All Forum Posts by: Benjamin Aaker

Hi Jake,
Welcome to BP!

This is your first one, so go long term rental and get a property manager. 

Hi and welcome. Are you looking to invest in the US or in Colombia? I usually recommend to invest in your neighborhood, but don't know anything about your market.

Hi Michelle, nice to meet you. Don't spend too much time at the Schlitterbahn!

Hi Mustafa and welcome. Good luck with your investments.

The problem that you will run into is that, as an investor, you'll want to use the income method to calculate the value, but 4 plexes and down often sell for whatever the market is doing and right now the market continues to be up. That means your seller will be thinking it is worth a lot more than you do (though this phenomenon is less pronounced as you go higher from SFR to duplex to triplex to quadplex. For the market, you should ask an agent in your area who deals with these types of properties.

For an investment, very roughly, I'd look at the monthly rent for each unit x 4 units x 12 months for the annual income. Ignore pets unless you know there will be pet rent all the time. That's 825 x 4 x 12 = 39,600. Estimate 50% of this to go to expenses (everything but the mortgage and capital expenditure). You might be able to do better than this, but starting out, go conservative. That leaves 19,800 in net operating income. Subtract 5% of the gross income for cap ex (39,600*0.05 = 1,980). Removing that from your NOI leaves 17,820. That's the maximum annual mortgage you can pay. For this property, it turns out to be about $222k if you don't put anything down and have a 30 year amortization at 7% rate. 

You are finding out what many do, as an investor you have to pay less than retail buyers. You'll either need to go bigger or find value-add properties that the typical buyer wouldn't buy. Don't spend any money evaluating this place until you can agree on a price.

Buy first. If you sell, you'll need to find a place to stay. Don't do a sale contingency since you don't need the money. Once you close, list for a reasonable amount so it can sell fast and you are done. The only risk is if the sale doesn't happen quickly enough and you have two mortgages; but that's why you followed the advice in the previous sentence. 

Quote from @Saed Rabu:

@E.J. McCaffrey 

Thanks for your thoughtful response,

While I understand your perspective, I personally believe this kind of event isn’t just a remote possibility—it’s inevitable. I’m certain that within the next five years, we will face a major war or even a nuclear conflict. I’m not asking hypothetically or out of paranoia—I genuinely know this is coming, and that’s why I’m actively seeking real strategies to protect my investments. If I didn’t feel this was unavoidable, I wouldn’t be asking these questions or hesitating to expand my portfolio.

It's good to consider the possibility, but if you are correct, why would you even consider investing in real estate? Investing is all about determining the risks and managing them. If you believe the risk is too great, then you might want to buy gold.

Hi Kenneth, It'll be tough to find someone you trust and can work with on a single post here. You might want to try doing some networking locally at the REIA.

Always a problem when managing remotely. Get a boots on the ground person, set up a camera in the unit (may need to inform the contractor depending on your area), set up draws in advance and require photographic evidence from the contractor are a few options.