All Forum Posts by: Marcus Narvaez

 #2 is not going to know how to do this properly, so unless OP has accounting experience and can basically supervise/tell the bookkeeper how to do the job, then #2 likely won't work. $20 an hour will get you someone who knows QB software and can input transactions, but likely not someone that can design and maintain your books at a quality level.

Source: I'm an auditor. I've seen what small business books look like, and even with option #1 they aren't very good. I would cringe at trying to audit something using #2.

@Chris Heeren are those off MLS purchases, or did you snatch them up the day they listed? That's a combined 81k for 3,800 in monthly rent.

I haven't been looking long (1 month maybe), but so far the best cash flow I've seen is a potential 115k for $2,300 rent in central wisconsin.

Like Scott said, you can do better.

I should have added that rent of $1900 for a 225k prop in Wisconsin is not good.

I can get $1,800-$1,900 on the duplex I just got an accepted offer on for 170k which is still not the best in terms of investment opportunities, but I'll be living in half, so the quality of life aspect and the rareness of the B+ neighborhood larger duplexes in my area sold me on it.

how are you getting a 175k purchase price from 225k? Is that just what you plan on offering? The calculator isn't accounting for the payments you will need to be making for seller financing which will drop your cash flow. 3.5% is a low estimated interest rate with the market right now. 30yr are up to 3.75+.

The r&m and capex seem high at 10% each. Vacancy seems a bit high too, you are expecting each unit to turn over once a year and take a month+ to fill?

Offer accepted at 170k. Real estate investing here we come!!!

I should clarify, actual rent on the duplex with only one unit rented would be $900/mo. Total rent for the property purely as an investment property is what I calculated in the rental calculator.

I'll have "negative" cash flow purely from an investment standpoint with only renting one side, but that's also partially my cost of living in the duplex, not really a negative cash flow property. Instead of paying the 1k/mo I pay now, I'll be paying just a few hundred in utilities for my side and to supplement cap ex/repairs.

Duplex offered 170k, rent should be for $1800/mo with tenants paying all utilities except garbage. This is our first purchase, and my analysis is based on what both sides could rent for today, but we currently plan on living in half of the duplex for several years and house hacking. The property is in a B to B+ neighborhood. 3b 1.5 bath identical sides with a family room and storage room in downstairs finished basement. There's very little work needed, mostly minor cosmetic and a new washer/dryer for the unit we'll live in.

The property is unlisted, but the sellers are actively working with the same realtor that we are. We have an offer in at 170k on their asking price of 173,900 prior to the listing going public. If it goes public I'd expect it goes under contract within 2 weeks.

Here's a link to my analysis on the BP rental property calculator.

https://www.biggerpockets.com/calculators/shared/646981/44371354-630b-4971-a478-32e910ecd23f

Also, I'd personally like to see a bit more cash flow on normal deals, as if I threw in a property manager, cash flow will drop to around $250. Since we are househacking and plan to live here for a decent period of time, I'm ok with sacrificing a bit on the numbers for quality of life.

A single credit check for pre approval on a potential mortgage should have very little impact on your credit score, maybe a few points. Also credit checks drop off your score in 12 months.

Even if you don't use the pre approval to fund the deal, it still isn't a bad idea to have one. Developing a relationship with a loan officer is going to be one of the team members you want on your real estate investment team, and meeting with one to talk real estate investing and, if that seems to start off decently, get a pre approval is a great way to start to develop that relationship, even if ultimately you don't go through them for your first purchase.

Can you get some sort of pre-approval from the investor. Some sort of letter stating that they would consider private lending financing you for deals up to $XXX,000 based on analysis of the property?

The real estate agent is likely going to want to know you have SOME way of closing or wholesaling a deal before showing you properties. Right now it sounds like you have nothing to show the realtor to give them any comfort that you aren't wasting their time.

You don't want to have the property paid off fully, as that kills your cash on cash return since you are completely unleveraged.

Honestly this deal looks no good just from what you've said:

1080 in expenses for rent from 1000-1200 a month which means with 20k down at 15-20k in repairs you are cash flowing $120 a month at best for 35-40k cash down which is only 4% cash on cash return (1440/yr for 35k invested). Sure you'll cash flow $100 more without paying a property manager, but you need to consider that $100 a month extra your fee to yourself for self managing, not part of your ROI.

"I want to make this deal work" The deal shouldn't be forced into working.