All Forum Posts by: Jacob V.

Investment Info:

Other commercial investment investment.

Purchase price: $620,000
Cash invested: $100,000
Sale price: $1,100,000

Bought a storage facility in West Texas, expanded the marketing, leased the office and apartment on site, and increased occupancy of storage units. Increased revenue by 3x and sold it for nearly double the purchase price 10 months later.

Please note: I sold this in 2022, represented myself in both the acquisition and sale.

Keep in mind that origination points help make up for some of this.

If you're working with a flipper that's going to use you for multiple deals/yr and charge 2 points and 10% interest (which is comparable to what I'm getting now) your return will be closer to 10%, you'll know his deal flow will keep your money out, and the points up front protect you from a quick flip.

Hi @Sean McGrady ,

Dallas and Houston are both great places to start out, especially as an owner occupant. W2 income to investor is a common route, it’s incredibly accessible down here, and your strategy idea is excellent. Feel free to reach out if you have questions!

The vast majority of people start local to gain experience and limit the downside risk.  On top of that, it's easier to know areas or visit potential properties in your own backyard.  I'm biased towards DFW, but starting local doesn't mean you always have to invest locally, and there's plenty of opportunities to start in DFW especially in single family.  Hope this helps!

Hi @Wilfred Kolkman , Are the parents that co-signed interested in investing in rentals? I would think about either partnering with someone to guarantee the loan (if buying off the mls), or saving up more if you want to do the hard money route.

Having a big cushion of cash and/or partners to offset risk when dealing with hard money will help build confidence and can get you better terms.

@Youssef Labib Hi Youssef, depends on what you’re looking for and area outlook. If you get an owner occupied loan you can get in with less money than a similarly priced house out of state, which would cash flow rented by the room.

If you’re in DFW, see the growth, and are optimistic about the long term vision a lot of investors will prefer that over the couple hundred/mo in extra cash flow, not to mention the peace of mind that comes with owning something closer to home. If paper return was all that mattered you’d probably see more money flowing out of state as opposed to staying local.

@Ivette Bravo From what I’ve seen it seems like most small multi family are harder to make work than a 4-bed single family. I know several people (including myself) that go the 4 bed (or convert a 3 bed to a 4) sfr route and rent the rooms for $500+/mo and it works out a little easier!

@Scott Krone It has positive cash flow, but it's only ~$2500/mo. The issue I'm running into now is commercial lenders seem like they're only willing to do 50-65% LTV on it given the low occupancy. I've gathered I'm likely going to need private/sub-institutional money in order to get it rolling during lease-up then go from there.

Would love to get a higher LTV/LTC based on what it'll be worth after improvements but I'm still looking for someone with the same viewpoint.

@Henry Clark I’ll look into it, thanks a ton.

@Taylor L. I had a seller financing portion in the contract initially and unfortunately it was a non-starter.