All Forum Posts by: Matthew Ban

@Account Closed I appreciate your input, and I did decide to pass on this deal. Looking again at what you said about cap rate, 10% would be incredible... Are there deals like that in Saint Louis that are not in war zones? My search continues!

I appreciate all the feedback, sorry I didn't get back to your questions sooner. 

@John Leavelle $103k is the comps number the realtor gave us; the street and area has a lot of duplexes. Just going by sight, I would rate the curb appeal of the place pretty highly in the area. Built in 1965. The rent is $690 per side, so monthly cash flow above is total for both units. Something I didn't mention is that the roof is 15 years old but the deal above includes a new roof. 

@Account Closed I appreciate your feedback as well. I was hoping to get $100/side but I'm pleased to hear that there should be better deals out there. I will admit that I was leaning toward your opinion already. I will say that I was pretty conservative on expenses, like $70/mo for the yard won't be year-round. The CapEx may be lower with the new roof (something I didn't mention in the OP), I plan to manage this one to start so management fees won't be there (but still wanted to build that in), and I wasn't sure about vacancy so I used 10%.

I know this isn't a "great" deal, but for my first one it felt okay to get something that was practically turnkey so I could learn about some minor repair and land-lording. But again, I appreciate all the advice and my mind is not made up. 

I'd like to get some feedback on this deal I'm considering on a 2 bed/1.5 bath duplex in Saint Louis, MO. I copied the particulars from the BP rental calc (I hope that's okay) and my question now is how good is this deal? I'm sure you may want more info, so please ask away. I would say the neighborhood is a C to B, with the school district being the major drawback (4/10). Only one side is currently rented. 

Concerns: No storage, at all. But I think this could be nice for a single person or couple's first place together, and maybe would work well as a furnished home in the future. 

All of the outlets are 2-pronged, so no grounds, except the required GFIs in the bathroom and laundry. Will this be an issue in the future? 

Purchase Price: $102,500.00

Purchase Closing Costs: $1,500.00

Estimated Repairs: $4,000.00 (not much work needed and I doubled my estimate) 

Total Project Cost: $108,000.00

After Repair Value: $103,000.00

Down Payment: $25,625.00

Loan Amount: $76,875.00

Loan Interest Rate: 5.000%

Monthly P&I: $412.68

Total Cash Needed By Borrower: $31,125.00

Monthly Income: $1,380.00

Monthly Expenses: $1,275.93

Monthly Cashflow: $104.07

Pro Forma Cap Rate: 6.02%

NOI: $6,201.00

Total operating expenses: $863.25

Mortgage expenses: $412.68

Vacancy: $138.00 (10%)

Repairs: $138.00 (10%)

CapEx: $138.00 (10%)

Insurance: $68.00

Management: $138.00 (10%)

P&I: $412.68

Property Taxes: $173.25

Lawn: $70.00

Financial Info

Income-Expense Ratio (2% Rule): 1.28%

Total Initial Equity: $26,125.00

Gross Rent Multiplier: 6.19

Debt Coverage Ratio: 1.25

I'm SUPER new to investing but I've seen a ton of good info come out of the South Side investor club REIA. May be worth asking the same questions in that email group too. As far as it being dead in St. Louis, it certainly seems very much alive to me, but again I'm just getting started. Link: http://www.meetup.com/TheSouthSideInvestmentClub/

Sorry, I'm getting used to using this on mobile... Peter MacKercher The timing on everything will just depend on how much I can get done. If I end up doing both at the same time, if I have the means, then that works for me as both are projects that I'm motivated about. My current house will take me some time to get ready to sell, so most likely I'll be pursuing a property with the group first. That's exciting to hear that St. Louis has a few groups available and I'll be looking into those shortly. Thanks for the reply!

Thanks everyone for the welcome and comments. Peter MacKercher

Hi, I'm just getting started in real estate investing, and I'm excited about this site and what it has to offer. I've been reading and listening to podcasts about the subject and am now ready to jump in and start making some mistakes but learning along the way. Here are my short-term action items: 1. Join a local REIA 2. Work with my small group (4 investors) to locate and finance a property to flip OR buy and hold based on the deal we find. The challenge right now is finding the financing for this first deal, so I'll be looking for articles on here for advice. 3. Sell my current house and buy a multi-unit as my primary residence. I want to live in one unit and reduce (or eliminate) my mortgage payment by renting the other(s). That's where my focus is at the moment and I can't wait to get started!