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All Forum Posts by: Calvin Thomas
Calvin Thomas has started 37 posts and replied 777 times.
Post: Holding costs when paying all cash? Other concerns?
- Developer
- New York City, NY
- Posts 812
- Votes 711
Quote from @Joe Villeneuve:
Quote from @Calvin Thomas:
Quote from @Joe Villeneuve:
Quote from @Calvin Thomas:
Quote from @Joe Villeneuve:
Quote from @Calvin Thomas:
Quote from @Joe Villeneuve:
Quote from @Stetson Oates:
Quote from @Joe Villeneuve:
Quote from @Stetson Oates:
Quote from @Joe Villeneuve:
Quote from @JM Edward:
@Joe Villeneuve that's a different way to look at it! I thought I was on the right track when @Chris Seveney validated my point, but everything can be seen multiple ways which is what makes these things so tricky. I feel all-cash is less risk because unless the market goes way down I can still likely get most if not all my principal back, even in a half done rehab(?).
As you see it, the lender is taking some of your risk away, but how does that work if there is a loss on the project? The lender takes the title and you lose your down payment and rehab costs? And you end up with a credit record that prevents you from taking out (decent) loans for the next many years? That sounds like more of a nightmare scenario than losing some principal, but I don't think I'm as educated on what this would look like and why you think it would be a better scenario. Can you say more?
Risk is based on 3 parts:
1 - What is at risk. This is ALWAYS the cash that was put into the deal.
2 - Who is at risk. See above. This is the person that put in the cash. When you buy all cash, you are taking on 100% of the risk. When you put 20% down, you are only taking 20% of the risk, and the lender is taking 80%.
3 - Who is the risk. this is the person/entity that is responsible for keeping the investment a good investment. This is the REI. This means the person who is AT risk the most, is the person that put the most cash into the deal, and they are relying on the person who is THE risk to keep their cash safe. So, the person who puts the least amount of risk (cash) into the deal, is the person sho has the least amount of risk.
On the other hand, the greatest risk will always be what you have to risk...which is your cash in any deal. You are either risking the small DP, or all cash. This also impacts legal action. A property with 100% equity is a target, one with 20% isn't,...or is at least a very small target.
On top of that, the cash you put into a positive cash flow property is what the REI pays for that property. When you put up 20%, that's what you are paying for it. When you pay 100% cash, then you are paying full price.
Plus, 20% down means you are buying 5 times as much value compared to paying full price in cash. So, a 5% appreciation generates 5 times the equity increase as well,...and that's exponentially gained on future appreciations.
Using debt responsibly is a good strategy and necessary in most cases if you want to scale. However, debt can be the silver bullet to an investor if not done responsibly. When I was an underwriter and lender, a foreclosure killed the deal. Those are very hard to overcome and would require you going off market for financing for at least 5-10 years before any financial institution would look at you again. Of course, debt allows an investor to scale quicker and take advantage of appreciation on a larger scale but running a risk analysis on who's making loan payments when the SHTF is a useful exercise.
While your assessment of debt vs no debt risk holds water when it comes to litigation, an LLC with an insurance policy and an umbrella sets up a good defense. As well as being in a state with charging order protection.
As I stated above. Foreclosures delay traditional financing, until the REI can show a positive track record after the foreclosure. There are many more ways to finance properties, not involving traditional financing, where a foreclosure shouldn't impact it negatively. These other ways will show positive results to a lender, and help to stop the foreclosure from stopping traditional financing.
So you only recommend holding a mort. for liability concern? What sense does that make? You would rather pay 6%+ than have a paid off property? You do realize, unless the LLC is owned by two members or more, it's not very hard to pierce the LLC veil and go after the owners.
In my humble opinion, this makes little sense. Get a good insurance policy and an umbrella, and most should be fine.
You know, just because a lien isn't filed with the county, doesn't mean there isn't a lien on a property. I do not see the sense in paying 6%+ to a bank on the off chance I get sued. The logic doesn't compute for me; but maybe I am old and senile.
Fair enough and I understand. At least for me, I've been working deleveraging our assets. I place the HELOCs on the properties in case I want to make a cash offer on another investment and build up cash reserves.
At one point, I had over 24 million in loans outstanding. I'm at the point of deleveraging and less risk. I still believe that good insurance and a large umbrella is the best protection. But there really isn't any wrong or right way here. It's personal preference.
