All Forum Posts by: Mitchell McGuinnis

So it’s not as much of an issue with the numbers as it is the deal? I guess that makes me feel a little bit better. I’ll just keep my nose to the grind stone and keep hunting for a deal. Thanks for your reply!

So I’m a bit frustrated trying to find my first deal. I’m looking for a mid-term rental or fix and flip in my area but I just can’t seem to get the numbers to work out. I feel like I’ve found a couple of good deals where the numbers SHOULD have worked out but my calculators are telling me different. Am I doing something wrong or have I just not found a good enough deal? Here is an example of a deal I looked at the other day that I feel like it SHOULD have worked out:

Purchase Price: $150,000

Down Payment: $37,500 (standard DSCR 30-year fixed rate)

Loan Amount: $112,500

Closing Costs: $4,500 (estimated 3% purchase price)

Rehab Costs: $50,000

ARV: $230,000

Total Cash Investment: $92,000

Property Taxes: $1,759/yr

Insurance: $2,000/yr (estimated)

Monthly Payment: $748.47

Gross Rent: $1600/mo

Vacancy Loss: $96/mo (6%)

Property Management: $166.67/mo (8%)

Repairs & Maintenance: $128/mo (6%)

Cap Ex: $48/mo (3%)

NOI: $935.07/mo (Rental Income less Vacancy and Monthly Expenses, Taxes & Insurance)

Debt Service: $748.47/mo

Cash Flow: $186.60/mo

COC Return: 2.43%

I have been shooting for a COC Return of at least 8% and just can't seem to get the numbers to work. Any words of wisdom or advice would be appreciated!

Mitch

Hey Richard! Thanks for reaching out, I was just talking to a contractor about how to price renovations in my area and we spoke about flipping vs holding those projects. I’ll plan on attending the meeting and would love more info from you. 

Mitch

Thanks, Drea! I will definitely look into David Greene. Thank you for the advice on keeping my books in line, I agree that the numbers on multiple properties will be a bear and there will definitely be some growing pains. Setting up an accountant and diving into Quickbooks is definitely on the to-do list.

Starting slow might be the best advice I could hear. Although I feel like I have the capital, time, and desire to dive in head first; it might be prudent to start with one, maybe two properties, to get my feet under me before I stretch myself too thin. I appreciate you taking the time to reach out!

Hey Everybody!

I wanted to introduce myself and see if I can solicit some advice and/or suggestions from the community. My name is Mitch, I spent the last 15 years in law enforcement in Colorado. The family and I recently moved from Colorado to coastal North Carolina so that we could live on the coast. I had a personal "holy crap" moment a few months ago where I turned around and realized how much time I had lost with my family over the last decade and a half due to my career in law enforcement. I decided that I would not be missing any more holidays, birthdays, sporting events, or school functions for a job.

My wonderful wife, Ali, is a successful Realtor in Northern Colorado. She has about ten years worth of experience and has made some amazing network connections in that area. She was able to introduce me to some investors and I realized the potential that real estate provides for my personal and professional goals here in our new home.

Now, on to the advice and/or suggestions from the community:

I have dived head first into the education aspect of investing and feel like I'm drinking from the fire hose! We have about $300k of capital saved that I am putting towards my investing business. My initial goal is cash flow with the least amount of capital investment possible. I want to avoid the pitfall of tying too much capital up in properties just because I have it. I need to replace the income from my job with cash flow from real estate. I read Avery Carl's book about STR investments and think that STR's are probably the way to go in order to replace the cash flow. I also want to explore mid and long term rentals since I have plenty of time to manage the properties myself. We also happen to have landed in a market with a large military presence which lends itself to mid and long term rentals. That being said, I understand that I am just beginning this journey and would love any advice you are willing to offer! What are some other investment vehicles that I should consider to help me meet my cash-flow replacement goal?