I just closed on my 9th rental

Real Estate Deal Analysis & Advice

I just closed on my 9th rental

Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes

I am getting closer to my goals! I closed on number 9 today. It is a 4/2 ranch with a 2 car attached garage. I bought it for $133,000 which is more than I have bought any of my other rentals for, but the market and rents keep improving. This home needs very little work; only a but of paint. Has new windows, newer kitchen, newer hardwood and baths.

I put 20% down with a 5/1 ARM at 4.625% and my payment with taxes and insurance is $642. The home should rent for around $1,300, maybe $1,400. There were multiple offers on the first day of course. I think being a Realtor and knowing the listing agent helped me out on this one. Asking price was $134,900.

It was purchased off of MLS just like almost all of my deals. For those saying you can't buy off MLS, I have 6 fix and flips going, 5 of which were from MLS and one from the trustee sale.

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Jerry W.Pro Member

Moderator

Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes

Congratulations @Mark Ferguson . I think what I like about your portfolio is that they are all very nice houses. I only have one house purchased for over $100,000 and I struggle to get $800 a month for it. Using the 50% rule you would not have cash flow, but the reality is that it costs just as much to put a roof on my $50,000 rental that I get $500 per month for as it does to put a roof on your $130,000 rental you get $1,200 a month rent for. I doubt your taxes, insurance, vacancy, repairs run more than $300 or $350 per month. Yours have the added bonus of having a high demand 2nd exit strategy of selling to home buyers. Very nicely done.

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Sharon Tzib
Real Estate Broker · Cypress, TX · Member since 2013 · 824 posts · 470 votes
12y
Congrats, Mark! You'll be at your goal before you know it :)
0 Reply
Adrian Tilley
Residential Real Estate Agent · Broomfield, CO · Member since 2013 · 390 posts · 125 votes
12y
Congratulations @Mark Ferguson

With 3% on the front, it really only cost about $129k.
0 Reply
Jonna WeberPro Member
Moderator
Investor · Boise, ID · Member since 2011 · 1k+ posts · 736 votes
12y
Way to go, Mark! Good time of year to close on a house too - lots of renters will be out looking soon.
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Mark UpdegraffBusiness Member
Real Estate Broker · Rochester, NY · Member since 2010 · 1k+ posts · 706 votes
12y
@Mark Ferguson Nice Job! I agree that networking with other agents is a key component to getting deals. That's also what brings on rivalries and the little black book ;-)

Nice work!
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Mark Ferguson
OP
Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
12y
Thanks everyone!

@Adrian Tilley Your right I did save 3% on the buy side since I am an agent.
0 Reply
Gautam Venkatesan
Investor · Dallas, TX · Member since 2013 · 619 posts · 128 votes
12y
Hey @Mark Ferguson

I thought you usually bought your rental properties with a minimum 20% equity... are you purchasing at market value nowadays? Either way congrats on #9!!
0 Reply
Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
12y
Inspiring Mark. It's official you are now on my unofficial Northern Colorado advisory board!

Thanks,

Matt
0 Reply
Utpal Sinha
Edison, NJ · Member since 2014 · 1 post · 0 votes
12y
hi congrats mark

I have just signed up today and hope to learn from al the great minds here

What do you mean by "It was purchased off of MLS just like almost all of my deals"
0 Reply
Stephanie Hopwood
Rehabber · Arvada, CO · Member since 2013 · 9 posts · 0 votes
12y
Congrats Mark! We are convinced my husband needs to get his license as well. We keep hearing about deals like this off the MLS. Just waiting for the school year to finish and he'll start.
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Brant Richardson
Investor · Santa Barbara, CA · Member since 2013 · 658 posts · 315 votes
12y
When he said "off the MLS", he meant it was in fact listed on the MLS.

What is your goal Mark? Happy for you that you added one to your portfolio.
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Mark Ferguson
OP
Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
12y
@Gautam Venkatesan I do buy below market. This one is below market even though it doesn't need much work. I could paint a little and sell for 155k

@Matt R. I would be happy to advise you on anything northern colorado

@Utpal Sinha I meant I found the deal on mls. I may have worded that poorly. Many people say they can't find deals on mls anymore. I think you can still can find them.
0 Reply
Travis Christl
Real Estate Agent · Victoria, MN · Member since 2013 · 56 posts · 29 votes
12y
Where can u find bank loaning you 80%. I own 4 and every bank/ mtg broker I ask says no or that I need 25% down. I have excellent credit and all 4 cash flow well.
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Mark Ferguson
OP
Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
12y
@Brant Richardson I want to buy 100 SFRs by January 2023.

