All Forum Posts by: Jaysen Medhurst

Hi @Aaron Jones, I have 2 kids under 3 years old, so feeling you.

If your current rental isn't cashflowing or appreciating, get it on the market tomorrow. What are you waiting for? 

I don't know your market, but all things being equal MFR is the way to go. You start to get economies of scale, spread out your risk, and "train" for bigger and better down the road. Starting with a 4-plex is a good choice. How about BRRRRing a 4-plex so you get your equity back out?

@Michael Cavicchi, I'm also looking at Manchester for investment properties (grew up there). There are a lot of duplexes, compared to 3-4 families. One resource I've found helpful is the town property look up. It's not perfect, but you can see the zoning/current configuration of each property, owner, when it was purchased, etc.. 

Remember, any property is "for sale" given the right circumstances. Might be worth the hustle to find an off-market deal.

Good luck. Let us know how it goes.

@John Mainwaring, I don't know your market, but it's hard to justify the price. I would only expect to see WOLF or similar in the highest of high-end rentals...and I live in one of the most expensive areas/towns of the country.

@Lissette Deleon, I was looking in Westerly, RI and Pawcatuck, CT a while back and saw some attractive properties. Probably a better place to get started.

@Dustin Moore, double check that occupancy and make sure it is "Economic Occupancy" (i.e. all the units paying all the rent), not "Physical Occupancy" (i.e. units are lived in, but paying late or not at all).

You have to get ALL of the properties expenses and income, for at least the last 2 years. Sometimes they won't be released until you make an offer, just make sure you have a due diligence contingency in your offer.

Based on that Gross Rental Income and taking into account the 50% rule, you're looking at a 9% cap. That's a little higher than normal. Especially, in a B+ neighborhood (typically 8% all things being equal, a bit lower in B+/A), but I don't know your market or the neighborhood. That might be right down the middle. You should confirm the local cap rate with your broker or a local property management company.

You did not make a mistake walking away. If the owner isn't willing to provide a P&L either he's hiding something (from you, the IRS, who knows) or his bookkeeping is such a mess that he has no P&L. That's a huge red flag to me.

@Victor Steffen, agree that Vacancy, Repairs, CapEx look low. I figure 10%, 7.5%, 7.5%.

Just an idea, is it possible to change the configuration to 2, 1bd/1bath & 2, 2bd/1bath? You might lose a little rent on the current 3bds, but should more than make up with 1bd and lower vacancy.

P.S., we're neighbors! We should grab coffee.

@Leona N. if you're sacrificing cashflow, but will be living w/o mortgage/rent expenses, well that makes it worthwhile.

@Nancy Fortenberry, agreed, just make sure you look at local comps in the area. I live in an expensive area and most of the high-end home have bedrooms with en suite baths. That's just the market. If it isn't what you see in your area, you'll be wasting money to add an extra bathroom