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!
Rental Property Investor · Doylestown, PA · Member since 2008 · 1k+ posts · 1k+ votes
6y
Congrats @Nicholas Sheridan, Jr. - that's something I try to advise all new investors of. Unless you have unlimited savings and/or insanely high income, you need an escape plan for you money. How are you going to get your money out of the deal? Your financial situation will determine what % you need to get out and over what time frame. If your goal is to build a large portfolio you need to deploy your money strategically. That can be by BRRRR, seller financing, seller 2nd, getting a money partner, assuming a mortgage etc. You don't have to pick one strategy. I'm often in the position of considering multiple acquisitions, developments and rehabs. And I map everything out in a timeline to figure out how to make them all happen using different strategies for each.
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
@Salvatore Lentini very smart, yes I definitely should have put down less money on this one, that was my biggest mistake for sure. What is assuming a mortgage?
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
Thanks @Nick Coble the next big hurdle (I am sure every investor has this issue) is securing financing. Just remember that there is no need to learn absolutely everything about REI before you jump in
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
@Steve LeBlanc if your PM is charging you 15% they better be doing the repairs themselves lol. 15% is the highest amount I have ever heard, I am pretty sure that on BP 8-10% is common, my 5% is already locked in with a PM.
Investor · Denver, CO · Member since 2016 · 181 posts · 242 votes
6y
@Ryan Nguyen Did the 9 hour drive there for the inspection and drove back the same day with my wife (yes we are still married haha). Then after closing drove there again for a weekend to do some rent ready items.
Rental Property Investor · Dracut, MA · Member since 2020 · 24 posts · 4 votes
6y
@Nicholas Sheridan, Jr. how was the process of the quitclaim transfer to the LLC?! I have a few properties I would like to transfer to my LLC but have no idea how get it started.