Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
Just closed on my first SFH 2 weeks ago and I am AMPED to have finally defeated paralysis analysis and joined the club. Quitclaim deed has been initiated and the property is officially in the LLC's name. Let the fun begin! Here are the dirty details:
Purchase price: $112,502
25% down
3.375% int rate (paid ~ $1,500 in points)
3 bed 2 full bath with 4th
non-conforming bed in the basement
Detached garage and carport
Property taxes $1,127
Insurance $1,050
Property management 5%
Rent $1,250
Vacancy rate 5%
Maintenance and repairs 6%
Oh **** fund 5%
Cash flow $421/month
My main issue going forward (like many fellow investors) is having enough capital to purchase more properties. I am able to find great (> 1% on the 1% rule) properties but I don't want to wait 6 months to save up enough cash. Time to get the BP book on no and low money down and also find some partners!
Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
6y
@Nicholas Sheridan, Jr. in light of your post, we are going to officially relabel the “capex reserve” in our calculators the “oh sh** fund”. This is far more intuitive.
Congratulations on what seems like a great first step!
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
@Joseph M'Mwirichia I'm not a betting man, I save that money for a down payment! I wake up every morning to my goal on a sheet of paper right next to my bed. Lets make it happen!
Rental Property Investor · Los Angeles, CA · Member since 2019 · 15 posts · 15 votes
6y
@Nicholas Sheridan, Jr. Congrats Nicholas! Inspiring to see someone take that step forward! I'll hopefully be moving past analysis paralysis soon as well. Best of luck to you on your journey!
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
@Jacoby Atako this one was on the market for a day and I saw it pop up. Also had leads coming in from turnkey companies just in case something good came up
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
@Kaitlyn Nesbitt thank you and same with yours! One big thing I learned was to do the full inspection. The sewer scope ended up saving me a few thousand dollars off the purchase price. It's a good idea to be there for the inspection as well
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
@Omar T Sharaf thank you! Good luck to you as well. The biggest obstacle was purchasing out of state and out of driving distance. I grew up doing rehab/diy work around the house and it was difficult to pass off using those skills.
Rental Property Investor · Mechanicsburg, PA · Member since 2018 · 281 posts · 176 votes
6y
@Nicholas Sheridan, Jr. Congratulations Nicholas. That is exciting! Best wishes on your REI journey through all the excitement, surprises, analysis hours, learning and finding those next deals.
Rental Property Investor · Lamar, MO · Member since 2020 · 42 posts · 14 votes
6y
@Nicholas Sheridan, Jr.
Awesome! I'm just getting started as well but my deals aren't done. I have found a semi-local small bank that will loan 85%LTV and use equity from other assets without cash. That's been the hinge in the 5plex deal I'm working now.
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
@Nick Coble 15% on a commercial property is very good. Make sure you go through all of the fine print. I have never heard of that unless it was hard money. Maybe bring in a partner?
@Nicholas Sheridan, Jr. Congratulations on taking action and getting the first property under your belt!
You may want to reconsider your goal of 100 doors however. As @Joe Villeneuve often points out, focus on the cash flow not the number of doors. What is your cash flow goal you're shooting for? Would you rather achieve that with 10, 50, or 100 units? More units might bring more diversity to your portfolio if you're lucky, but they will most certainly bring more headaches even with property management.
Don't buy a property because it gets you closer to your # of units goal. That mindset will lead you down a path where you're accepting a marginal cash flow because it adds to your unit count. Focus on the deal.
@Nick Coble 15% on a commercial property is very good. Make sure you go through all of the fine print. I have never heard of that unless it was hard money. Maybe bring in a partner?
Yes, it's legit. I got the referral from another investor that has done many deals with them. 15% @25 years. It's a small portfolio bank. I might look into bringing in a partner at some point. I need to get these couple of deals up in wraps to prove to my wife this will all work before I move much further along.