All Forum Posts by: Brian Adzadi

Hello BP, 

Long time, no talk. I am in the midst of acquiring my first rental property. My dilemma is I am looking at 2 properties that are polar opposites when it comes to cash flow. Here is how the numbers stack up: 

Property A. 

1. Purchase price: $164,900 4 unit Building with a storefront rented out, Parking lot rented

2.  Mortgage (Tax & Ins. incl) if bought @ purchase price: $1,455.37

3. Gross Monthly Income: $2,490 Gross Yearly Income: $29,880

4. Yearly Operating Expenses: $5,180 Net Yearly Income: $24,700

5. Monthly Cash Flow: 1,034.63

Property B. 

1. Purchase Price: $110, 000 2 unit building 

2. Mortgage (Tax & Ins. incl) if bought @ purchase price: $947.75 

3. Gross Monthly Income: $1,500 Gross Yearly Income: $18,000

4. Yearly Operating Expenses: $18,000 Net Yearly Income: $14,451

5. Monthly Cash Flow: $552.25  

So as you can see ladies and gentleman, these two properties are near polar opposites when it comes to monthly and yearly income. My wife and I will be managing the chosen property ourselves, we have a mortgage of $1,080 on our own primary residence. 

A part of me wants to go with Property B so that I can cover the whole or part of the mortgage if I am dealing with vacancies or turnovers. However, another part of me wants to go with Property A because of the all so sexy cash flow. 

So tell me, which would you guys go with? Oh and for my background, I am the sole breadwinner of a family of 4. 

Would really love you guys input. Thanks. 

I know places like New York City and other more liberal cities tend to be tenant friendly but would you veteran investors in the Allentown area consider A-town more tenant friendly when it comes evictions or landlord friendly? I would like to know the ease of evicting a tenant through the Allentown court system.

Thank you guys. I appreciate the words of confidence. I have always felt there was potential for growth investment wise in Allentown and seeing the revamped downtown Hamilton Blvd area makes me excited to start investing.

Thanks Brent. If I sound like I am being bull-headed, trust me I am not.  Like you said, I just feel it would be better to use the money that I would not be able to touch until I am 60 y/o work for me now, while I am still contributing to it.

Hi Karen, I see your point, but unfortunately my employer does NOT match my 401k and my pension is not matched either. Even when I take out the loan, I will continue to contribute money into both retirement vehicles.

Well Brent, its not as if I have absolutely zero capital to work with. By the time I approach a lender I should have some where in the ballpark of 5K in reserves. One lender I approached was willing to do 100K minimum purchase price with 10% down with no PMI. If I get a 3 unit property for that exact 100K figure, I should be cash flowing fairly well and have approximately 15K minimum from the pension loan still saved for CapEx or repairs.

Thanks for the feedback Jaclyn. On my 401K and pension website they provide a calculator to show how much I will be paying per paycheck which is reasonable fore me. You are right. I cannot borrow the max without being taxed so that is why I wanted to borrow from both entities to equal 30K.

Hi guys. I just want to know (especially from the seasoned vets in the Lehigh county area) how in demand are apartments in the Allentown, PA, especially center city area? I know it is considered a war zone but that does not mean people do not want to live there. So tell me, if one was to buy a 2 or 3 family house in the center city area, how soon do you think the person would be able to get tenants in?

Hello BP members. I would like you guy's opinion on this. I have been inspired to go in to rental properties. Unfortunately, I do not have the capital to invest. I am thinking of taking out a loan from my 401K and my pension to raise capital. My question is, do you think its wise to borrow money from my retirement in order to go into this investment venture?  The total amount borrowed will be a little over 30K and I will be obligated to pay it over the next 5 years. I am 30 y/o, so retirement is pretty far down from now and I work in healthcare where my job is unionized so I have job security there. What do you guys think?

Thank you so much guys.