All Forum Posts by: Cole Johnson

@Steph C. Thanks Steph im sure they will see my "cheapness" when Im the one collecting the rent checks fromm them!

@Alexa K. Thanks for response! If you do find yourself purchasing a 4-plex let me know if you have any questions. I've learned alot through BP, but like everyone says you learn so much more by doing it. Feel free to message me anytime in the future.

Hi BP,

Just wanted to start out on how thankful I am to this site and everyone on it. Last year at this time I would of never guessed that I would be a landlord right now. A little background how this is even possible form me, at this time last year I was working 30 hours a week making $12 an hour. I also had every side job i could possible find which made me close to $2000 a month. I was given a raise to $16 and 40 hours a week at my job and a month ago was raised to $18. I have been living a low key life, all of my friends call me cheap, but its me saving money for things like this.

Around 3 months ago I found bigger pockets, I have listened to around half the podcast and all of the buy and hold investor podcast. This is mostly at the Job where ive gotten raises :). The biggest thing is beleiving that you can do it. Everyone that I tell that I am buying a 4-plex dosent believe me or asks how much money my family is giving me. The answer to that is 0. Ive been fortunate to have had my dad pay for the first two years of school, I worked while in school and was able to pay the last two years with no loans, just grants I received from the government and academics.

So a little on my deal, I have been working with a realtor and looked through apartments from 4-plexes to 18 unit buildings. I have seen everyone on the market and walked through the good and ugly. Made three offers on different four plexes but was to low for owners to sell. One of the greatest things I learned from the podcasts is when you meet someone instead of saying hows it going and good, tell them what you want or doing. I think the entire town I live in knew I wanted to buy a four-plex. Finally that paid off, when a seller came straight to me and wanted to sell. He was a motivated seller that needed money for medical bills for his wife. I walked through with him asked him the price he wanted. His price was higher than all the other building for good reason this is by far the best kept up and nicest one Ive seen, also with the highest rents by $500.

I brought him in and made a low offer with all closing cost paid or up to 3% saving my money down and to my surprise he didnt blink and said yes. This made me nervous that I offered to high, but was confident at the same time. When I got the appraisal back It was confirmed, all of the comps he used Ive walked in. He praised the condition of mine and really had nothing bad to say. He appraised it over $10,000 high which I am ecstatic about. 

The loan I got with this property is a Freddie Annie first time home buyers conventional loan with 5% down and 3.875% fixed interest 30 year fixed. Was looking at FHA but I have high enough credit to use this one, and very happy I did so. Everything is set to close on Friday after a few hurdles slowed me down due to this being my first deal.

After using all of the cash flow calculators and other tools I  will be cash flow positive on three of the units. I will still be paying rent and finding someone to live with me as well, because Im trying to get to deal #2 in less than 6 months.

Wish me luck and thank you again! 

@Graham Nash Thank you so much for the tips and recommendations! I really appreciate everyone that takes the time. In regards to the offer. I have walked through multiple four plexes around my area. (everyone that's for sale). I have offered on two of them and know what the winning offer was. I also asked my realtor that was helping out with those showings to get me a list of all the past multi-families and what they sold for. When I walked through this one with the owner I asked him what he wanted. It was a reasonable number for what it was. I offered him about 25K under his price and he didnt blink and said yes. Which worried me a little, I have made my own purchase agreement which pretty much matches my last two from when I was working with an agent. I feel confident that my price is a good deal. I will get about 1.4% rent to purchase price. I have a loan that I only need to put 5% down and 3.875% interest. Signing the purchase agreement today! 

Thanks again,

Cole

@Christopher Phillips

This is a different seller of a different four plex that ins't even on the market. Also this seller works part time at the building I work at (Alerus Center) and we both somewhat knew eachother before he decided to sell. It kind of sounds like he needs the money for some family medical issues.

Cant Imagine why you would of wanted to leave the coldest city in America....

Hey Everyone,

I have been looking at 4 plexes to house hack in. I have looked at around ten and put offers in on two. The two I put offers in I went through a realtor. I had a seller directly contact me to sell me his 4 plex. This I know can benefit both of us. 

I am just in need of a purchase agreement so I can have something in writing. This will be my first rental property and dont want any surprises. 

Also if anyone has any experience buying directly from a seller, I would really appreciate all of your feedback!

Thanks!

Hey BP!

I am a newbie Investor looking to house hack. I have looked at pretty much every 4 plex/duplex in my market. I have a good understanding on all the comps for them in my market. I have also put offers on two of the four plexes and just got beat out.  For the past 3-4 months every one I have talked to I bring up im trying to buy a 4 plex. Well recently that payed off. I had someone call me and ask if I wanted to buy there 4 plex. Sounds Great! 

I have a few questions on how this will work though.

1. Will the seller have to pay any commission to a real estate agent if he sells to me without listing?

If he dosent can I offer less and explain this as a reason?

2. I have been working with an agent who has been really helpful in showing me properties/ put together offers, would it be rude to go around him?

3.  Will it still work the same for the bank im pre-approved for if I buy directly from seller?

If you have any other first time buying direct from seller tips, I would greatly appreciate them.

Thanks so much!

The three vacant units are the one beds, there is a very small different in price between the two beds and the one beds. 30-40 Dollars. There is also a 4 stall garage that is completely rented out I included that in the 1945 the building is currently getting a month.

@Mindy Jensen The only reason I was told they were selling it was because they are selling most of their portfolio. 

There are two apartment buildings, this is one of them in town. There is also a couple duplexes that are rented out.

There are 2 2bed  bath then 6 1 bed 1bath

The town I live in 40 miles away has positive population growth and businesses keep coming here.

The purchase price was just so low on this I thought I at least had to look into it.

@Zach Quick There is no poulation growth in sight, it actually went down 30 people last census. The only reason I thought I could even think about doing it is because I was raised there and no everyone in the surrounding towns. Making my self have an advantage over most out of town investors, which is who is selling it.