A lot of properties. It's down to a couple of million now. I have two other apartment buildings mature in 2030. 10 year balloon at 3.5%. Cash in reserves to pay it off; unless something else come by to acquire. Real life Monopoly can be fun; but stressful at times.
Post: Holding costs when paying all cash? Other concerns?
- Developer
- New York City, NY
- Posts 812
- Votes 711
Quote from @Joe Villeneuve:
Quote from @Calvin Thomas:
Quote from @Joe Villeneuve:
Quote from @Calvin Thomas:
Quote from @Joe Villeneuve:
Quote from @Stetson Oates:
Quote from @Joe Villeneuve:
Quote from @Stetson Oates:
Quote from @Joe Villeneuve:
Quote from @JM Edward:
@Joe Villeneuve that's a different way to look at it! I thought I was on the right track when @Chris Seveney validated my point, but everything can be seen multiple ways which is what makes these things so tricky. I feel all-cash is less risk because unless the market goes way down I can still likely get most if not all my principal back, even in a half done rehab(?).
As you see it, the lender is taking some of your risk away, but how does that work if there is a loss on the project? The lender takes the title and you lose your down payment and rehab costs? And you end up with a credit record that prevents you from taking out (decent) loans for the next many years? That sounds like more of a nightmare scenario than losing some principal, but I don't think I'm as educated on what this would look like and why you think it would be a better scenario. Can you say more?
Risk is based on 3 parts:
1 - What is at risk. This is ALWAYS the cash that was put into the deal.
2 - Who is at risk. See above. This is the person that put in the cash. When you buy all cash, you are taking on 100% of the risk. When you put 20% down, you are only taking 20% of the risk, and the lender is taking 80%.
3 - Who is the risk. this is the person/entity that is responsible for keeping the investment a good investment. This is the REI. This means the person who is AT risk the most, is the person that put the most cash into the deal, and they are relying on the person who is THE risk to keep their cash safe. So, the person who puts the least amount of risk (cash) into the deal, is the person sho has the least amount of risk.
On the other hand, the greatest risk will always be what you have to risk...which is your cash in any deal. You are either risking the small DP, or all cash. This also impacts legal action. A property with 100% equity is a target, one with 20% isn't,...or is at least a very small target.
On top of that, the cash you put into a positive cash flow property is what the REI pays for that property. When you put up 20%, that's what you are paying for it. When you pay 100% cash, then you are paying full price.
Plus, 20% down means you are buying 5 times as much value compared to paying full price in cash. So, a 5% appreciation generates 5 times the equity increase as well,...and that's exponentially gained on future appreciations.
Using debt responsibly is a good strategy and necessary in most cases if you want to scale. However, debt can be the silver bullet to an investor if not done responsibly. When I was an underwriter and lender, a foreclosure killed the deal. Those are very hard to overcome and would require you going off market for financing for at least 5-10 years before any financial institution would look at you again. Of course, debt allows an investor to scale quicker and take advantage of appreciation on a larger scale but running a risk analysis on who's making loan payments when the SHTF is a useful exercise.
While your assessment of debt vs no debt risk holds water when it comes to litigation, an LLC with an insurance policy and an umbrella sets up a good defense. As well as being in a state with charging order protection.
As I stated above. Foreclosures delay traditional financing, until the REI can show a positive track record after the foreclosure. There are many more ways to finance properties, not involving traditional financing, where a foreclosure shouldn't impact it negatively. These other ways will show positive results to a lender, and help to stop the foreclosure from stopping traditional financing.
So you only recommend holding a mort. for liability concern? What sense does that make? You would rather pay 6%+ than have a paid off property? You do realize, unless the LLC is owned by two members or more, it's not very hard to pierce the LLC veil and go after the owners.
In my humble opinion, this makes little sense. Get a good insurance policy and an umbrella, and most should be fine.
You know, just because a lien isn't filed with the county, doesn't mean there isn't a lien on a property. I do not see the sense in paying 6%+ to a bank on the off chance I get sued. The logic doesn't compute for me; but maybe I am old and senile.
Fair enough and I understand. At least for me, I've been working deleveraging our assets. I place the HELOCs on the properties in case I want to make a cash offer on another investment and build up cash reserves.
At one point, I had over 24 million in loans outstanding. I'm at the point of deleveraging and less risk. I still believe that good insurance and a large umbrella is the best protection. But there really isn't any wrong or right way here. It's personal preference.
Post: Holding costs when paying all cash? Other concerns?
