All Forum Posts by: Miles Stanley

@Immanuel Sibero, i thought NOI basically included everything except financing costs?? i will look into the GRM method some more.

@Tony R. Yagiela, @Andrew Syrios, thanks for the feedback...but i thought cap rate was really for 5-plex's on up?

Hello all,

I've been heavily focused on SFR buy and hold analysis and I'm thinking about looking at a 4-plex in my area. When looking at the ARV, etc...how exactly is the ARV determined on a 4-plex. Before you say comps, let's say comps are scarce in this area for this type of property. What then? You can find SFR comps all day, but it seems MF comps aren't as plentiful.

@Logan Allec, Great advice and good points!  i will definitely keep this in mind moving forward.

Is it safe to assume you also recommend getting these things set up before investing at all?

Ive been researching entity formation (interested in SFR and MF buy and hold) and I'm a 'little' confused (to say the least).

Would it be best to consult a CPA first to determine the best structure from a tax standpoint and THEN get with an attorney get their liability/asset protection opinion and to set it all up??

OR

Get with the attorney first and set everything up based on their recommendations and then let the CPA just do their thing and be done with it?

Anxious to get started, but i want to definitely get these particular ducks lined up first.  Hopefull this is too broad a question.

Thanks,

@Brent Coombs

I do believe i could get all my cash back, I have heard this method preached by many people on BP over and over again and I'm convinced it will work...but you must understand that this is our first one so there is always the air of uncertainty since we haven't gone through the process.  i think we need to go through this deal with some caution to prove to ourselves that the process will work.  I'm sure once experience builds, we will be less leary.

Thanks,

@John Leavelle

i was thinking about all cash since i would be refinancing out later anyway. Otherwise, i am setting up a meeting with a mortgage lender ASAP that was recommended to ma by another investor to see if she can finance a deal like this for purchase. Its a SFR 3/2.

@Josh Stewart

The mortgage lender i mention above did say that for a cash out i will need to wait 6 months...so i will adjust my numbers for the holding costs increase.  Thanks for the input.

All,

If i can get it approved (i.e. the repairs aren't that crazy - but i haven't walked through the house yet), would it make sense to use a mortgage lender for both the purchase and the eventual refinance?  i will run it through my spreadsheet, but my thought was to use cash for the purchase since it would be faster (albeit it would wipe out a large chunk of available capital = unsettling).  My wife (who is anti-debt oddly enough) prefers to use financing up front to purchase to reduce the cash invested.  Any thoughts??

Thanks all!

Thanks @Chris T.!

For my own curiosity, can you explain why the lien would need to be cleared up by the seller before the sale?  I thought that the lien would come up in the title work and at that point i would decide if the deal is good or not.  Although this would be a complete waste of time from the sellers viewpoint to list a property that gets turned down repeatedly bc of a lien...

Haven't purchased yet, I'm about to go view the property soon (so rehab is estimated from pics), just wanted to share the prelim numbers so i can get some feedback.  Let me know what you guys think!

Purchase data:

Asking price: $85,000

My offer price: $73,500

ARV: (per Redfin sold data) ±$110,000

Rehab: guessing around $10,000

Closing/inspection, etc: $650 (i have no clue on this number)

Holding Costs: $1,147 assuming about 2 months for rehab

Cash Purchase - all in for $85,297

Income data:

Rent: $1,050 per month (from zillow area rent data)

Expenses (monthly):

HOA: $17

Insurance: $60

Taxes: $166.67

Vacancy: $52.50

Repairs/maint: $52.50

CapEx: $105.00

Property Management: $105.00

Total: $558.67

NOI: $491.33 ($5,896 annual)

Refinance:

LTV: 75% of ARV

Loan amount: $82,500 @3.75% for 30 years (estimated)

Payment: $382.07

Refi fees: $2,500 (assumed)

Total cash invested post refi: $5,297.33  ( I'm not sure if i calculated this number correctly, any input would help me greatly!!)

Cash flow:

Post refi: $109.26 ($1,311.16 annually)

Cash on Cash post refi: 24.8%

I do plan to get an agent to help me with CMA's, but these are preliminary

Now...

There is a child support lien for about $25,000 against the man (whose address is shown as this property on the lien), but i cant find where he is an owner of the house (only the woman's name appears in the public record)...so does this lien affect this property??  The lien says that it attaches to all personal and real property of the obligor (the man)...but again to me it doesnt appear he has any ownership of this property.

THANKS!!

@Suzanne Griffiths

I wouldn't mind sharing the details, I would like to visit the house first to get an idea of the repairs, which I hope to do in the next few days.

Will keep you posted, thanks!

@Suzanne Griffiths

Thanks for your input, i guess i wasn't asking specifically about the calculator, but rather how to calculate the Total cash invested after the refi.  i will try to email them directly or as you say, maybe ask Josh or Brandon.  Why didn't i think of that!

I think I've been staring at my spreadsheet too long...

Thanks again!