All Forum Posts by: Dan Mann

I am looking at a rental in my area for $125,000. It has four units currently being rented out and a 5th unit that is storefront and vacant. It has a current annual rental income of $33,000 and $2,750 per month. The numbers work out really well. The question I have is if there is any red flags with having a commercial storefront being the 5th unit of this property. Will this make my taxes more? Will this lead to more issues down the road that I do not know. Thank you!

@Danielle Wolter

Thanks for the quick response! Is it bad practice to continue with any other questions on this thread? Or is it better to start a whole new one? Thanks :)

Do I need to let them know it's an investment property when I am looking for a HELOC? I seem to remember the bank I am working with now asking me if it is my primary residence when I took this first one.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $40,000
Cash invested: $40,000
Sale price: $45,000

First rental property ever. two long term tenants who want to stay. I want them to stay.

What made you interested in investing in this type of deal?

This was a good first property to get my wife on board with as it was inexpensive considering. It is only 5 min from where I work so I can swing by easy before or after work. After working up the numbers it just seemed to make the most sense.

How did you find this deal and how did you negotiate it?

I found this deal on Zillow listed at $45,000. I was able to get to know the realtor decently well and checked out the property with him. He is also the owner of this property. There was some things he wanted to get done which will cost close to nothing, but time. He doesn't have time so I said I will take it for $40,000 and do the work instead.

How did you finance this deal?

I took out a HELOC on my primary residence.

How did you add value to the deal?

By taking on the minor tasks myself I saved myself $5,000. By taking out a HELOC instead of traditional financing I saved about $6,000 of closing costs.

@Jonathan Bombaci

Thank you for the refinance idea. I am reading through Brandon turners book right now and excited to read on that. I will check with that option! Will post how things go :)

My name is Dan and I am closing on my first unit at the end of this month. It is a two unit with two long term tenants for $40,000 (I think this will appraise for $55,000-$60,000).

I am excited to get this rolling into another property and take a HELOC out on it as I paid cash for it.

Is it a good idea to take $35-$40k HELOC our against this property and use it as 20% down on another property if the cash on cash % makes sense? Or should I sit and hold a little while longer.

Thanks!