All Forum Posts by: Ibn Abney

@Greg Rittenhouse

Is your plan to lend your capital? or are you looking to raise capital via crowd funding?

Not quite sure what you are looking for here. More details the better. What is your ideal investment, debt or real estate?

Hello @Tyler ,

(I am assuming you a buying a multi-family to live in one unit and rent the other(s).)

With $10K-$15K, that is more than enough for a $200K property with 3.5% down. In my opinion, I would avoid the FHA loan and get a traditional 30-yr fix loan at 5% down. A $250K property at 5% down is only $12,500K out of pocket. You have up to $300K in purchase power at $15K with 5%.

Few things:

1) how much do you want to spend monthly out of pocket? defining this criteria here will allow you to make confident, yet conservative decisions. Purchase price is only one factor. Also, with a mult-family most of the mortgage is paid by the other unit(s).

2) when calculating a house hack, a small negative cash flow isn't horrible. You have to pay to live anywhere so $100 /month is better than $1000/month in rent or mortgage for a sfh you live in. 

3)Where are you looking to buy?Dont base prices on MLS deals solely. Off markets transactions tend to be cheaper. Seeking an off market and/or a seller finance deal may be worth it here.

Just my thoughts. You have more than enough!! Good Luck

@Lumi Ispas Feel free to send any available 2-6 units my way as well. Actively looking for my next rental property. Able to close fast. Thanks,

@Otto F. Great Area. Definitely a long term play. 

 You stated some repairs are needed but did not mention the initial cash investment. Therefore, the cash on cash % is higher than actual and down payment $ numbers is too low as it doesn't account for repairs you will need to pay out of pocket.

Your negative ($1050)/month cash flow is just to cover the mortgage and taxes. Does take into account maintenance/potential vacancy/Unpaid rents, etc. Also, for that negative cash flow amount you could rent an apartment in the same area. My advice is to find a better deal or negotiate more with the seller. Just not enough cash flow here at the current rents IMO. Good Luck!

@Joe Tanner This is a good question and interested to hear from other investors!

I have analyzed a few "rural" markets (semi-rural with a very small downtown). Price points are great and on a city investor's budget, can purchase 1-3 properties more or 5 units more. Cash flow looks great. 

My biggest concern of course is vacancies and turnover. As a city investor, I have no idea how to attract tenants in these areas and not many companies specialize in rural tenant housing placement. You have an advantage if you live in a rural area and can network with prospective tenants.

Cost and repairs are the same pretty much everywhere, so having a solid tenant pool is key (of course). Also, contractors and skilled labor is harder to come by, so unless you have some handy man skills, forces you to look outside. All advantages if you live local! Good Luck!

@Patrick Whelan sounds like you are off to a good start. Education is key.

My only suggestion, is targeting property owners a bit more specifically (if not already). Property type/size, ARV, school district within the zip codes, distance from shopping center, etc. Have a defined criteria.

Driving for dollars I have found to be the best local tool to find potential leads, IMO.

I started my career in sales, so I have cold called many businesses/owners (B2B sales). Its tough and it sucks, but it WORKS!! Keep it up. You will land something at that pace. Good Luck

Hello,

Any Good GCs you can recommend in the Cincy Area?

Thanks

Hello,

Sounds like a you guys are doing it right and in a great position.

Why do you want a 50-100 unit? How many units do and your partner own, not property count? also how much equity? Sounds like a huge leap. Personally, I like that goal, just curious as to why that is your goal.

Without the "why", all I can say is start with a plan. What does purchasing 100 units achieve for you? Are you looking for a financial number? or a % return number? Can you hit either with a 30-40 unit? or mix-use building, or a portfolio of Quads. 

Sometimes saying I have "100 units" or "1000 units" sounds great, but can you achieve the same goal with less input? Rather than approach it with a "build from there" mindset, write out a 5yr-7yr plan and start working backwards.

Also, at those level you have to start thinking syndication and SEC regulations, if not already.

Good Luck!

Hello Cincy BPers,

Any new updates to this topic? Very interested in Cincy. Happy to hear what 2017 has done locally.

thanks,

Hello,

1) I would recommend getting to know the formulas behind the calculators. Key metrics for me is: Cash on cash return, Net operating Income, Return on Investment, # of Yrs to Break-even on my initial cash investment, and monthly fixed cost/debt obligation (not a ratio). all easy to google search.

a) You should know your market solid, #1. ARVs, average listing time, rents, cap rates, etc. I think this is number one. As the metrics above will vary depending on markets.

b) then once you know what zipcode(s) to target, the numbers and metrics mentioned above will help you determine what is or is not a good value.

2) I have been investing in direct mailings and driving for dollars. Calling sellers. Chicagoland is getting very tough to find deals. networking is best.

3)"Chicago Action Investors" is a good group. BP as well is a good spot!

Good Luck!