All Forum Posts by: John Sween

Investment Info:

Townhouse buy & hold investment.

Purchase price: $340,000
Cash invested: $5,000

Beautiful town house which is 2 years old, that I live in currently until the next opportunity arrives. Mortgage is $1476.00 and the next door neighbors are renting for $2,750.00 for the exact same house.

What made you interested in investing in this type of deal?

I found an off market deal. Convinced the seller to sell it to me. Seller cancelled her open house and gave it to me for what she was going to start the bid at.

How did you find this deal and how did you negotiate it?

I found the deal on Zillow believe it or not. Seller by owner and I reached out.

How did you finance this deal?

10% conventional, waived inspection since it was 2 years old the property was still under warrantee.

How did you add value to the deal?

Walked in with equity; however, I also added storage racks and electrical updates.

What was the outcome?

Perfect money maker for when I move to the next project.

Lessons learned? Challenges?

Be patient, your time will come. I had another property that I was about to buy, but something in my gut told me to wait. I waited and nit only is it the best townhouse with the best view but a money making machine when the time comes.

Or Option 4- keep my current interest rates and save enough for a 25% down payment? 

 Totally agree. I hope I can find other properties that are close by. I am just not too sure what I should do. I live and own in a town house out of state as well. Here are my options.

Option 1 – Regular Saving/ No new action

Save approximately $7,000 per month. To reach the same $90,000 would take almost 13 months of savings.

Option 2 – Cash out / Buy quickly if something is found

Cash flow increase by about $1800-2300 per month depending on rents and accounting for property manager.

So New savings goes to $8800-$9300 x 13 months = $114,400 - $120,900

Option 3 – Cash out the town house/ Cant find any property within 13 months

Cash flow decreases by $1,500. Total cash to purchase increases $90,000.

$5,500 x 13 months = $71,500 + $90,000 from cash out = $161,500.

With option 1, I don’t have the ability to purchase if something shows up on market.

With option 2, I increase your cash flow and gain an equity-growing asset.

With option 3, Im still ahead of the savings in option 1 and you have the opportunity if there is something that comes to market.

Cons -risk, I lose my interest rate of 2.3% on house 1. And I lose 3.5% on house 2. Both would reach to 4.45-5%. Mortgage on town house would go from $1475- to $2400.

Or should I wait?

 Appreciate it! I moved away from NH but I am still very interested in 2-4 units. 

John

 Thank you!

 You can never go wrong with basic colors. White, light grey ect. 

 This was in NH! I am hoping to do more but acquiring the funds is the hard part. 

Option 1 – Regular Saving/ No new action

Save approximately $7,000 per month. To reach the same $90,000 would take almost 13 months of savings.

Option 2 – Cash out / Buy quickly if something is found

Cash flow increase by about $1800-2300 per month depending on rents and accounting for property manager.

So New savings goes to $8800-$9300 x 13 months = $114,400 - $120,900

Option 3 – Cash out/ Cant find any property within 13 months

Cash flow decreases by $1,500. Total cash to purchase increases $90,000.

$5,500 x 13 months = $71,500 + $90,000 from cash out = $161,500.

With option 1, you don’t have the ability to purchase if something shows up on market.

With option 2, you increase your cash flow and gain an equity-growing asset.

With option 3, you are still ahead of the savings in option 1 and you have the opportunity if there is something that comes to market.

Cons -risk, I lose my interest rate of 2.3% on house 1. And I lose 3.5% on house 2. Both would reach to 4.45-5%.

Or should I wait?

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $321,000

3 Unit multifamily that cashflows $5100 a month.

What made you interested in investing in this type of deal?

I love the idea of passive income.

How did you find this deal and how did you negotiate it?

I found it myself. Both parents passed away and there was a mortgage on the house I was living in. It was a matter of time before the house would get foreclosed and I had to make a move. I did not want to pay someone rent. I then made the move to have people pay me.

How did you finance this deal?

FHA

How did you add value to the deal?

Fixed it up a bit. New paint, hardwood floors, updated electrical.

What was the outcome?

Great investment property.

Need some advice, here are my scenarios.

Option 1 – Regular Saving/ No new action

Save approximately $7,000 per month. To reach the same $90,000 would take almost 13 months of savings.

Option 2 – Cash out / Buy quickly if something is found

Cash flow increase by about $1800-2300 per month depending on rents and accounting for property manager.

So New savings goes to $8800-$9300 x 13 months = $114,400 - $120,900

Option 3 – Cash out/ Cant find any property within 13 months

Cash flow decreases by $1,500. Total cash to purchase increases $90,000.

$5,500 x 13 months = $71,500 + $90,000 from cash out = $161,500.

With option 1, you don’t have the ability to purchase if something shows up on market.

With option 2, you increase your cash flow and gain an equity-growing asset.

With option 3, you are still ahead of the savings in option 1 and you have the opportunity if there is something that comes to market.

Cons -risk, I lose my interest rate of 2.3% on house 1. And I lose 3.5% on house 2. Both would reach to 4.45-5%.

Or should I wait? Never have done a brrrr so I’m looking for a mentor but buy and holds is what I’ve done so far. Thank you