All Forum Posts by: Bob S.

hello, really my first beefy post... signed up a while ago and ready to commit!

my wife and i are 42 years old, dual income, no kids (working on that)... we bring home 15k/month after taxes. we save at least 2k a month. our mortgage is $3700/month, locked in at 2.875%. we don't want to/care about paying it off as any other income (stocks, etc.) will easily beat this rate over time.

we have about 200k in investments, 20k in liquid cash (spent 150k or so in the last year for health, fertility, and home renovations), my 401k has 775k, wife's has much less due to health issues...

we want to either buy rentals (i see this is a rocky risk) or small businesses (Codie Sanchez just opened my eyes to this). other options that sound feasible?

i guess the big question is - where should we start? anybody in a similar situation? we'd like to slowly build a small empire of ownership of local businesses.

i'm focusing on seller financing or SBA versus OPM... those options sound more feasible.

i really don't want to crowdfund real estate, etc... i'd rather own my own businesses, flat out.

we're ready to fail.... and also succeed :)

thanks.

hello! haven't posted in a long time so please be gentle...

my wife and i purchased a piece of land 3 years ago to build on (for ourselves). instead of building, and due to the madness of "covid" times, we ended up buying a house instead.

we've been attempting to sell our land for 3 years now and have had 5 contractual offers. 2 of the buyers ducked out during attorney review for valid reasons (the land is near a landfill that's defunct), 2 because "they didn't know building was so expensive" (come on, do your research), and 1 recent offer backed out three days before closing!

i'm wondering if we're "doing something wrong" here. we have a strong RE agent and attorney team. they do everything they can; maximum exposure, covering our a**ses, etc... and deals keep falling through.

it's a very nice (subjective, i know) piece of land (1 acre) in residential chicagoland.

does anybody have any tips to get it sold? we have until spring of 2025 until our balloon loan either has to be refinanced or paid off (we got this loan because we intended to build, of course) and now i feel like it's a ticking time bomb.

we conducted "clean and satisfactory" (no issues whatsoever to build) soil and foundation tests and provided those to every buyer. it seemed (not quite sure here) like they backed out once they reviewed the tests - yet there is nothing negative in them. we will not be providing these tests moving forward (as we had to do them ourselves and feel that each buyer should do their due diligence moving forward!) and modified our listing to remove these offerings.

thoughts anybody? help! TIA :)

@Account Closed - Sure we learn from our failures but this isn't my way of going about it - considering it could be a $70k+ down payment... I'd rather do the math and evaluate the property to be "nearly" certain it'll cash flow.

Good questions to start with @Kyle Myers - this gets my wheels spinning.

I will self-manage and I live very close.

Landscaping, snow - these are not factored in besides the maintenance percentage (5%) I listed in my post.

I have no idea if the place needs rehab; all units are currently occupied and there are no images of the inside.

Closing costs - hadn't thought about this; would attempt to roll into the mortgage payments - maybe $100/month extra?

My overall goal is to "make some extra money per month" but I am very satisfied with income from my current job.

Hi All. I've only posted a few times as I've been trying to "simulate" deals as I find them - but haven't jumped on anything yet.

I originally considered condos but they are out of the question now due to HOA irregularities and unexpected circumstances. I'll leave it at that.

Can somebody analyze the work below for me and let me know if this is a potentially good deal?

4 Unit Building (one floor/ranch style) - located in Chicago suburbs. Asking price $389k. Built in 1962.

$3475 gross rent or $41700 annual rent

$8044 annual tax

Tenants pay electric

-- Let's also add in...

Insurance - not quite sure on this one - let's call it $500 a month? I have no idea honestly - nor do I know how to figure this out.

10% overhead for vacancy or - $347 per month

Replacement/maintenance reserve at 5% - $174 per month

Net profit per month: $2454 - is this accurate?

If I put 20% down on a conventional 30-year mortgage at 4.25% (the current going rate), the monthly mortgage cost is $2307.

This nets me a minimum of $147/month and maximum (with no need to use any reserves and no vacancies) of $668.

Am I doing the math correctly? Am I missing any factors? Am I "playing devils advocate" suffciently?

That's it for unit details that I have without approaching the seller.

great replies so far folks! this is truly helping my decision process. keep them coming!

i've had a really difficult time grasping why condos are a bad option for buy-and-hold investments. that's the feeling i've been getting from the forums - and even the Rental Calculator; it doesn't have an option for Condos... maybe i'm being too literal.

for example, if i buy a multifamily, i have to maintain the entire building and landscaping around it. if i choose to outsource the maintenance, i pay the premium for that.

if i buy a SFH, same deal as above.

if i buy a condo, i pay an HOA which, of course takes a bite out of my bottom line as well. i've read that condo associatons can be a mess and special assessments could happen - but of course i would do my own due diligence to research this ahead of time. nobody can always predict all possible issues.

however, the same can happen with a MF or SFH... a roof can go bad. siding. windows... etc. - capital expenditures happen.

so... how is this different than these potential issues with a condo?

i see this as "there is no perfect option" - but the best one that suits you. in my area, SFH and MF aren't affordable enough for me to start out with. i find condos as a good starting option (seeing cap rates of 6+% etc.) for me, and i can build on investments from there.

thanks ahead of time. i am sure i am misinformed in some ways and/or not understanding this appropriately.

@Matthew Paul - spoke to the Wife and she is not comfortable with keeping our house as a rental. she strictly thinks the new tenants will beat it up and leave it in a state where we'd have to sink money into it to fix it up before selling. also, if we hold it for a number of years, she is fearful that it will be "out of date" and we'll need to sink money into it to remodel it as well.

i am more of a risk taker than her and do not agree but we have to come to a consensus.

we also would likely need the profit of the current home to move into the next home - for a down payment.

creative options/ideas?

thank you.

 hey Matthew - very good point. my Wife and i have been living in our current home for about 7 years. we have a decent amount of equity. we are looking at a new home as an upgrade and i have been tinkering with the idea of renting our current home out instead of selling it so we can build even more equity.

the rental estimate versus what we pay per month would be tight; we wouldn't profit much. this is a concern.

secondly, renting the current home eliminates any profit for a down payment for the new home. however, i do realize the direction you are recommending; "park" the "100k" in the new home and keep the current home as a rental property?

as an aside, both of our credit scores are excellent so this helps.

 hi Frank - great outline above! thank you.

i've been reading as much as i can get my hands on for about a month now. that's just a base; i find talking to folks involved in this area to be invaluable.

fortunately i've built a team in the past before i even knew that i'd be getting into this. i have a broker and lender at bat already. i'm looking to expand on investment partners as well.

our goal (my Wife and i) is financial freedom - eventually. i'm 37 years old - and starting now is better than nothing!

where did you find a 4.5% apy account? we have our savings parked in a high-interest one as well, but that's an outstanding rate.

flips "scare" me - but anything that scares me is something i'm willing to try. i find it intimidating to find a flip team. i'd rather not do any/much of the work ourselves - that wouldn't be passive income. any tips? forums or posts to focus on?

thanks again.