All Forum Posts by: Benaiah Grimes

Please break down math so I know how to read it like you're reading it. I figured the second option was better due to the sheer number of rentals. However 200k down just to get a 4500 mortgage is expensive. How can I look at numbers and immediately tell if the numbers are off? What do I look for? I'm looking for cash flow because I plan to hold. Nothing to be done for option 2 its renovated already.

Congrats Cameron. If you don't mind me asking. You started investing before you got laid off? The banks allow you to purchase based on your investment income alone? I always wondered how that works. For instance I am in the middle of closing on my townhouse I am getting built and it will be finished mid June. I cannot do anything until closing is completed. While youre in between closings you're not supposed to put a contract on anything else. So during this time you just wait for closing so it doesn't affect score?

Also, say for instance you already have a residential mortgage, then one multi-unit you're closing on. The bank originally bases approval on projected tenant earnings but uses your income only as a qualifying test to see if you can afford the mortgage on your own and then once 100% occupancy its based on the rental income? How do banks allow you to get 1-5 deals in a year if you have 1-5 mortgages? I understand you have income coming in but how do banks judge whether you're maxed out? Or is there no limit?

Thanks,

Benaiah Grimes

Option #2 is fully gutted and renovated. Ready for move in if necessary for the other units which are vacant. Easy rentals.

Hellow fellow BP's I have a question about numbers. I need to know how to guage whether an acquisition is worth the purchase or not. I want to get used to scrolling through the MLS and do then numbers in my head based on expenses and NOI.

Here it is: Please break down why this is or is not a good deal:

Deal #1:

$750,00 price
4 units
NOI: $58,827
Gross Income: $72,264
Gross Rent: 5,900 month or $1475 per unit
Expenses: $13,437
Taxes: $10,693.34 yr
Sq ft: 3060

100% occupancy

Deal #2:

$1,300.00 price
24 units (2 bldgs being sold together) 12 units a piece
Gross Income: $200,333
NOI: $110,012
Gross Rent: $14,111 month (varying rent levels for 1,2,3 bdrm)
Expenses: $90,322
Taxes: $13,330
Sq ft: 3457

80% occupancy.

Help me with the numbers please. What is considered a good deal? I thought about it and I'd prefer to start off with at least 4-8 units. The larger property is my max but obviously thats $200,000 down for 20%, so I'd have to sell a property to get that amount down. Is it worth it?

Thanks,

Benaiah Grimes

Kenneth LaVoie that actually makes sense but for 5+ the financing is harder and id have to go conventional which means 25-35% down correct? If you paid 220k that means you put down $55-77k which is how youre yeilding big returns right? What stupid mistakes did you make. I can come up with the money between my brothers and I, but I just wanted to make sure I invested wisely for my first purchase. Tim Gordon are you joking or serious? Ned Carey I see this is going to be a strong learning curve but I am up to the challenge. I guess there are no clear cut answers I just have to jump out there and see and ask questions along the way. Ok next question pertaining to rehab. What is the best way to find a decent crew? It seems like everyone and their grandfather claims they do efficient rehab but I am definitely type A and if I pay someone to do something I want it done right and neatly the first time. Does everyone agree to do the minimum and standard? Stark white walls, regular appliances (nothing top tier like stainless steel), redo carpet and paint is all I need? Or to get prime rental rates I should do a nice rehab with sterlnig silver appliances, and good cabinets? Buying an 11-15 unit would be costly to rehab each unit so what did you do to keep costs down Kenneth?

B LewisKelly N. so basically build a good reputation with a bank here and find out the qualifications to finance properties. I would like to get a MF by the end of the year. I will have the 25% down and closing but I am trying to find out how much of a property to buy and where. In Baltimore, MD you can buy $50-$70k and rent for $1000-1200 per unit, but in Washington, D.C. you can purchase fourplex for $500,000 but charge anywhere from $2000-$2500 per unit. Almost doubling your investment but the mortgages are soooo ridiclously high out here. Paul Timmins ok so don't worry so much about fixing everything, fix what needs to be fixed cosmetically to make it look preesntable but no need to go all out. How would I find someone that has something under contract and why would they split proceeds with me if they already have it under contract on their own? What do you consider an experience owner someone that already has a property or someone thats been investing for year? What is the standard for experience?

B Lewis I have spare time after 4 and on weekends. I don't mind paying a good team for rehab but how does that work when tenants live in the building? Do it while theyre at work? If I buy something I would want to do a few cosmetic changes, but many people say to leave it as it is and recoup money before making it "pretty" so to say. Do you agree? I just feel like anything I own I'd like my tenants to like. Everywhere I've stayed (renting in undergrad) was nice. Even if its not in the best area, I would like the interior to be decent. I've heard so many stories about slum lords and I don't want to be like that but I also don't want to pour all this money into properties and not get my ROI. What is your opinion?

Kelly N. so as long as I have 20% down of whatever the property costs I will be approved? So basically cash is king is what you're saying and I don't really need to worry? If I put down a large amount I would like to start with a fourplex. Is it better work with a realtor or a broker?

Donald Hendricks what do you do exactly? Thanks for the laugh I needed that today.

Hello all,

My name is Benaiah Grimes and I am new to this arena. I recently inherited four multi units from my grandfather that are operating in Las Vegas but the proceeds are split four ways between family members. It is a great asset, but I would like to start my own assets our here in MD. I believe having these properties can be used as a great tool for collateral and the bank since they are such penny pinchers due to the economy but I am really trying to see what I need to do in order to start with a fourplex here in MD or Baltimore. A good friend of mine started with houses and rents out rooms making about $2000 a house and he now has 10 houses bringing in over $20k a month, however I don't want to do it this way. I would rather have several multiunits to avoid having to manage so many different properities and effectively recreate the same income. He purchased a house in full with cash, built up the equity and borrowed to purchase new house, etc. I would like to do the same and start in Baltimore since the duplex's, etc. there are cheap. I would love to do a group meetup. I have also noticed the charge just to go to these so called investment meetings. I look forward to meeting with experienced people and possibly teaming up on something big by the end of the summer.