All Forum Posts by: David W.

@David Waddleton First of all kudos for going on out making it happen. I guess the question is how comfortable are you with the numbers. I would aim to for closer to 90K and look to charge $700/month per unit but that’s me.

I wouldn't do it, its tight and doesn't leave any room for miscellaneous, there are plenty of good deals out there and if you are a U.S. Citizen your financing should be better terms than 25% down. Keep looking. this isn't a home run type of deal in my opinion. Also, don't be in a hurry, there is great competition but make sure your numbers are working for you. Remember this is JUST Brick & Mortar, when I invest I don't put any emotions in it. If someone "beats" me on a deal its fine as long as I stay true to my formula :) best regards

As a contractor, I am very familiar with what maintenance costs. Unless this is a home in immaculate condition, there is going to be work to be done. Painting, roofing, siding, water heaters, plumbing, tenants trashing.... Maybe not this year or next, but when you have tight cashflow, and you have to spend $5k on something (which isn't a large amount), it can eat your profits for several years. 

@Marc Winter

I’m in Marc’s ‘corner’ on this one.

There seems to be lots of folks offering turn key rental property in the Midwest.

I am a novice investor and finding a few lucrative deals from distressed sellers. In Oregon this strategy is the only one that gets 15% - 44% returns on the deals and give the $100+/door we are looking for. If I buy from a wholesaler or listing Realtor, there isn’t enough ‘cream’ to protect me from the potential for surprise expenses, maybe even from mistakes I could make as a novice. 

Seems like it is really about finding that gem deal you can find that is deeply discounted - distress or rehab etc. Gotta just keep hunting! Yes the same with me I need that padding to protect me from surprises!

@David Waddleton Congrats for taking action and doing your homework. The only way to learn is to jump in. Unlike you when I bought my first property it was pure speculation and I was clueless. Happy Investing!!

@David W. congrats on putting in an offer and making moves. I've been a slave to analysis paralysis myself for far too long, and finally putting in offers that have been getting rejected, but I know I would be questioning myself the same way you are if one of my offers got accepted. I notice you have the same questions I have had regarding whats a good CoC ROI or cash/door. This is an answer I've had to come up with myself regarding what I feel is comfortable for me-one thing I will say is I've set a goal of at least 12-15% given that I could get 8% on average (and have been fortunate enough to have gotten more like 15% over the last few years) simply putting my money in the stock market and not having to worry about it. Now thats not to say that I wouldn't lower that standard to say 10-12% just go get in the game and gain experience, but I'd say so far I've let a lot of properties go by that were <10% since setting my goal above. I think thats been one of the most helpful things I've done since starting to analyze deals. Now, take this with a grain of salt as this is coming from somebody who is yet to close a property, but I hope this is helpful and encouraging for you nonetheless. Wishing you all the best!

@David W. I own 16 properties, mostly single family, that I was lucky enough to swoop up in 2008-2010 in foreclosure time. All at ridiculously low prices.  This site has helped me to realize the true costs and expenses because I didn't know crap.  I knew I bought the properties at the right price, and that is the name of the game.  The number's don't lie.  I have been trying to buy something for a while now but there is nothing out there worth it.  @Daniel Rivera is right. The stock market is zero work for a 7% average return.  I'm not in the stock market but that is where I am leaning.   I am also stuck on the numbers thing but lean toward what Daniel is saying.  This property is more time than you know.  Not saying it isn't worth it.  But I disagree with " Good job on your first deal".  I guess I can tell that to all the investors in 2006, as that is how I got all my deals.  Good example, just last week closed on a sale of a commercial building I was 15% partner in.  Bought it 20 years ago for 1 million, so 30k down.  I put in $64,000 over the years for repairs, vacancies, etc.  Sold for 1.4 million.  I received check for 74k.  Pretty good?  LOT of fees for realtors, title, survey, etc, etc. also. 

@David W. - I have the same question @William C. brings up around the bottom unit is being remodeled prior to closing.  I'm not following why the seller is doing this after you've agreed upon a price.

Also a quick Google search shows the city takes care of snow removal for the streets but you will need to pay your property manager or a third party to shovel the sidewalk.  Columbus doesn't issue an ordinance for this but as a landlord you can potentially put yourself in a messy situation if your tenant falls on the property due to your negligence of removal. 

The snow removal is a small item, but the fact that you blindly accepted what the PM said without doing a quick fact check concerns me that maybe you are blindly accepting some of the other items talked about on this thread (now getting $700/rent, utilities included, bottom floor being renovated).  Feel free to DM me if you want to discuss, I don't want to rain on your parade nor do I have all the info on this deal, but just trying to help avoid any pitfalls. 

@David W. All of the comments/advice that you have here is very good and worth considering. Hopefully you are still in the inspection or due diligence phase...

You are definitely on the road now. Getting this far with an investment is great. **If your first deal becomes an anchor and a stress, this can really be discouraging so do your very best to maximize all of your numbers. On the other hand, a great first deal/investment can be like rocket fuel! 

Overall, congrats on taking the initial steps!

@David Waddleton. Am I reading this post of yours correctly? I can’t see to quote from my phone but I pasted part of it below. The unit is being renovated prior to settlement? As in the current owner is going to invest into the property, after it’s under contract and before he transfers ownership? Sign me up! Another question I have after reading through this thread is, who is your boots on the ground? An agent? Sounded a few times like the property manager is selling you on higher rents and renting it out quickly. Wasn’t sure who’s all involved since your out of town. Have you seen the inside yet? Your OP and your location tell me you bought sight unseen. As others have said, bravo for jumping into the deep end, and coming here to get some helpful advice, it’s time to sink or swim. Best of luck either way!

 Hey @Tom Shallcross so I have confirmed that the top is renting for $700 and bottom unit is being remodeled prior to closing. I read the lease agreement for up top that signed a 1 year Dec 1, 2018 for $700/mth and.........