All Forum Posts by: Kendall Short

I’ve got a 4plex currently under contract with a 60 day closing (Aug 4) in Saint Joseph, MO. 

Quick backstory: $305,000 purchase price, using a mortgage broker. 

FHA Loan, owner occupying 1 unit.

PITI is $1933, current rents of 3 best units are $2215 (795,795,625). All well below market rents as they should be AT LEAST 850-900.

My lender wants 10% down FHA, 4.76%, 30 year am, with all three units having new leases signed at an average of $900 per month.

I don’t know know how I can have existing tenants and newer tenants be under my leases prior to closing, but I understand that mortgage brokers have to go through very strict criteria to sell those loans to FMae/FMac. So I’m heading to local banks tomorrow to hopefully have them work with me on the deal... do any of you have any advice on how I should present the deal to the local banks? I’ve got some DD along with all of my paperwork they need, as wel as the BP deal analysis. Also, if you know of any local banks in the KC area that work magic, let me know!! 

Hi all,

I am looking for an opportunity to assist experienced house flippers in my area. I am located in Saint Joseph, MO and I am currently in the process off purchasing a house hack, but would love to gain some experience on the flipping side of real estate. I'll have some capital after hopefully purchasing this property, but most importantly, I've got T-I-M-E. My schedule is open M-F 0800-1500 and I'm looking to fill that gap with this opportunity if one presents itself, even if it's just riding around and learning the process.

I've read books, I've listened to damn-near all of the podcasts, and I'm just ready to take action and gain real world experience.

Thank you and feel free to message me on here.

Kendall Short

Hi all,

I am looking for an opportunity to assist experienced house flippers in my area. I am located in Saint Joseph, MO and I am currently in the process off purchasing a house hack, but would love to gain some experience on the flipping side of real estate. I'll have some capital after hopefully purchasing this property, but most importantly, I've got T-I-M-E. My schedule is open M-F 0800-1500 and I'm looking to fill that gap with this opportunity if one presents itself, even if it's just riding around and learning the process. 

I've read books, I've listened to damn-near all of the podcasts, and I'm just ready to take action and gain real world experience. 

Thank you and feel free to message me on here. 

Kendall Short

Originally posted by @Robert Schumacher:

Kendall Short I would want to know if they are motivated to sell. Something tells me they are happy keeping it on the market, and waiting until an inexperienced investor makes an offer.

What are other similar 4-plex units selling for (sold comps) and I personally would be offering less to test the water. Remember ... we make our money on the purchase.

On a side note, my grandfather always said “All that matters is that YOU are satisfied with your purchase price.” If closing on this helps you get closer to achieving your goals, GO FOR IT !! Best of Luck

I do know that the husband passed away last year so she wanted to get rid of it. 

I’m going to initially offer $260,000 and hopefully not get ignored and cussed out haha. 

But yes, I just need a place to live as I’m currently living with my girlfriend and her parents, and I’d much rather have this deal that breaks even while I’m house hacking or paying me a couple hundred bucks per month than taking up space at their place. Rents can be raised and if I buy good, I think it could be a great long-term hold. Thank you, Robert. 

Originally posted by @Account Closed:

.......

"Current rent roll $2165 vs your est of $3400.

If you can justify the increase go for it."  

Sorry about this miscommunication, I know it may be difficult to read on there! I used $2165 for the three units that are currently being rented out, with me owner-occupying the cheapest ($600) unit.

$3400 is after moving out and having upped the all four of the rents to $850. $800 at a total of $3200 may be more feasible.

Alright guys, I'm going to check this place out on Wednesday and most likely put an offer on it after that. I went to see it a few months ago, but thought I wasn't ready for such a "big" deal at the time. Currently waiting on my pre-approval letter. 

The deal is as follows:

Specs: Four units, two side-by-side duplexes. All units are 2x2 with a basement that can be utilized as an additional bedroom + a 1 car garage. I will occupy one of the units.

Asking: $310,000, on the market for over a year

Offer: $260,000 hoping to negotiate down to around $280,000 - $290,000. Ran the analysis at $290k with around $5000 closing costs and inspection fees, but plan on having the seller pay for CC if they don't budge on the price.

Would like to put 5% down, but lender asked for 10% for them to finance since my commission income last year isn't as pretty as this years. I ran the deal with 7.5% down on the BP calc.

FINANCIALS

Down Payment: 21,750

CC & Inspections: 5000

Cash Needed: 26,750

Monthly Expenses

P&I: 1453/mo

T:  208/mo

I: 115/mo

PMI: 175/mo

PM: 232 (I will attempt to self-manage for as long as possible)

Vacancy @ 5%: 116/mo

= $2299 monthly payment with PM, $2067 without PM in place.

I figure cap-ex and maintenance will happen, and we don't know when.. as something could happen day 4 of owning the property. So I will have cash reserves set for the property.

Current Rents

Unit 1*: 615 Unit 2: 775 Unit 3: 775 Unit 4: 600 (Will occupy this one)

= $2165 monthly rent

* I plan on upping this to 775 once in my possession, and eventually increasing all of them to 850 once it's turnover time. <-- any advice on increasing rents would be great. 

Future Rents

Once I move out and all of the units are rented 

Unit 1: 850 Unit 2: 850 Unit 3: 850 Unit 4: 850 

= $3400 monthly rent

Let me know if this sounds like a good first deal to you. I am always open to advice and constructive criticism. Thanks all. 

Congratulations! I’m currently working on my first deal now, and seeing a fellow newbie get started is great to see. Best wishes for the future!

Hey BP, So I know we were taught to make sure we account for cap ex, repairs, and vacancy at a monthly rate when analyzing deals. My question is, why don’t we just make sure we keep a healthy cash reserve to be ahead of the game just in case repairs are needed to be made as soon as we purchase? In a perfect world, we could set aside funds monthly and not have any big repairs for 5 years or so. But, you and I both know that, that may never happen and you’d better be prepared for something big to come up. I get it when analyzing to minimize risk and make sure a deal cash flows, but I feel like that may really get someone crunched if not prepared.

Thank you, Mindy!

Question for employees at BP or anyone else that knows the answer to this. I’m about to upgrade to Plus now. My question is, if I️ were to upgrade once again to a Pro account later on, would it still be $290 since I’m subscribed to something other than a basic account now, or would it go back to $390? Thanks in advance!