am very excited to be a part of this community! 

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  • Charles McCabe
    Investor · Lansdowne, PA · Member since 2016 · 161 posts · 62 votes
    10y

    @Bobby WeaverYou certainly seem to have your box well defined.  I'd like to throw one of your potential properties into my model and see how my results compare to yours.  That kind of CoCR is stellar; my numbers in Norristown are topping out around 48%.  Have you used the analysis tools here on BP?  Are any of these already occupied?  Last I knew (I'm way, way far from an expert), Pottsville was pretty depressed, so I'm a little skeptical of the vacancy rate/rent.  Have you compared against rentometer.com?

    Thanks,

    Chaz

    0Reply
  • Mike R.
    Investor · Orwigsburg, PA · Member since 2016 · 28 posts · 5 votes
    10y

    Welcome to BP. I live in southern Schuylkill County, not too far away.

    0Reply
  • Bobby Weaver
    OP
    Pottsville, PA · Member since 2016 · 7 posts · 1 vote
    10y

    @Charles McCabeThanks for the response! I don't mean for me to have my box well defined, I just think it is the path that makes the most sense to go from cash in the bank to cash flow, you know? Also seems to be the easier and the one I understand the most. 

    I haven't used many of the tools here on BP, I just do all the math I can on my own. Can you suggest some good ones to take a look at? 

    I would agree with that general description that Pottsville is pretty depressed. I am also skeptical about the vacancy and rents, but I usually calculate with 10%-12.5% vacancy rate which seems like it should be safe(ish), you know? Also, I am aiming for the nicer parts of town which usually provide for more stable tenants, or at least I would assume.  I also usually just assume the rent that the current owners are giving me, so unless while doing estoppel agreements something is drastically different....most of the buildings I am looking at have either 1 or 2 of units empty, and 1-3 units full. Thanks for the tip on rentometer.com - I checked it out, pretty cool. 

    is a link to a screenshot of my overview on a potential property. I am actually embarrassed to share it, mainly because I am new and haven't started sharing my numbers (for the fear of something drastically wrong) but here it goes! Assumptions built into the NOI currently are 20% for vacancy and management. Also, the money down and rate are based on a what local bank has "quoted me". - I haven't dug deep into that yet.

    Thanks for reply! 

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  • Bobby Weaver
    OP
    Pottsville, PA · Member since 2016 · 7 posts · 1 vote
    10y

    @Mike R.That's awesome! I used to live in Orwigsburg, right on the square. Maybe when I get back to the States we could meet up, I would love to get to know other investors in the area. 

    Valenti's pizza is the best, isn't it? Nice to meet you! 

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  • Mike R.
    Investor · Orwigsburg, PA · Member since 2016 · 28 posts · 5 votes
    10y

    @Bobby WeaverI'm partial to the Mustard Seed myself!

    I'd be careful about assuming rents of $650, unless you are buying something with 3 or more BR in it. You can rent a house for that much.

    Can you share the name of the local bank you are dealing with? I'd love to be able to put 10 percent down on investment property.

    0Reply
  • Mike O.Pro Member
    Drums, PA · Member since 2015 · 17 posts · 17 votes
    10y

    Welcome to BP! I used to own a house over in Mahanoy City and I have some relatives in Pottsville now. I too am overseas and have been skeptical of the market in that region (I'm originally from the Hazleton area). The numbers seem really good, but I too would be concerned about vacancy being higher. Have you looked in to property management for that area?

    0Reply
  • Nancy L.
    Philadelphia, PA · Member since 2014 · 178 posts · 64 votes
    10y

    @Bobby WeaverI've been curious forever about living somewhere where the dollar stretches farther... How is that working for you?

    On you link to your #s, can't see how you're getting from your gross rent to your NOI? 50% rule? On property manager contracts, look out for re-rent and other fees in addition to the base percentage. Also for verifying rent prices, I usually look on CL or Zillow etc.

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  • Charles McCabe
    Investor · Lansdowne, PA · Member since 2016 · 161 posts · 62 votes
    10y

    @Bobby WeaverDo those numbers account for all possible expenses, like insurance, taxes, snow removal, lawn care?  I'll PM you the sheet I've cobbled together and you can see how things stack up against my model (and I still recommend throwing it into the BP model:  https://www.biggerpockets.com/buy-and-hold-calculator).

