All Forum Posts by: James H.

Ryan,
The first deal is a single unit for sale within a multi-unit building. This is flat out a bad deal for an investor.

The second deal is very likely a duplex converted from an old house and then a second house on the same lot (as apparent from Google Earth). I’d be willing to bet the water and electric are not separately metered, lots of deferred maintenance and total rent would be around 900-1000 per month. I actually own a rental in this area. The price is too high. It would need to be closer to 50K to even consider, and even at that, I will not own properties that require me to pay utilities because they are not separately metered. You are also assuming these are each 3 BR units where I would bet you they are 1 BR units. Rentometer is a terrible indicator for that area because it is near a historic district…

The third is two separate units – not a 4 plex. This thing has been on the market forever and is certainly not worth 70K, probably not 50K. This has all the same issues as the above discussed property.

Notice that not one deal you have found on the MLS come even close to Brandon's example. At best, we are looking at a property that generates about a third of what Brandon is using for his example. If you want to look at multi-plexes in my area, this is the best internet source I have found: dfwincomeproperties.com. I don't know if that link will post, but you can google "dfw income properties" and there you will see the reality of multi-plex listings on the MLS. A decent 4-plex will run you about 200K in a sort of crappy part of town.

You need to do WAY more than briefly looking. Don't think you are going to do a quick realtor.com search to educate a local investor in his/her local.

You would have to work pretty hard or go really big to find buy and hold deals that cash flowed enough to be diluted amongst more than one investor...I would think.

This road map is a good plan, but what is the reality of finding a 4-plex with 2400/month in gross rents that is valued at 100K, let alone obtaining it for 80K. Not only that, but we are assuming the property is in good enough repair that it is eligible for conventional financing.

Is anyone in north Texas finding these types of properties? If so, I need to talk to you.

I would think that you don't want to put "at a discount" on your mailer.

Seth, does this work well for you? How many properties have you bought as a result of this kind of mailer with said wording?

I'd be hesitant to leverage if raising down payment money was nearly impossible. This statement basically says you don't live below your means. Before jumping into a huge decision like this, I would take pains to evaluate why exactly you are not able to save money right now and address that before moving forward.

I have priced shingles and metal and have not found them to be comparable in price - at least not for standing seam, which is what you want to use on a house. If you use regular corrugated sheets, the house will look like a big storage shed IMO.

That being said, I can't believe it would reduce the value of your home. That must be a regional thing. A metal roof is nearly coveted in Texas. I would probably use shingles, though, and consider doing metal if a hail storm took out the roof and there was some insurance money to subsidize the cost.

I would first look to improve my credit, even if I had to use some of that 8K to do it.

Good credit is an essential part of my strategy and probably most other's, too.

I don't have any experience in middle to higher rentals. Is there really much difference in tenant quality/make-up from 800 to 1500/month?

Cool. I like to use sweat equity, too. One thing I noticed that I would change is the window trim. The vertical pieces should extend all the way the bottom and the bottom piece sitting between the two vertical pieces. This allows an egress for the water to drain out of that could seep into the cornice work after the caulking starts to crack. to drain out (in theory).

I would leave it alone and consider it part of the cost of doing the deal.