All Forum Posts by: Josh R.

I will try and make this, thanks for posting!

Hi everyone! Looking for a RE agent in the Cleveland Ohio area that is seasoned in the area as well as invests in that market. If anyone has any recommendations on someone I can talk to that would be awesome and much appreciated! Thanks!!

Signed up! Thanks for posting this. Looking forward to this :)

@Chris Martin Thank you for all that information. After reviewing all this great info, I think I will continue the search elsewhere and find more ways to generate deals. I learned that I need to create more ways to generate the deal funnel vs just relying on my RE agent to find them for me in this area. Gonna go driving for dollars and Craigslist hunting for Landlords , etc. I WILL find a deal , make a deal, turn something into a deal. Not giving up!

@Bruce Scannell , awesome advice! Currently the duplex is 2005. As far as appreciation is has potential as Raleigh is still number one in the running for Amazon HQ2 being there which brings 50-60k jobs and 5 Billion dollars to the area. That would make these units skyrocket to say the least. But I cant gamble like that so I am acting as though that wont happen. Selma is growing slowly besides that but still growing.. about 2% on average. Having agent pull Commercial apps as well to see any potential for further growth. Like you said, it seems its just too close to breaking even that its just not worth the headache or the gamble.

@Anthony Wick , thank you for that advice! Gonna have my RE agent pull CMA's and see what she comes up with. Doing it myself a rough estimate comes out to about 170k ARV, and using the BRRRR method would put me just over 200$ take home not including getting rid of current tenants and vacancy cost. I think you helped solidify the answer on this one and thats to keep looking... cant imagine a seller coming down 50k or more unless its been on the market for a while or some other reason for selling quick.

The numbers so far:

$1,450.00MONTHLY INCOME

$1,039.96MONTHLY EXPENSES

$410.04MONTHLY CASHFLOW

6.11%PRO FORMA CAP

$10,074.00NOI

$46,000.00TOTAL CASH NEEDED

10.70%CASH ON CASH ROI

10.07%PURCHASE CAP RATE

ExpensesIncome50% Rule

Total operating expenses:	Mortgage expenses:
Vacancy:	$72.50	Repairs:	$43.50
CapEx:	$43.50	Garbage:	$20.00
Insurance:	$125.00	Management:	$116.00
P&I:	$429.46	Property Taxes:	$150.00
Misc:	$40.00

$100,000PURCHASE PRICE

Purchase Closing Costs	$6,000.00
Estimated Repairs	$20,000.00
Total Project Cost	$126,000.00
After Repair Value	$165,000.00

Down Payment	$20,000.00
Loan Amount	$80,000.00
Loan Points	$0.00
Amortized Over	30 years
Loan Interest Rate	5.000%
Monthly P&I	$429.46
Total Cash Needed	$46,000.00

Hi BP,

So went and did our first Multi Family walkthrough after reading ALL the BP books as well as david greene's long distance RE investing book and reading that about 3 times over! Learned a lot in the process. First of all, dont believe everything you read on the MLS description. We got there with our RE and turns out the quadplex was actually Section 8 in 2 of the 4 units. We decided not to go in there as this is not our goal. The duplex we went for and walked through , the carpets in one were destroyed and heavy smoke smell inside the unit. This tenant had been there for over 5 years. The other side of the unit had doves that lived in a cage inside the house. It had upgraded flooring downstairs which was a vinyl wood but the carpets again were destroyed. Water heater was replaced this week. Tenant was on month to month. Took a page from Matt faircloth and asked the tenants what there utility bills were as well as would they be willing to pay monthly for a storage unit outside. Elderly gentleman had dementia and was on a month to month lease. The smells that came out of that place as well was gagging to say the least. Pets in both units. Bathrooms were in good condition as well as most of the paint and ceilings. Water spots were in the kitchen ceiling which raised some flags. Septic had been dug up recently as well.

Now to the numbers.

Seller was asking 155k for the duplex. 700$/month for 1 unit, 750$ for the other with upgraded vinyl flooring. Garbage and landscaping is handled by the landlord. This is a quiet area just outside Selma , NC which is about 30 min south of Raleigh, NC. I would have to put about 20k in repairs. 

I say all that to say this, if I do repairs to these units but have the same tenants, I would be inheriting the same problems that are currently in place. Dirty, smelly living conditions. Its not that it was the worst, but that would mean the carpets would have to be replaced all the sooner as well as repaint every so often as well. Roof will need another layer of shingles within the next 5 as well. Taking all that into consideration, coming in a lot lower is the only thing that makes this property worth the taking. Has a lot of potential at the cost of some upgrades and possible rent raise. Worth it? Not worth it? I know the numbers wont lie, but is this C class housing worth the investment and potential headaches to even offer on? 

Hi All!

I am searching for Property Manager that you would recommend I use in the Raleigh and outlying areas. Looking at Garner/Selma area properties. Thank you so much for your recommendations!

Josh

Hi Josh, 

Send PM. Look forward to hearing from you about this. Thanks for posting!