- Developer
- New York City, NY
- Posts 812
- Votes 711
Quote from @Joe Villeneuve:
Quote from @Calvin Thomas:
Quote from @Joe Villeneuve:
Quote from @Stetson Oates:
Quote from @Joe Villeneuve:
Quote from @Stetson Oates:
Quote from @Joe Villeneuve:
Quote from @JM Edward:
@Joe Villeneuve that's a different way to look at it! I thought I was on the right track when @Chris Seveney validated my point, but everything can be seen multiple ways which is what makes these things so tricky. I feel all-cash is less risk because unless the market goes way down I can still likely get most if not all my principal back, even in a half done rehab(?).
As you see it, the lender is taking some of your risk away, but how does that work if there is a loss on the project? The lender takes the title and you lose your down payment and rehab costs? And you end up with a credit record that prevents you from taking out (decent) loans for the next many years? That sounds like more of a nightmare scenario than losing some principal, but I don't think I'm as educated on what this would look like and why you think it would be a better scenario. Can you say more?
Risk is based on 3 parts:
1 - What is at risk. This is ALWAYS the cash that was put into the deal.
2 - Who is at risk. See above. This is the person that put in the cash. When you buy all cash, you are taking on 100% of the risk. When you put 20% down, you are only taking 20% of the risk, and the lender is taking 80%.
3 - Who is the risk. this is the person/entity that is responsible for keeping the investment a good investment. This is the REI. This means the person who is AT risk the most, is the person that put the most cash into the deal, and they are relying on the person who is THE risk to keep their cash safe. So, the person who puts the least amount of risk (cash) into the deal, is the person sho has the least amount of risk.
On the other hand, the greatest risk will always be what you have to risk...which is your cash in any deal. You are either risking the small DP, or all cash. This also impacts legal action. A property with 100% equity is a target, one with 20% isn't,...or is at least a very small target.
On top of that, the cash you put into a positive cash flow property is what the REI pays for that property. When you put up 20%, that's what you are paying for it. When you pay 100% cash, then you are paying full price.
Plus, 20% down means you are buying 5 times as much value compared to paying full price in cash. So, a 5% appreciation generates 5 times the equity increase as well,...and that's exponentially gained on future appreciations.
Using debt responsibly is a good strategy and necessary in most cases if you want to scale. However, debt can be the silver bullet to an investor if not done responsibly. When I was an underwriter and lender, a foreclosure killed the deal. Those are very hard to overcome and would require you going off market for financing for at least 5-10 years before any financial institution would look at you again. Of course, debt allows an investor to scale quicker and take advantage of appreciation on a larger scale but running a risk analysis on who's making loan payments when the SHTF is a useful exercise.
While your assessment of debt vs no debt risk holds water when it comes to litigation, an LLC with an insurance policy and an umbrella sets up a good defense. As well as being in a state with charging order protection.
As I stated above. Foreclosures delay traditional financing, until the REI can show a positive track record after the foreclosure. There are many more ways to finance properties, not involving traditional financing, where a foreclosure shouldn't impact it negatively. These other ways will show positive results to a lender, and help to stop the foreclosure from stopping traditional financing.
So you only recommend holding a mort. for liability concern? What sense does that make? You would rather pay 6%+ than have a paid off property? You do realize, unless the LLC is owned by two members or more, it's not very hard to pierce the LLC veil and go after the owners.
In my humble opinion, this makes little sense. Get a good insurance policy and an umbrella, and most should be fine.
You know, just because a lien isn't filed with the county, doesn't mean there isn't a lien on a property. I do not see the sense in paying 6%+ to a bank on the off chance I get sued. The logic doesn't compute for me; but maybe I am old and senile.
Post: Holding costs when paying all cash? Other concerns?
- Developer
- New York City, NY
- Posts 812
- Votes 711
Quote from @Joe Villeneuve:
Quote from @Stetson Oates:
Quote from @Joe Villeneuve:
Quote from @Stetson Oates:
Quote from @Joe Villeneuve:
Quote from @JM Edward:
@Joe Villeneuve that's a different way to look at it! I thought I was on the right track when @Chris Seveney validated my point, but everything can be seen multiple ways which is what makes these things so tricky. I feel all-cash is less risk because unless the market goes way down I can still likely get most if not all my principal back, even in a half done rehab(?).
As you see it, the lender is taking some of your risk away, but how does that work if there is a loss on the project? The lender takes the title and you lose your down payment and rehab costs? And you end up with a credit record that prevents you from taking out (decent) loans for the next many years? That sounds like more of a nightmare scenario than losing some principal, but I don't think I'm as educated on what this would look like and why you think it would be a better scenario. Can you say more?
