All Forum Posts by: Mark Douglas

@Willie Felder    25% down on $36k is $9k + another $4k give or take in closing costs.  

If the credit requirements are worrying you, the very first thing I'd do is call every single lender in your locale, and ask them what their credit criteria are for investment properties.  While you've got them on the phone, I'd ask them if they've got a minimum loan amount.  While it doesn't apply across the board, many lenders will shy away from deals sub $40-$50k range, so it's worth your time to iron out those details on the front end.  

So you're looking somewhere in the ballpark of $14k to get started, based on your numbers.  Keep in mind too, that there could be upfront capital costs (minor repairs can add up quickly!) upon acquisition. I personally wouldn't recommend draining your savings to get into a deal, but you have to evaluate your own risk tolerance.    

You know your market better than I do, so I'd run the numbers on as many of those potential properties as you can, and if you see a trend in ROI, you may be on to something.

Hope this helps!

@Keegan Thompson Good to have you here on BP! If you're free for lunch sometime, I'd love to meet up and discuss REI in Nashville! As @Leo K.  said, it's super competitive, and there are lots of "trending" neighborhoods/strategies.  Stick to what you're familiar with (or work with someone who's familiar with that niche) and avoid the herd mentality.

@Josh Braun  great way to look at it, thanks !

@Adam Kuhn congrats on analyzing your potential purchase!  Your analysis is a pretty good start, but there are some other expenses you'll want to consider, such as:

Lawn maintenance/snow removal, capital expenditures (major system replacements, like the water heaters, roof, hvacs/furnaces, etc) vacancies, turnover costs in between tenants, routine building maintenance, staffing (handyman?), property management (even if you're managing yourself for now, you may not want to once your empire grows to hundreds of units!), owner/manager software costs (rentec, buildium, etc), marketing costs, etc.

Some of these may not ever become your real life expenses, but if they did, you'd rest easily because you've already accounted for them, and your cash flow won't suffer  :)

I'm wanting to drop my FHA loan, and just go conventional. Are there any banks in Nashville (or national) that will take a 10% equity position to refi, or will they all pretty much need 25%?

@Derek Lacy right on the money.  I'm waiting on the adjuster's report, but I was told I'd only receive the depreciated value.  Maybe only a couple hundred bucks, but like @Randy E. said, just cover the difference and move on.

really cool thread.. I'm also 23, and am on my way to reaching my goals.  as long as I remain motivated and don't get lazy with due diligence, running numbers, property criteria, screening criteria, etc, it will all culminate in time.

@Yuta Tamura   2nd @Mindy Jensen's comment.  From a lending standpoint, if you bought a primary investment to live in yourself, then bought separate investment properties, the mortgage on your primary residence would add to your debt/income or TDI ratio when you go to finance the investment property.  This could directly impact the amount you're willing to finance from a traditional lender.  Of course, there are ways around it (larger down payment, 3rd party leveraging, etc)  Just a thought! 

@Jeremiah Bishop  I usually just google whatever my question is, and follow it with bigger pockets, and most of the time a forum will pop up. 

@Account Closed  Definitely, I like that idea of incentivizing them to leave the place in a decent condition.  Based on previous inspections, it certainly isn't the cleanest place in the world, but there haven't been any glaring damages.  Hoping for a smooth exit!  Thanks !