All Forum Posts by: Aron Teran

Property was listed for $140, we made an offer at $130, they countered at $135k. Based on comps the ARV is right there...very little work needed. Appliances are on the older side but no major issues discovered during home inspection. Factoring in slightly higher closing costs and repair costs than initially projected, we are looking at an approx. 9.5% CoC ROI.

I can definitely cover the cost of it is vacant, especially because I have a 50/50 partner on the deal. I guess the real question I've been asking myself is "what is the most important number to focus on with a buy and hold?" Is it the cash on cash ROI or something else? Based on some new information and factoring in 10% for a property manager (even though we will self manage), it looks like the CoC ROI will be more like 8.5%. Is it still a good deal or should we patiently wait for a property giving a double digit return?

Thank you, I appreciate the advice! 

I'd love some feedback on my first potential deal....prepared to ratify the contract. Details:

Duplex purchase price: $135,000

25% Down Payment: $33,750

Closing Costs: $4000 (projected)

Combined monthly rent: $1350

Annual Property Tax: $2260

Both units currently have month-to-month tenants

Assuming 5% each for vacancy, repairs, and capex

Will self-manage

$70/month insurance (projected)

30 yr mortgage @ 4.75%

Monthly Cash Flow: $371

NOI: $10,672

CoC ROI: 11.5%

This is assuming no issues arise during due diligence and the home inspection. Thoughts? Am I overlooking anything?

Thanks in advance!

Thanks everyone! 

I would like to purchase my first investment property early next year. Targeting either a single family or small multifamily to implement the BRRRR strategy. After chatting with a friend (who is also my CPA), he mentioned that he would be interested in doing a deal together. A few questions: 1) Would you recommend/advise against partnering up on my first deal? My friend does not have real estate experience, but his involvement would reduce the amount of cash I would have to bring to the table and/or open the door to more expensive properties/projects. While there certainly is value there, part of me just wants to go through the process on my own. 2) If you recommend partnering up, how do partners typically handle division of labor? I think I would end up working with the contractor during the rehab process and I also would like to personally manage the property to maximize cash flow. I imagine he would handle the accounting/legal side. Does that seem like a reasonable division of responsibilities? Any and all advice is appreciated!

Originally posted by @Corey Melkonian:

The bank usually gives me a 6.5% construction loan, that sounds like a great deal. I'd run with it. Is it a owner occupied rate?

 Not owner occupied, up to 4 units. I was a bit taken aback by the rate, which is why I wanted to run it by the forum. 

Yes, 20% down, fixed rate for 5 years, then an increase of up to 2% per year with a max increase of 6% for the duration of the loan, which is 20 years. My intention would be to refinance well before the 5 year mark.

I've started doing some research on how to best finance my first investment property (buy and hold). Met with a local bank, they offer 80% loan plus rehab costs in a 5/1 ARM at 4.5%. I will be looking for a home in the $60-$85k range, so I am estimating no more than a $100k loan. The rehab $ is paid out in installments as work is completed. This seem like a great rate, especially considering the fact that I'd rather not pay cash for rehabbing.

Am I missing something here?

Thanks @Michael Boyer and @Russell Brazil. I guess there is no replacement for just doing it. I appreciate your advice!

Thanks all, appreciate the advice!