Risk is based on 3 parts:
1 - What is at risk. This is ALWAYS the cash that was put into the deal.
2 - Who is at risk. See above. This is the person that put in the cash. When you buy all cash, you are taking on 100% of the risk. When you put 20% down, you are only taking 20% of the risk, and the lender is taking 80%.
3 - Who is the risk. this is the person/entity that is responsible for keeping the investment a good investment. This is the REI. This means the person who is AT risk the most, is the person that put the most cash into the deal, and they are relying on the person who is THE risk to keep their cash safe. So, the person who puts the least amount of risk (cash) into the deal, is the person sho has the least amount of risk.
On the other hand, the greatest risk will always be what you have to risk...which is your cash in any deal. You are either risking the small DP, or all cash. This also impacts legal action. A property with 100% equity is a target, one with 20% isn't,...or is at least a very small target.
On top of that, the cash you put into a positive cash flow property is what the REI pays for that property. When you put up 20%, that's what you are paying for it. When you pay 100% cash, then you are paying full price.
Plus, 20% down means you are buying 5 times as much value compared to paying full price in cash. So, a 5% appreciation generates 5 times the equity increase as well,...and that's exponentially gained on future appreciations.
Using debt responsibly is a good strategy and necessary in most cases if you want to scale. However, debt can be the silver bullet to an investor if not done responsibly. When I was an underwriter and lender, a foreclosure killed the deal. Those are very hard to overcome and would require you going off market for financing for at least 5-10 years before any financial institution would look at you again. Of course, debt allows an investor to scale quicker and take advantage of appreciation on a larger scale but running a risk analysis on who's making loan payments when the SHTF is a useful exercise.
While your assessment of debt vs no debt risk holds water when it comes to litigation, an LLC with an insurance policy and an umbrella sets up a good defense. As well as being in a state with charging order protection.
As I stated above. Foreclosures delay traditional financing, until the REI can show a positive track record after the foreclosure. There are many more ways to finance properties, not involving traditional financing, where a foreclosure shouldn't impact it negatively. These other ways will show positive results to a lender, and help to stop the foreclosure from stopping traditional financing.
So you only recommend holding a mort. for liability concern? What sense does that make? You would rather pay 6%+ than have a paid off property? You do realize, unless the LLC is owned by two members or more, it's not very hard to pierce the LLC veil and go after the owners.
In my humble opinion, this makes little sense. Get a good insurance policy and an umbrella, and most should be fine.
Post: Holding costs when paying all cash? Other concerns?
- Developer
- New York City, NY
- Posts 812
- Votes 711
Quote from @JM Edward:
For experienced investors, using leverage -- borrowing at a lower rate than what you are earning on that money through your real estate flips and BRRRRs seems like a good way to magnify your returns.
For someone new to the game, does it make sense to execute one's first project all-cash? The idea is that you give yourself more time to learn the process, make mistakes and avoid stress. You still have holding costs such as property taxes, insurance and utility bills (what else?), but I'm not thinking greedy on my first project. It could take a whole year and as long as it can return better than 10% that would be a winner to me (ignores the value of my time and stress).
Market swings are a concern for longer holds too. What other factors are there in this regard? Is it sensible or is there a big gotcha I'm missing?
Thank you!
More than half of our holdings are in cash. The others have sub-4% rates which expire within the next five years (balloon w/ 25 year am). I will most likely pay them off and add a HELOC in case I need to tap the funds. I also cover the properties with an additional 4 million umbrella.
At 6%-7%, I'm not big on borrowing. I like the peace of mind that I do not have to cough up funds to a financial master, the bank. There's nothing wrong with it. Grant Cardone lives off credit and other things to flex his big life style. I'm a simple old man. I am happy with just paying the taxes, utilities and insurance. Plus, more money coming in each month to pad reserves and purchase distressed properties.
Cash is and always will be king.
Post: Does Bigger Pockets facilitate a Culture of Trash Individuals???
- Developer
- New York City, NY
- Posts 812
- Votes 711
Quote from @James Wise:
I've been on these Forums for well over a decade and I've got to tell ya'll that there is a serious culture problem among "investors" around here. This morning I read a reply from a new investor in another thread called FlipSystem by Antoine Martel that is the zeitgeist of this cultural problem among investors around here.
