All Forum Posts by: Jim H.

Thanks, Robb. That's very helpful. I will do that. 

Todd, the property is in Fairfield County, CT.

I'm looking for some help analyzing my first potential deal. 

It is a 4-unit with under-market tenants in place. The overall condition is good and the neighborhood is A-level. Tenants pay all utils except water/sewer.

There is also a full sized raw space for a 5th unit (2Bed/1Bath) that needs a lot of work to make rentable (about $100k is the estimate).

My agent thinks we can get it for $920k (given the work needed), with only 5% down, which is below asking and below comps (all full 5-units) which are going for around $1.1-1.2m.

It has 7 parking spots with room for 2-3 more, and is zoned for 11 units total (permitted only for 4, so buying as residential, but planning to convert to commercial). There is a decent sized lot where more could be built later.

Upgrades possible include finishing the basement for storage and laundry, charging for additional parking, and bringing rents up to market level.

Adding in all the operating costs plus debt service, with allowance for maintenance & vacancy, and at market rents, the property runs a $20k/yr loss. (Does not include any additional revenue or costs from upgrades.)

My total cash in after a year would be about $65 for DP/closing, $20k in loss from operating costs, and whatever portion of the renovation costs I can't borrow (up to about $100k). 

The investor-friendly agent I'm working with recommends a cash out refi after 6-12 months (after the 5th unit is built out, so it would be appraised at the level of the nearby comps), and then put that into another property (rinse, repeat).

It seems like it could still be worth it, even at an operating loss, but I feel like maybe I'm missing something. 

Any thoughts on this possible investment? Thanks.

Thanks, @Joseph Bui - I would love to connect and hear more about that. I'm based in CA, and I'm also looking to invest out of state. 

Oh no! Sorry to hear that, Mark. Thank you for sharing that experience though. 

Thanks, @Rene Hosman! 

Hi Rene. REI Blueprint is his company and the name of a different product.

What he was offering yesterday was a two day workshop about something new he’s been doing around “shared living”. Things like assisted living, sober living, student housing etc. All basically rent by the room options and many of them offered in partnership with non profits with grants (homeless services etc).

It was a very compelling pitch actually (though admittedly I'm new to REI but not new to coaching). And he seemed like a smart solid guy.

I saw a very compelling presentation yesterday by Jason Roberts of REI Blueprint. At the end of his talk at an LA REI association meeting, he offered tickets to his $1997 live event at half off.

I liked him and what he was offering (and being in the coaching space myself, I’m not at all bothered that he was selling something) but I’d never heard of him before, so I wanted to do a bit more digging before signing up.

I am curious if anyone in the BP community  has had experience specifically with him, his courses or coaching program and would mind sharing their thoughts. 

Thanks!!

Thanks, Matthew. That totally makes sense. 

Hi Benjamin. Thanks so much for your response and my apologies for missing it til now. 

I totally hear what you are saying about a primary residence not being an investment and agree with you.

I guess I was just looking at it from the perspective of total return on capital, but maybe that doesn't make sense in this case. Thanks again!

We are planning a move to be closer to family and are looking at whether to rent or buy given the current market. Can anyone guide me on how to look at this from an investor perspective? In other words, how would I calculate the return (from a purely financial standpoint) of "investing" in a primary residence vs renting and putting the money elsewhere (perhaps even into an investment property, but also considering buying a business)? We have funds that could be used for either (primary residence or other investment) but I'm not sure how to do the math on this comparison. Thanks so much.