All Forum Posts by: James Lusk

https://www.biggerpockets.com/buy_and_hold_results...

Try this link and see if it works for you. I ran your scenario through the calculator. I don't see this being a profitable deal for you. My biggest concerns are

1) small down payment

2) high purchase price (not sure exactly where this property is in Tacoma)

3) low figures for maintenance (we are factoring 10% for maintenance and 5 for capex)

4) no vacancy factored in (unless that was part of your $4000)

My wife and I just closed on a 4-plex in Midland. We paid $320k and put 25% down. All the units are 2/1 832sf. Current rents are 800 and we will have them up to 950 after some repairs. Check my link here to our property's analysis. https://www.biggerpockets.com/buy_and_hold_results/204764.pdf

Let me know if either of these links don't work or if you have any other questions.

This question was perfectly timed. The latest podcast, 196 with Brandon Hall goes over LLC vs S-Corp vs C-Corp. He has lots of great pointers in there. If you had any more detailed questions after listening you could ask Brandon on the show notes too. Best of luck!

@Kathleen R. We will be raising the rents and each tenant will have to go through our background checks and what not. If they don't meet our standards and/or don't want to pay the increased rent, onto the next.

Ok, so what I have gathered is that at closing I will receive a separate check for the sum of all security deposits. I am hiring property managagement and it was recommended that I distribute these funds to my PM so he can return the funds to tenants as needed. So it sounds like you are self managing, correct? If so, you will have a hard check to take to the bank after closing. 

@Kathleen R. I did not receive estoppel letters. We got all the leases which are month to month, as well as the expenses. The current owners are an older couple who are in and out of the hospital and have terrible bookkeeping so it's been a tough getting good documentation. We still feel comfortable with the market and rents here so it wasn't as big of a concern. I will check into the security deposits with my broker and report back.

Thank you, I didn't want to hijack your thread! I was wondering if security deposits will be transferred direct to our designated account through escrow, do you know?

Congratulations! My wife and I are going through the exact same process right now as we are closing on our 1st 4-plex here in the Seattle area this coming week. These are all the exact questions I am currently trying to answer for us, so I will be watching this thread. Best of luck!

@Justin Peila Are you doing fairly extensive rehabs on the foreclosures? If so, are you not having permit wait time issues?

@Rudy Manna Hey Rudy. What are you factoring in for expenses? It could all come down to that. If someone else isn't factoring in management or capex. I haven't been actively seeking single families as we are working small multis at the moment but the 4 plex I am closing on in S Tacoma is at 1.25% with 7% for management, 5% vacancy, 7% repairs, and 5% capex. 

Way to go! I always love to hear success stories, but even more so when it's a new investor. 17 cap, yes please! Keep it up

I am an electrician. Pull your permits for two reasons 1) You will have everything documented when it comes time to sell. A buyer can find out if you pulled permits or not. 2) This will keep the contractor honest to a certain extent. They can still cut corners somewhat but the big safety concerns should be caught by inspections. I would be feeling sketched out by your contractor if I were you. It sounds to me like he is really trying to cut corners. Granted that could be because you are pressing his timeline. Me personally, I won't compromise my work quality for someone's timeline. Have it done right and you won't regret it in the long run.