@Travis Christl I use a local portfolio lender. They let me do 20% down arms on as many properties as I want.
2 Reply
Ronnie Boyd
Fix & Flip, Wholetailing, · West Columbia, SC · Member since 2013 · 215 posts · 60 votes
12y
Nice job on getting #9 !! How many of the nine did you secure through the portfolio lender Mark??

congrat's again !!
0 Reply
Travis Krause
Investor · Madrid, IA · Member since 2013 · 1 post · 0 votes
12y
Congrats Mark. Your market is very similar in pricing to what I am familiar with here in Central Iowa. I've read your blog and love your Big plans. My question is why a 5/1 ARM and not a traditional 15 or 30 yr loan? What are advantages and disadvantages and how does this help you reach your goal? Thanks!
0 Reply
George P.
Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
12y
Originally posted by @Travis Krause:
Congrats Mark. Your market is very similar in pricing to what I am familiar with here in Central Iowa.
I've read your blog and love your Big plans. My question is why a 5/1 ARM and not a traditional 15 or 30 yr loan?
What are advantages and disadvantages and how does this help you reach your goal? Thanks!

He sells some so no need to get a longer term. If nit , he will refi in 4 yes

Mark u are catching up to me. I better hurry. Lol

I will write a post next Thursday. ;)
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Account Closed
Rental Property Investor · AZ · Member since 2013 · 213 posts · 50 votes
12y
Congratulations Mark!
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Bobby Beard
Real Estate Investor · Panama City, FL · Member since 2012 · 265 posts · 58 votes
12y
I'm jealous! Congrats!!!!
0 Reply
Mark Ferguson
OP
Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
12y
@Ronnie Boyd 8 are with my portfolio lender and one is paid off.

@Travis Krause my portfolio lender only offers arms or 15 year fixed. Cash flow is way higher with an arm and I plan to pay them of before they adjust.

@George P. how many do you have again? I actually only sell my flips.

Thanks Michelle and bobby!
0 Reply
Rob K.
Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
12y
Congrats on #9, land baron! I'm curious why you are taking out mortgages on new ones and paying off old ones? Instead of paying closing costs and appraisal fees on new purchases, why not leave the old loans intact and use that cash for new purchases and avoid all those costs?
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George P.
Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
12y
Originally posted by @Rob K.:
Congrats on #9, land baron! I'm curious why you are taking out mortgages on new ones and paying off old ones? Instead of paying closing costs and appraisal fees on new purchases, why not leave the old loans intact and use that cash for new purchases and avoid all those costs?

this is a good question. my guess is that he does not have 133k to put down and the CoC return would be a lot lower if he did. so instead he is just accelerating his monthly mortgage payments.

i do it like him (mortgages), but do not speed up the payments. i have no interest in doing that and think its not a wise financial decision not to write off the interest.

mark, i am on #10 rental.
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Darren SagerPro Member
Investor · Tampa, FL · Member since 2013 · 2k+ posts · 1k+ votes
12y
Way to go @Mark Ferguson on #9! Keep it up and don't take your eyes off your goal!
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Jerry W.Pro Member
Moderator
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
12y
Congratulations @Mark Ferguson . I think what I like about your portfolio is that they are all very nice houses. I only have one house purchased for over $100,000 and I struggle to get $800 a month for it. Using the 50% rule you would not have cash flow, but the reality is that it costs just as much to put a roof on my $50,000 rental that I get $500 per month for as it does to put a roof on your $130,000 rental you get $1,200 a month rent for. I doubt your taxes, insurance, vacancy, repairs run more than $300 or $350 per month. Yours have the added bonus of having a high demand 2nd exit strategy of selling to home buyers. Very nicely done.
1 Reply
Mehran K.
Investor · Wichita Falls, TX · Member since 2010 · 3k+ posts · 603 votes
12y
Grats @Mark Ferguson , It's great following you as you grow your portfolio. I enjoy your blog posts and your updates.

Just closed on #6 Thursday and got an accepted offer on #7 yesterday. It's a great feeling. I buy in the $25k-$60k range though.
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Mark Ferguson
OP
Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
12y
@Mehran K. thank you and congratulations!

@Jerry W. that is exactly how I feel. I don't pay attention to the 50% rule at all. My $642 payment includes taxes and insurance.

@Darren Sager thank you and I won't.
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