All Forum Posts by: John West

Are you planning to BRRR? If so a portfolio might be good on the refi. I went through a portfolio lender because they gave me 80% of appraised value, not 80% of purchase price when I cashed out. Also, it’s a good idea to set a goal for what you want your financing to be. Then, call as many banks/credit unions as you possibly can and see who can get you closest to those terms. I must have called 10 institutions, but did finally find someone who understood my vision and was willing to lend to me the way I needed.

Thanks @Jay Helms. I enjoyed reading the brief (thank you) article on your tripod of investing criteria. Interestingly the owner may have overquoted the taxes. Either that or the municipalities website is wrong. I analyzed at the higher of the two. If the town's info is correct taxes are only $110/month. It also has the property assessed quite a bit less. I think I might call the town to verify the taxes, drop the purchase price until it makes sense for me, and offer on that price. What's the worse that could happen? I've heard "no" enough times, it doesn't scare me. :-)

Thanks @Bernie Huckestein. I'll take a look at that duplex, but I'm afraid I only have down payments for another 1 or 2 buildings as my situation is right now and I'm hoping those will be quads. I do have a building I purchased 10 months ago that isn't cash flowing well, but I really bought as a flip. I'm planning to sell that in a few months. I think that will help my cash situation early spring.

@Ryan Murdock The cash on hand is not a concern right now, but its definitely something I'm keeping an eye on. Do you know any good rules of thumb as to how much reserve I should have. I'm looking for my third property right now. My goal is to get a 4th property purchased by the end of 2018 giving me 10-12 doors and should be able to still have 15k in the bank. Is that an amount you'd be comfortable with? .... enjoyed your podcast by the way.

Here is a snapshot of a 4-plex analysis I did on a deal in central Maine. This is a simple 4 box analysis that @Brandon Turner did on youtube one day. I hear people saying they won't take anything less than $250 or $400 (or whatever) cashflow per door. I'm struggling with this one. I keep thinking this would be a huge moneymaker IF I don't need money for capex, or IF I don't have vacancies, or IF I end up managing the property myself someday. I know it would be foolish to make my decisions based on that. 

I'm struggling with the fact that this is a 2% deal, but I still can't seem to make it cash flow really well. When all these people talk about making $200 a door are they setting aside a percent for capex, vacancies, repairs, property management....? It seems like if I can't make this deal cash flow, the ones that will are going to be few and far between...

Would you do this deal? Am I being generous enough with my expenses that the low cash flow is acceptable?

Some additional info:

Assumed negotiated purchase price is $130,000

Seller is helping with 50% of down payment

This will be my 3rd property. The other 2 are doing well, but because I've only been doing this a year, my Debt to Income is nearing its max as income from the other 2 are not counted per any lender. 

Welcome indeed Sarah Bunch . I own a house in Bath. It’s a great market. Just ask if you have any questions. This is a great community.

I don’t have a specific bank for you. I use First Federal Savings out of Bath, but they won’t go much out of Lincoln and Sagadahoc county (until you have a long relationship built there anyway). I sat down one day and had phone conversations with a dozen or more loan officers before I found a bank that would work for me. The small 3 - 10 branch banks seem to be the best for investors.

Always good to see a fellow Mainer on here @Nicholas Olson!

I've dug clams since I was a kid and paid my way through college digging in the summers. I now fish recreationally for both lobsters and clams. It's fun when your lively hood doesn't depend on it and you only go an hour or two at a time.

Its good you've been fishing for a while and have a good income (especially for rural Maine).  That's going to help you a lot. There are a hundred different ways to get started, but let me recommend developing a relationship with a good portfolio lender. I'm only working on my third investment property purchase, but the partnership with a good institution is already proving invaluable. 

Looking forward to hearing your success stories in the future.

I have a keyword alert set up for “Maine” and it seems that once every month or so someone within an hour is doing a meetup. The last one I saw here on BP was right in Freeport I believe. I belong to Maine Apartment Owners and Managers Association. Its a little confusing because I believe that is the Parent organization and there are several local subsidiaries of it for certain areas (southern Maine, northern maine, Midcoast etc...) I belong to the midcoast group, but meetings are pretty sparse at best.

Welcome @Jean Point Dujour!

You'll be surprised how fast you can move even with a limited income (I don't make much more than you). I started a year ago and have really only been active for 4 or 5 months and have already purchased 2 properties and plan to add an additional 3 more buildings this year. I found a partner with limited resources, but a little more than me. We make all the decisions together, and our buying power is much stronger with the two of us. 

Keep networking and learning. Looking forward to seeing you around the forums.