All Forum Posts by: Michael McCorkle

Chad,

I am new to Blo/No and also new to investing. I am working on my first fourplex and hoping that it will come to pass. I would be happy to meet up some time, but have a day job which would require an early evening or weekend timing. Let me know. 

@Jeffrey Holst,

Thank you for your time and information. There is always a challenge that you can't see, especially in older homes like these. Nothing goes as you plan. I have bought, owned and flipped several, so I know that as fact. However, I do think they are a good opportunity and if I could move ahead on them I probably would. There will be others when the time is right. Thanks again. It's good to know I am seeing the right opportunities. @Mike McCorkle

Jeffery,

Thanks for the feedback. I will put that in the calculator and see what happens. 

I bought a home in Seattle for $89,000, many years ago. I sold it ten years later for $239,000, but If I had found a way to hold onto it, the same house is now worth over $750,000. If you can hold onto, even if you let someone else manage it, the outcomes might be worth it. Good luck. 

Peter. 

Thank you. Your comments are exactly why I put this out there for. Here are some clearer details and answers to your questions. I obviously was too general in my numbers. Lets try it again. 

Total purchase price 300,000 assumes buying all three properties. 

20% down (60,000)

8684 estimated closing costs (closing cost calculator)

240,000 mortgage 

1517.71 monthly payment (30 year amortization)

15,000 in immediate repairs to make all units available (not part of loan)

Goal of investing 25,000 a year in property improvements to upgrade rents

Operating Expenses

8600 taxes on all three properties

800 insurance

2000 a year in repairs and maintenance

1000 a year in legal fees

 Thanks again Peter

I would like help analyzing a deal that looks good to me. Even though I am not able to move forward on it at this time I am trying to hone my analysis skills for when I can. Please give me your thoughts.

1. Three triplex units next to one another. Historic converted homes in different stages of condition. One has a unit over the garage, so there are ten units total.

2. Six units occupied, two available for occupancy but unadvertised due to the sale process. Two in need of major cosmetic work or remodel.

3. Rents currently 450-850 per unit which could go up to 550-950 with improvements.

4. Average property cost is $100,000.

5. ARV would put the properties in the 175-200,000 range.

Assuming I bought the three properties as a portfolio with 20% down here are my estimates:

• Mortgage Estimate: $250,000
• Cash Investment including some improvements: 75,000
• Monthly Mortgage Estimate: $1600 @ 5%
• Current Monthly Rental Income with leases: $3000
• Potential Monthly Rental Income with minimal renovation $5000
• Estimate Year One Assuming Improvements and additional tenants: 50,000
• Assumed Vacancy Rate: 10%
• Effective Gross Income: $45,000
• Operating Expenses including taxes, assuming self-management: $15,000
• Net Operating Income Year One: $31,000
• Debt Service: 19,200
• Cash Flow: $11,800
• Return on Investment Year One: 16%
• ROI Year 2-5: ?
• Debt Service Ratio: 1.6
• Cash on Cash Return Year One: 41%
• 2% Rule: Currently 3000 with potential for 6 or 7000 after improvements

Shirley, I hope you are hearing the resounding, NO!, on the guru model. It really comes down to your learning and effort, which can feel overwhelming at times. I have been around property most of my life, but thinking as an investor and knowing the numbers is different than being involved in remodeling and maintenance. 

Hang on to your money - learn, learn, learn. Or find someone like me in your area, that may have more knowledge but doesn't have the cash position to move ahead. You might be a good partner for the right person. But YOU still have to learn otherwise you can be taken advantage of. Bests

Samantha, 

I think it depends on the company. My wife and I bought a Condo in Wisconsin a couple of years ago, and I did the loan in my name with my debts and credit rating, and they didn't count hers at all.  

Bests,

I am looking for a potential partner or private lender for fixandflips or buyandhold small multifamily properties in Southwest Wisconsin. I am just launching my REI venture, but have many years of management, property and rehab experience through my various roles. If you interested in finding out more please PM me.

Rebecca,

It is a beautiful time to be in Lake Geneva. I am still putting together the pieces and not ready to launch. I would like to know more about what you are doing. Let's connect and talk elsewhere. 

Mike