All Forum Posts by: Michael Moikeha

Most people in this industry understand that money talks and speedy money talks louder! I had a wholesaler who had a deal with another investor who was dragging his feet. We offered him more for the purchase, which in turn meant he had leverage to go back to the first guy and say hurry up or you will lose it.

In this instance, it became a scenario where he either would burn the first guy and hurt that relationship or tell us that he had to stick with the first and he would talk to us sooner next time and give us a chance.

What are some of the details on the deal? Purchase price? Development costs? Time investment? ARV?

I started by studying and reading info here. Next step which should be done immediately is finding local REI groups and networking with others who are working in the area.

Lastly, I started sending letters to home owners. I would start this last step before understand everything about investing, BECAUSE YOU WILL NEVER UNDERSTAND EVERYTHING!

This is the only question that you have to ask yourself: Do you want to tie your own money up, or do you want to leverage someone else's money and use your own for your own purposes?

OR, you get 5,000 rentals at $200 cashflow a month.

Start paying off your highest rated mortgages, then your cashflow per property will be closer to $500 - $1000, and at that point, you can have a 1,000 units cash flowing at $1,000 and there you go!

The biggest issue that I see here is that you called it $400 cashflow, when you don't have $400 cashflow, but $400 above mortgage. When you calculate for Vacancies, Repairs, and Capital Expenses, 5%, 5%, and 10% (of rental expenses), you will not see that much cash flow. 

One month without rent will put you back at least $900 for mortgage and utilities. If you need to repair the roof, you will want to have $6000 for that, but instead of it coming out of your pocket, you want it coming out of the money from the rental itself.

Is your repair budget $150,000?

I would spell out the numbers a little more as that is what is more important to a lender than the facts you wrote out. Post a breakdown of purchase, cost of purchase, reno costs inline with what the renovations will be, and then seller costs with ARV. Then lastly, I would mention providing comps to potential investors along with the flip report you mentioned.

Good luck!

Just looking at this, I am not seeing a positive cash flowing property. Before looking at funding, you need to crunch your numbers and see if someone would loan on this deal. 

Being new and working on your first deal, you may be able to find a JV partner who would be willing to split 60/40, where he gets the larger percentage because he will be looking over your shoulder making sure everything is going as planned. If you want to get in and get started without using any of your own money, then it is worth it even though you don't get much out of it because you do get the experience which is great!

I don't think you are too ambitious with your plans. I have a rental that a property management company said they could only get $2400 MAX out of. So, we listed it ourselves for $2700 and it rented! Tenants are great and we have a great relationship. Be a good landlord, expect and hold your tenants to high standards, and you should be just fine.