All Forum Posts by: Bryan M.

Thanks, @Brandon Roof. The plan was exactly what you mentioned. Use the LOC to obtain the property then go out and get a mortgage on the property. I guess I'm just finding it hard to create any cashflow when evaluating properties. I will adjust my vacancy/maint and cap ex from here on out. Thanks for your advice!

Thanks, @Tim Herman. I figured with the long term tenants already in place and requiring a 12 month lease the vacancy rate would be alright. I self manage at the moment so no fee there. I do not have 20% cash to put down. Using the 50% rule or the 2% rule, one would need to rent out a $150,000 property at around $3,000 a month for these to work at 2% vacancy, 5% maintenance, 5% Cap Ex. With your percentages you would have to rent that property out for well above $3K to make those rules work. Should I not use these rules to evaluate properties? Maybe just determine if I'm comfortable with the cashflow at the end of the month and make the decision? What am I missing here? Thanks for the help.

Little background. The way I purchase properties is a little different from what I've seen from other members. I basically have assets that the bank allows me to borrow against. Kind of like a home equity line but the assets are not real estate. I do not owe specific monthly payments. If I want to pay the interest, interest + principle or nothing at all I can. Anyway, the interest rate is variable and is currently at 6.22%. I was a flipper which made all this easy because I would just hold the property for a short time and then pay the line of credit off at the end. I recently started purchasing rentals. The plan was to purchase properties with the LOC (no cash needed) and pay the LOC down just as if I had a mortgage until I refinanced the property and paid the LOC off completely and was left with a mortgage. Rinse, repeat.

So, I came across this triplex in a B area. It currently has 2 units rented and the basement 1 bedroom unit is vacant. No repairs are needed until the current tenants move out. Even then there are no major issues. Currently has a new roof and new HVAC. When all units are rented it should rent for a total $1,850. Being new to the rental side of this business I'm finding it hard to meet the rules for rental investing. Cheap properties are in bad areas which have low rents. Higher rent areas have more expensive properties. From what I've found in the area, to get $1,850 in rent you have to spend more than $150K. Even if you were to by a distressed property in a decent area, those are expensive at this time too plus you have the reno costs.

Anyway, I'm looking for more cashflow at the moment rather than equity. Anyone have any input on my current situation?

Thanks!

View report

*This link comes directly from our calculators, based on information input by the member who posted.

All this information is extremely helpful. Wish I would have known about the estoppel letter. I'll make sure to use that next time. 

I'm sure I'll hit some bumps in the road but I'm glad to have all your experience and insight to get me through. Thanks guys.

Hi All - 

I've been an investor for a few years with 6 flips under my belt but I'm moving to a buy and hold strategy due to flips becoming less profitable in my area. I'm closing on my first duplex in a few weeks and was hoping I could get some tips that may help me avoid any mistakes regarding tenants. One unit is occupied and the other is vacant.

 - What records should I be requesting from the current management company?

- The current tenant is on a month to month at well below market rate. They're at $550/month when they should be at $650 at least. They're good long term tenants. Should I increase them gradually or just go straight for the $650?

- Other than a new lease, what else do you provide the existing tenant? I was thinking of sending them a welcome packet to start off on the right foot.

- Got any other tips??

I've posted a couple times recently and really appreciate the advice the forums have offered, so thank you for your time and insight!

Thank you!

I've flipped about six houses in my career as an investor but have been recently decided to change my strategy to rentals. I am closing on a duplex later this month and have been going back and forth on whether to renovate the kitchen with simple stock cabinets, laminate countertops and new appliances or leave it alone. I figure I could get this done for $5,000. Rents in the area for a 2/1 typically go for $650 but I want to try and push closer to $700. Also, I'm using a line of credit for the purchase so it will be leveraged and I'm planning on refinancing later on. Should I leave the kitchen as is or renovate it while it's vacant (the other side is currently occupied paying $550/month)?

Thanks for the advice!

Hypothetical situation - If a seller signs an original offer (no counters) and the next day, before the buyer has delivered their deposit, they found another property and said they didn't want to proceed, can they just walk away and the seller has no reasonable recourse? 

Thank you both for your insights.

Interesting. Thanks for your thoughts. So, my agent should have crossed out my counter offer price and written the original price again, then had them initial it? Then the contract would be valid? Him using the original contract is the reason it's not valid? 

The inspection contingency, according to my agent, can only be used to exit the contract if there's a material defect that I am not willing to fix up to $1,500. I'm from FL and I know the contracts down there basically give the buyer the ability to exit for any reason. I'm told it's different in VA.

What's the point of a contract if the buyer can change their mind at any time before closing (rhetorical)...ugh 

Hello. Anyone know of an experienced Real Estate Attorney in Roanoke? I've been searching through Google and it seems the attorneys I'm finding practice every type of law. I was hoping to find one that specializes in Real Estate. 

Thanks!