All Forum Posts by: Dustin Beam

Yea I don't like the calls either,but I just deal with it like I said to help get my next deal faster.

My goals are similar to yours just smaller. I'd like to get to 300 ish units. At that point I might just call it good enough. Who knows though. I figure at 125 per unit per month would give me enough money to love a great life. More than enough to live a great life and leave something for my loved ones.

My 5-10 year goal is to have somewhere around 50-70 units. Admittedly it will not be easy without selling some property along the way.

 Am I sure there are no properties near me that would be a good deal? Hell no haha, I just don't know where they are. :) I don't have great connections right now, so finding properties is basically on me and a challenge.

I can understand you needing to go out of state where you're at, but I should be able to find something local. Out of state is fine, but I won't lie,trusting people I meet a time or two to handle everything does give me a little heartburn lol. 

Unquestionably some day I want someone handling the day to day stuff, but for now I can handle twelve units and try to maximize my profits to buy more property.

 I won't pretend to be the authority on lending,but it's my understanding that once you're in a commercial lender's office, they can evaluate the value of the property however they want since they hold the loan and don't answer to anyone but themselves.

I'm not saying I'm definitely that I'm right in that, nor am I saying that typically it's as you say. I just know that my property was evaluated both ways, under a commercial loan, all together.

Not saying you, but I often see people here say 4 or less units has traditional financing and 5 or more is commercial lending, but that's not always the case.

I'm not sure I follow. Sure, I know that these properties could be purchased under single family loaning terms, but they can also be financed commercially. And their appraised value can be determined more than one way. In my case they were appraised using some mixture odd comps and income based. Your have to ask the appraiser how he did that.

The general buying public is apparently saying they are worth approximately 100x the monthly rent. I see that in my market regardless if it's a duplex or a 16 unit building (and higher).

But for whatever it's worth,my buildings are side by side and identical. The only thing that separates them from a true complex is property lines and a common parking lot.

All the same,I'm not arguing your point. Great things can happen with trading up, but until I come across a great deal, it's simply a bad move. If anyone in KC has a $1M property with rents being 1.5% of the purchase price and not a war zone, let me know haha :)

 They are already mulit-family. I bought three 4plexes that rented for $650 apiece. Came out to $43,750 per unit with was just a shade under 1.5% rent to purchase price.

Properties here generally list and apparently sell for around 100 times the monthly rent (or 1%). My current rents are right about $8k per month. I figure they could sell for $750k. All in all netting me approx. $300k after realtor fees and everything are accounted for. My bank does loans for 20% down, or 5x my down payment, as long as there are reserves in place and rents make sense.

Seems obvious to take 300k, hold back 50k for reserves and buy $1M dollar property right? Well yea, if I can get one at least in the 1.3% + range (but preferrably 1.5%) so that I'm still making money. And also not in a war zone. I'm certain those deals are around in my area, but none that I've found.

Bottom line, I can definitely get more units, but it might be at a minimal amount more in cash flow unless I find a good deal. The "good deal" part is the catch.

My problem is finding the next deal. I bought my units for a $525k. I believe I could sell them and get a price that would allow me to take appreciation, my first down payment, and gained equity to buy something in the ball park of $1M. 

Of course that sounds enticing but I the rent to purchase price when I bought was around 1.5%. I know they probably exist, but I don't come across deals much better than 1% in my area. If I could find a $1M property w/ similar profits per door, I would definitely thing very hard about a 1031 exchange.

"Efficient" can often be misleading to the general public. For instance, electric resistance heat is almost 100% efficient. But it is generally more expensive than gas simply because gas is cheaper even though it does have more losses. Check your local gas prices obviously. 

Heat pumps will generally put out MORE heat than it consumes, unlike electric resistance that puts out an equal amount to what it consumes (some fan losses, but mostly). How much it puts out depends on teh unit and what temperature it is outside. The answer isn't simple. In general, gas will be cheaper overall between the cost of the unit and cost to heat. But again, there are variables that you can't answer simply. 

 This is partially true. I'm a Mech Engineer (do HVAC/Plumbing design). There are some limitations to heat pumps, and the colder it gets, the less effective they become. They pull heat from the outside and put it in your house. When the AC is running in the summer, it pulls heat from your house and puts it outside (your AC also becomes less effective as it gets hotter). 

It can still pull heat from the outside below 40 dF, however you start to risk freezing on your outside unit, which would make it ineffective. There are solutions to that though, you can run the unit in "reverse" (normal coolign mode) and it will thaw the unit out. You can also put electric heat as backup in the furnace, so if the outside unit freezes, you used electric heat.

In any case, just speak to a local HVAC guy and ask them about the unit freezing and what kind of options they have. 

I don't whole sale, but I formed an LLC and have zero regrets although it's never been tested. In no way do I want to risk losing my home, vehicle, savings, retirement account, etc.

I know it varies by state, but my attorney said they are pretty much rock solid as long as you treat it correctly. The big one, according to him, is to keep your funds separate. IE - don't go buying groceries or whatever w/ your company money. 

Unless I'm mistaken, I don't think he can hide his name with an FHA loan.