Irrelevant to the topic of that thread being about FlipSystem and Antoine Martel, I want to focus on the set of balls and lack of shame on the poster for the way he treated the Real Estate Agent that he hired. Perfect example of entitlement, lack of accountability for his own actions, and the shameless way he had no problem hiring someone to do a job and then not paying them for said job. This kind of behavior is a problem and seems all too common among investors around here.
For some reason new investors think they can come on here and trash every Agent, Property Manager, Contractor, Lender, Title Company etc.... and then they can operate with impunity while stealing time and money from them. The lack of respect for people "working" as service providers in the real estate industry is nuts.
Below is his post in full and my original response to it............
Thoughts??????
________
- Investor
- Cincinnati, OH
@Jay Hinrichs. And all. Just wanted to finally write the post I said I would after I completed my one and only retail flip through flipsystem.
Unfortunately for me, Jay, you were right. Retail flipping homes is high risk.
Recap - I joined FS in 2023 with intent to flip many and generate more $ to invest with. started in cleveland market with no luck and switched to cincinnati market (where I live).
Bought off market 3/2 cape cod for $102k in cash 10/2023. Seller wouldnt turn on Utilities so couldnt check major items. Rehab estimated at $63K. ARV of $210-$215k. So it appeared to be a solid deal.
Well, there were many costs that just piled up over the rehab timing. like, drain lines that needed clearing, a water leak, having to switch to a 3/1.5 due to the odd layout. replacing AC unit (not factored into above rehab number), replacing Furnace (not factored), replacing roof) not factored, demoing and painting basement (not factored).
Time also played a factor as the contractor was not good. Lucky though for me I am local and could go over and check all items after complete. I had to tell him many times to fix items.
Rehab started OCT but didn't finish until JUNE 8 mo later! GC said 4 months initially.
By June i'm at $183k spent. I used HELOC so interest only payments continue.
Staged and listed and got a Ton of attention. Excitement was high. Accepted offer for asking $210K. Inspection back with whole slew of items. Buyer wanted $15k in items/credits, I denied as there was so much attention I thought for sure I could find a better offer. Back on market and lots of showings but no offers until mid July (cash institutional buyer) Offer of $204K but they wanted $20K in reduction after inspection.
Meanwhile I replaced roof (many buyers kept mentioning it so vs doing credit for same amount I just replaced) so total spend up to $188k with HELOC juice and half year tax payment.
More showings, dropped list price to $204K , no offers until 10/2024, $204K but again wanted many repairs and the aluminum branch wiring was the exit reason due to "insurance".
At this point I am not happy with agent (Do not recommend Howard Hannah) and I ask to release contract as I need to drop price and their commission is keeping me from profit. Well, they said sorry bud you signed a 12MO contract (lesson again learned to not ever signed an agent contract for 12mo) and they wouldnt release me so I just rode it out until contract was over.
I list FSBO in JAN 2025 through Homecoin(great site) $179500 offer came in a few days after list for list. Inspection requests were minimal but they wanted closing costs paid so it went through and sold in FEB.
All in $190K and came home with $165K. So $25K lesson learned. (I did not want to BRRRR or sell turnkey I just wanted out as I was afraid the bad rehab was going to cost me long run)
After all this, If I could have advised my self before getting into flipsystem, I would have said, Do not do this. I would have said, go to your local Real estate chapter and ask the leaders who in the group is the best at what you are trying to do in your area. Connect with that person or persons and offer to pay them to learn it all or try your best to learn from the RE meetings. They might offer up the knowledge for less than you'd think. I do get it thought that the point of FS is to not have to do any of that (education, finding people, finding teams, vetting teams, etc) and just have it done for you asap.
What do I think of Flipsystem? The education and calls were good, the team they told me to "trust" in my market was bad. Maybe it's just me and my experience in Cincinnati though as I cant say anything about the teams in other markets. I do see though, if the teams were better in my market FS would be a good program.
Did I take on too big a project for my first retail flip? I think so, but the FS team led me to believe I could make it happen.
Did I learn valuable lessons, absolutely. Should I have listened to @Jay Hinrichs absolutely LOL.
________
#4 All Forums Contributor
- Real Estate Broker
- Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH
Replied 16 minutes ago
Opinions on the Flip System program aside, it's pretty wild to me that you have no shame in working that Howard Hannah Agent as hard as you did without paying them a penny even though they got you a ton of interest and multiple offers. Seems like the only reason the deal didn't close is because you were too cheap to do a proper rehab. Then you have the balls to trash them and try to weasel out of your contract with them. This type of bush league behavior needs to be called out for the trash that it is.