    Also, I'm curious about that financing...3% for 15 years with only 10% down is lots better than I've been seeing.

    Thanks,

    Chaz

    0Reply
  • Bobby Weaver
    OP
    Pottsville, PA · Member since 2016 · 7 posts · 1 vote
    10y

    @Mike R.Oh, well I guess we can't be friends then. Kidding, the Mustard Seed is pretty great, too. 

    That is true, $650 is a pretty hefty rent in Pottsville. Don't you normally see rents that high more South towards Orwigsburg? This property I am looking at is in the Mahantongo street area in Pottsville, which is a pretty nice area and I have regularly seen rents advertised that high. 

    Sure, the bank was CACL in Pottsville. I am not 100% confident in those numbers, but I used to work (and am in a fantasy football league) with the manager there and just shot him an email asking for some general numbers. They are pretty friendly there! 

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  • Bobby Weaver
    OP
    Pottsville, PA · Member since 2016 · 7 posts · 1 vote
    10y

    @Mike O.Thanks for the warm welcome! 

    Cool! Where are you overseas? I have also always been skeptical of the market in this region, too - I still am. When doing the numbers I assume a 12.5% vacancy, or a realistic 1.5 months per year of vacancy. I guess to be even more safe I could increase that number to 2 full months of the year being empty 16.6% - I don't know. The areas I am looking at are usually a little bit nicer and the apartments mostly two bedrooms, some factors which can help with keeping tenants. I do plan on managing the properties myself for the time being, so I haven't looked for any property management in this area yet. 

    0Reply
  • Bobby Weaver
    OP
    Pottsville, PA · Member since 2016 · 7 posts · 1 vote
    10y

    @Nancy L.Hello! It is really really great living over here, Nancy. Round trip tickets out of JFK to Bangkok are usually only $600-$700 and living very well over here for less than $1,000/m is extremely easy and possible. My wife and I will be in Thailand for roughly 4 months are our total expenses come in just shy of $700 per month. 

    I have a more in-depth analysis sheet on that property which factors in all of the real costs on that specific property in detail.  It ironically came in right 48% of the Gross Income, so I just rounded up to 50% to add some padding and make it a clean number.  

    Thanks for the tip about CL/Zillow and the re-rent and other fees :) 

    0Reply
  • Bobby Weaver
    OP
    Pottsville, PA · Member since 2016 · 7 posts · 1 vote
    10y

    @Charles McCabeYes! While the NOI in the linked overview I sent is based on the rough 50% gross income rule, I have done a full workup of the expenses which comes in just under (48%).

    Thanks! I'd love to verify some of my numbers in someone else's model. I'll also check out that buy and hold calculator by BP. 

    That financing could be inaccurate. That loan was mentioned in an email with myself and friend of mine who is a manager at a local credit union. 

    Thanks for the help, Chaz! 

    0Reply
  • Mike R.
    Investor · Orwigsburg, PA · Member since 2016 · 28 posts · 5 votes
    10y

    Cool, thanks @Bobby Weaver. I thought it might have been CACL.

    Yeah, I think $650 is more common in the Orwigsburg area though I don't doubt some Pottsville landlords are getting that much in nicer areas with nicer buildings. 

    0Reply
  • Nancy L.
    Philadelphia, PA · Member since 2014 · 178 posts · 64 votes
    10y

    @Bobby WeaverThat's awesome! Thanks for sharing! It's on my bucket list of things to try. I'd have a hard time turning things over to a property manager, they won't watch every penny and take as much care with upkeep and tenants like I do. But it's probably easier if you set things up that way in the first place. 

    Good luck!

    0Reply
  • Mike R.
    Investor · Orwigsburg, PA · Member since 2016 · 28 posts · 5 votes
    10y

    @Bobby Weaverdo you remember whom you spoke with at CACL? I called up and talked to a loan officer named Ryan. He said they don't do non-owner occupied investment loans. Perhaps your guy was assuming you'd be living in one of the units.

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