All Forum Posts by: Aaron Montague

@Bryan Payne

It does not appear to have changed:

"FHA might be just what you need. Your down payment can be as low as 3.5% of the purchase price. Available on 1-4 unit properties." from https://www.hud.gov/buying/loans

Your lender may not be willing to lend you another 3.5% note knowing that you have one already outstanding. That is a question I would ask directly to your lender. If they won't ask around the FHA lender list and see if there is one that will.

Here are a few other ways to get into investment housing for less than 20% down: 
https://www.biggerpockets.com/member-blogs/4795/35814-3-cheap-ways-into-housing

@Alicia Calderon 

This is a "do the math" question in my opinion.

What is your ROI on installing a new meter? If your bill is 50/month total for both sides, and the cost to put in a new meter is $2000 it will take 80 months to get back to even, 40 if you did not occupy.

Altough per @Mike McCarthy's suggestion if you are billing them each month and only eating about $15/month, it'll take 134 months to get back to even.  The other factors here would be actually back billing people, getting the bill post move outs, etc.

My 5 minute search makes it look like a lousy rental market.

Might be good for flips as most places seem to be 300k+

Hi @Mona Capuano - It looks like a good first stab at calculating a property :)

Per @Tim Herman above, you are missing several costs that need to go into your calculations.  

A couple things popped into my head:

Are you paying full asking at 80k?

Where did you get the ARV of 150k? Is that in line with the other properties in the neighborhood that have been renovated?

@Eric C Gunderson How about turning this into a flip instead of a rental?  If you are all in for 69k, can it be sold for 100k+ as the newest, nicest place in the area?

Get that place locked up :)

My business partner and I have 1 property under contract and are closing on it in April. We are looking at 3 other deals in the immediate future. These places are in NH and MA. Please send me a DM if you are interested in hearing more details.

We are looking for cash partners looking to invest between 20 and 100% of the cash we need to close or close/reno these deals. Numerous people have said something to the effect of "I won't invest without you putting cash in as well." We are looking to build a portfolio with partners for the long term. Bringing cash to these deals on our side is perfectly acceptable to us. Hit me up and we can talk numbers.

Current Deals:

Flip - 19% ROI projected - Cost to start ~155k
Buy and Hold 1 - 8.4% current ROI, 13% projected ($200 below market on rents) - Cost to close ~41k
Buy and Hold 2 - 10.7% ROI - Needs ~10k in work - 57k should cover purchase and reno

@Ryan Alexander The places looks good.  

How is the neighborhood? 13% ROI in a warzone is not worth the headache in my opinion.

Do you have a rate lock at 4.5% for a non-owner occupied multi-family?  We just got one at 5.25% after some serious shopping.

Your numbers look phenomenal, which is the first sign the initial analysis has some issues.

Property management is going to run at least 8%.  EVEN IF YOU WANT TO DO IT YOURSELF I recommend that you get the accounting for the property used to paying out 8-10% to "Eric C Property Management" every month.  If you want to leave the area you will appreciate this convention down the road.

I use real numbers for Cap Ex.  You have $37.50/month, which isn't enough.  An inexpensive roof, $9000, that lasts you 20 years is 37.50/month by itself.  You still need to account for water heaters, flooring, and anything else you will have to replace over the life of owning the place.  Make a complete list and then figure out how much it will be each month.

The same goes for the repairs.  Is there anything that needs fixing immediately?  I recommend at least $200/month in savings for Cap Ex + Repairs even if the place is new.

Keep at it.  Post your thoughts on the deals here. Those of us that have been at it for a while will point out our thoughts and answer further questions.