All Forum Posts by: Jay Dewberry

Welcome to BP Matthew. If you get a chance, take advantage of the Atlanta REIA and Georgia REIA meetups. There are many knowledgeable and successful investors there as well. Good luck on your future endeavors.

Hi Robert. I have to agree with @Chris Eaker. The deal looks decent. Make sure you have contingencies in your contract so you can have someone perform a thorough inspection on the inside of the units. Wouldn't want you to end up with a potential nightmare on your hands. Also, check with property management companies or some source that can confirm market rents for your area. Otherwise, if this is in your investment strategy, go for it. Good Luck.

BTW, it's normal for banks to want a property to be 50K or better for a loan above 10yrs. Anything less, tends not to be worth it to the banks.

The Annual Income, PV(Present Value), and Expenses growth depend on the market that the property is in. These are assumptions for the most part but can be guess-timated just to give you an idea of future potential. For now, you can use something like 2%. Sales Expenses assumes you will sell your property sometime in the future and want to take in consideration any future fees incurred. For now try something like 8%(could be more or less but for now, just assumptions). 

My apologies, looked at your location. I would indeed run those figures through the Rental Calculator. A community with a CDD fee and HOA tend to be desirable areas with many amenities. The CDD fee's are most likely annual and recurring. This could be a good sign on appreciation on the property, and you can include that in your future assumptions in the analysis.

Hi Neil. Not sure if there are other factors in Canada that would differ from U.S. in terms of analysis, however I would put the numbers in the BP Rental Calculator to see what the yields are. Looks like it doesn't pass the 1% rule. However, to have a clear picture of the potential, factor in all the numbers. Taxes are going to eat up close to 3 months income, and that's before any financing costs. 

I would have to agree with @Samir Shahani The numbers don’t seem to leave much room for any cashflow. Even if including appreciation and depreciation (which seems low for a $300k property) to ascertain an overall investment picture, this seems somewhat bleak if there is not any value added or rent increase potential. Then there’s Capital Expenditures to worry about. My thoughts are if you are going to purchase this property, have plenty of reserves.

Hi Ross,

Welcome to BP. My initial thoughts are welcome to the world of investing. If the numbers work, go for it. I would say to make sure to go over the guidelines for the first time buyers program because they may or may not allow a purchase that requires extensive repairs. Some want the unit to be move in ready, or minimal improvements needed condition. However, there are some programs such as a FHA's 203k rehab program that could serve you if more rehab work is needed. Nevertheless, again, if the numbers work out, go for it. Also, as you will become a landlord, make sure you have a reserve budget for repairs/maintenance and perhaps capital expenditures. I am vaguely familiar with Charleston(mostly North Charleston area), but I know duplexes in decent neighborhoods may be slim pickings at that 100k price point. Perhaps get some wisdom from fellow BiggerPockets member @Jay Hinrichs and/or @Russ Scheider. I believe they’ll have a pulse on the Charleston SC trends. Either way good luck. 

Hi Duane. Welcome to BP. To determine if it's a win/win, we're going to need some additional information such as what income can the unit produce? But from my limited understanding, it becomes a price v/s terms type of negotiation. The seller can have his price, but on your terms. Or the seller can have his terms but will have to concede to your price. He can have one, but not both. Perhaps search BiggerPockets for "seller financing" strategies as this topic has many posts. Nevertheless, I will hang back to see what other more seasoned investors will chime in with. Hope it all works out. Good luck.

Hi Matthew. Welcome to BP. Just to give you a heads up, you may get some finger wagging on this from some of the members. Generally, it is looked at as ‘hustling backwards’ to buy an “investment” with negative cashflow/equity. I totally understand wanting to have a backup for retirement, but to come out of pocket each month seems counterproductive to wanting to “save” over the next five years for a larger property. How would this be possible? By the way, what’s the purchase price? I ask because even if you chose to take this route, how many years would it take for you to truly break even? Have you factored in other costs (vacancy rates, repairs, capital expenditures, taxes, ect) into overall loss you want to take? Just my initial thoughts. Either way, good luck.

I would have to agree with @Brent Coombs on this one. A deal that passes the "2% Rule" will peak my interest every time, especially if it's not in a war zone. Is there any reason you're hesitant? How much rehab does the unit need? How's the rental market in that area? Nevertheless, unless there is some major issues in that area, why not go for it. Just make sure to do your due diligence.