People are different today. There's not much honor and loyalty with many in the younger crowd. Plus, you have these fly by night schemes by Rick Martel, and the zillons of other Tiktok / Youtube "superstars" with get rich quick scams left and right.
Bigger Pockets doesn't help by promoting some of these know-it-alls. Hint, they don't know much as they've never been through a real downturn. It's a recipe for disaster.
Post: Hard Money Loan to close in 5 day
- Developer
- New York City, NY
- Posts 812
- Votes 711
Quote from @Noyessie Hubert:
Hi,
Can a private lender / hard money lender help me close a deal by Friday ( 5 days from now ) in East Orange, NJ?
It is a redemption house with an assignment contract for 190k.
- The Rehab estimate is around 50- 60k.
- 3bd, 1.5 bath
- plan to fix and hold
- delivered vacant
- The current estimate, according to Zillow, is 327,300
- My rehab includes a 4th bedroom, which will increase the value by at least 30k.
- 2bd are currently getting sold there at 300k.
Exit strategy: Rehab, Refinance, and Hold for rental or personal use.
Caveat: It is a redemption and needs to be closed by Friday this week. The lender I have can not do that.
I'm still deep in the process of analyzing the deal and can share my calculation details with potential lenders. But knowing how much the loan will cost me is crucial to making a final decision.
East Orange can be seedy. It's really a block-by-block type of boro. I'd tread very carefully here. Plus, you need permits for this. Buildings and Codes aren't the fastest for permits and inspections.
Post: Wholesaling Is Not An Easy Business
- Developer
- New York City, NY
- Posts 812
- Votes 711
Quote from @Eyad Ahmed:
if you think wholesaling is an easy business and that it'll make you thousand's and thousand's every month your mistaken my word to every brave entrepreneur get ready because it's not gonna be an easy game at all don't let these wholesaling guru's
make you think other than that before learning anything about wholesaling real estate learn how to find those really distressed homeowner's because that's what you need to think about if i was you i'd go straight to the source COUNTY RECORD'S and good luck to any brave entrepreneur out there
reach out if you need any help when is come's to lead generation and wholesaling!
Obviously. Here's another truism. The sky is blue.
Post: Property manager recs for OOS investor
- Developer
- New York City, NY
- Posts 812
- Votes 711
Quote from @Remington Lyman:
Quote from @Calvin Thomas:
Quote from @Nishil Kothary:
Anyone worker with any good property managers in Columbus Ohio? I'm an oos investor looking to build my team. Would love to connect with any recs!
https://www.biggerpockets.com/users/jameswise
I do not believe James Wise manages in Columbus, Ohio
You may be right. I think he only does investment services in Columbus. My bad.
Post: Looking for 4-Plexes Under $200K That Cash Flow – How to Finance With DSCR?
- Developer
- New York City, NY
- Posts 812
- Votes 711
Quote from @Eduardo Cambil:
Hey BP community 👋
I’m actively looking to invest in affordable multifamily properties (4 units or less) anywhere in the U.S. My ideal scenario is:
-
4 units under $200,000 total purchase price
-
Each unit rented at $800–$1,000/month
-
Monthly gross income: $3,200–$4,000
-
Goal: Net $2,000/month in cash flow from a single deal
I’m exploring using a DSCR loan (Debt-Service Coverage Ratio loan) for financing, since I'm not a U.S. citizen (I'm based in Spain), and I'm partnering with someone who lives in Texas. We're aiming to buy through an LLC.
💸 Example of What I Want:
If I found a 4-plex at $180,000, and it rents for $1,000/unit, here’s what I imagine:
-
Total income: $4,000/month
-
DSCR loan at 75% LTV: $135,000
-
Interest rate: ~8.5% (fixed), 30-year term
-
P&I payment: ~$1,037/month
-
Taxes + Insurance: ~$300/month
-
Other reserves (mgmt/repairs): $500/month
Net cash flow: Around $2,100/month
❓My Questions:
-
Where can I find deals like this? Any markets you recommend where 4-plexes are still below $200K?
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Are there lenders doing DSCR loans for 4-units in this price range?
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Any red flags to watch out for when evaluating cheap 4-unit properties in smaller towns?
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Are there platforms or wholesalers you recommend to find these types of multifamily deals?
Any insight would be super appreciated 🙏 I’m trying to structure my first big cash-flowing deal using Other People’s Money and want to learn from those already doing it.
Thanks in advance!
Have you checked Pluto?