All Forum Posts by: Mike Dymski

Congrats and welcome. Your first house can be a perfect opportunity to jump start your REI career whether you purchase a multifamily and live in one unit and rent the others or buy a house that you can renovate (sweat equity), refi and use the equity to continue investing. There are also very favorable loan terms for first time home buyers that are owner occupants. Good luck!

I paid $3000 for a 25 unit appraisal in SC.

If an investor performs proper due diligence and buys right, the investor knows the total return though exit of the property at the time of acquisition.  If you buy wrong, pay too much or are uncertain of your exit, it's an uphill battle.

Fix and flip is a good example. If you have modeled your rehab, ARV and other costs properly, you know with a fair amount of certainty what you will make on that flip as you leave the closing table.

a contractor competence radar device

@Jason Mak Thanks for the heads up on Colorvision.  We use the paint consultant at Sherwin Williams where we also have our contractors purchase the paint.  She has done a nice job on our other flips and rentals and is the catalyst for this idea on the apartments.  This recommendation is a little more edgy though.  We could always try it on a couple of units (it's only doors and shutters) and see what it looks like but it would be inefficient getting it done, purchasing paint, etc.

I asked my wife to find some pictures on the internet and she can't find any, which likely shows that it is not common.  She recommended keeping all the shutters the same color and switch up some door colors, which would be fine...not a big deal one way or another at that point.

Anyone use a different exterior door and shutter color scheme from one unit to the next in a multifamily building or complex...town house style...to provide some character and personal space feeling?  If so, how did it look and can you provide pictures?

No worries, the advice is my pleasure.  If you find BP helpful over time, feel free to pay back thanks through a membership...they facilitated it.

Good luck to both of you...those are nice price-to-rent ratios.

Having a 3.6% current cash-on-cash return and an outlook for depreciating property values is a tough combination. If you can earn 3% in a safe stable alternative investment, you may want to consider selling this property and putting the proceeds in that alternative investment. I understand the 3.6% includes principle reduction but that IRR excluding principle will go down and under water if you are forecasting declining property values. IMO, real estate is too much work to not get high returns.

Putting that aside, when to cash out refi can be a tough decision when you are not looking for another property.  IMO, most investors in your situation sit tight until they are ready to buy or put an equity line on the property so they have quick proceeds when and if a good deal comes your direction.

I prefer to purchase cash flowing investments that perform similarly in up or down markets; so, if I were in your shoes, I would refi and purchase another property where I would not be concerned if the property value went down some during an economic downturn as long as it continued to cash flow as it would in a stable economy.  My market has those types of investments, not sure if your market does.  Hope this helps...good luck with your decision...not an easy one.

Example: $100 gross rent, $5 vacancy, $45 expenses

Option A - ($5 vacancy + $45 expenses) / $100 gross rent = 50% cost ratio OR

Option B - $45 expenses / ($100 gross rent - $5 vacancy) = 47% cost ratio