All Forum Posts by: Johnnie Bembry

How do you guys feel about investing in properties located in small/smaller towns? I've come across several multi-family properties w/good numbers located about an hour outside of a bigger city. I reached out to a realtor and he kind of advised against these type of properties due to potential property management issues. There's a few property management companies located within these cities so I'm not sure how accurate his statement is. He also manages properties as well so I don't know if it's a competition type thing either. You guys have any insight/hindsight on investing in properties in smaller towns? Thanks in advance! 

@Account Closed Exactly! 

@Ned Carey Oh wow, that's interesting. I'll keep that in mind. Thanks again! 

@Ned Carey I agree, there's no reason to jump into a bad deal because of owner financing. I believe I have the reserves just in case something goes wrong. Right, the thought of owning the property in 6yrs is one of two reasons I'm thinking about this property. I've actually been looking into refinancing a lower-priced loan because others have had the same issue in their past deals Do you have any suggestions on how to avoid this?

@Dennis M. I forgot to mention that I used Zillow as well for the rents. Yeah, I'll look into lowering the rate because the rates you mentioned are what I'm reading from other BP posts. Thanks!

@Tchaka Owen Your criteria makes sense, my thinking was that after putting in my $10K and the renter paying down the bill that I'd refinance after 6yrs that I would pull out $30K and get my money out of the deal. Worst case, I can see what the owner says about $20K and lowering the interest rate and he says no. Thanks, man! 

@Dennis M. According to Rentometer, rents in the area are between $600-$650. If I decide to get serious with this deal I'll reach out to property managers to see what they're saying about rents in the area. Do you have any other suggestions to find the going rents?

@Theresa Harris The more I read about interest rates for seller financing I agree with your statement. What's your opinion on what the interest rate should be? I'm reading the average is between 5%-8%. Regarding rent, the area rates for similar properties are between $600-$650. As far as taxes and insurance, Zillow is estimating $45 and $15 but I'm not sure that's correct. 

Hey guys, I'm a newbie looking for some advice. I'm looking to do a BRRR back in Kansas and I came across a deal where the owner is offering owner financing. I know for the most part people love owner financing but in this case, I'm not sure if it's worth it. The owner is looking for a total purchase price of $25K with $3K down at 10% interest over 6yrs so my monthly payment would be about $410. The property is a 2bd/1bth 720sq ft single-family residence and the details in the listing say the roof is newer, the vinyl siding, and the foundation is "solid" which I'll verify all this if I decide to look deeper into this deal. Just from the pictures, this house needs about $10K worth of updates (paint, appliances, and curb appeal)...ARV is $38K-$40K based on recently sold comps.

My biggest concern is cash flow. After running my numbers, I'll be hovering just over the break-even point but will own the house in 6 yrs which then I should be able to pull about $30K after refinancing. This is the only reason I'm considering this offer. (My cash flow numbers are taking into account the vacancy, management fee, maintenance cost, and CAPEX.) So should I look more into this deal?

Good or bad let me know what you guys think. Thanks in advance!

Congrats @Robert T. Brown! As someone who's also in the military, how did you finance your deal? Did you do a conventional loan with 20%-25% down? 

I don't have much experience but I think as long as the rental meets your standard for cashflow then it's fine. You just have to figure out what that cashflow number is for you. For example, is it worth it to buy a $240k property that only cashflows $100? I don't think so but say cashflow was $400-$500 then I would. It's all about your goals and standards.  

I think as Americans, we put too much emphasis on moving out/being on your own. For example, it's not uncommon to see a whole Asian family live together for a long time and essentially using group economics to start up family run businesses. Meanwhile, we Americans expect to move out/our children to move out at 18 and they/we are broke with nothing at that age when we could live with our parents and save money for a future investment. 

But to answer your question, I'm cool with my daughter living with me until she's around 30. This should give her more than enough time to earn a degree (or two), secure a nice job, save money, and have money for an investment. 

@Mitch Messer I appreciate your advice! You're right, the worst he/she can say is "no". In regard to the agent's commission, doesn't the seller normally pay that? Is it different because it would be seller financed? 

I'm in Vegas but this deal is back home in Kansas. I agree everything here in Vegas is overbought and heavily trafficked but everyone is trying to cash in on the Raiders coming to town soon.