All Forum Posts by: Alan Brown

@Anthony Sorrentino, yah, I'd go with @Bill Plymouth's idea... or, depending on prices in Hudson, you might be able to house hack on a multi, the best possible thing, I think, for a newbie investor... get an FHA loan (must live in the property for at least a year) on something under $300k with a 3.5% down payment, maybe a duplex or even a single family home... if its a SF, you can rent out bedrooms, you might be able to live for free, and then use it for equity to move on to bigger and better things. a couple of years of appreciation in the Boston area my add nicely to your cash. I just realized that I'm getting about 70% annual return on my initial $50k I put down on a 4 plex, when I figure in appreciation, net cash flow and mortgage paydown!!... other than that, find someone you trust, preferably in an area near you, and partner with them; you might get a much better return on your cash, and learn a boatload in the meantime. THAT would be the best return you could ever get!

Good on ya for getting going!

@Josiah Pisel or @Matt Conner, what are you seeing for percentages on appreciation in Big Sky, or for Bozeman, for that matter?

thanks!  

@Sheldon Moore, on a multi?  I got all excited about Navy Federal Credit Union, of which we are members, and it turned out they only do Single Family...

yah fantastic job, @Kyle McCorkel!  way to hang in there... I'll bet there were times you were wringing your hands and wondering if you were going to get through it!  

and @Christine Z., who the heck puts a giant 'H' in their turquoise shower?  in ANY era?  hilarious

I wondered about your 80% LTV cash out loan.. was that a local lender? right now I'm only finding 70% LTV on a cash out, which sort of sucks...

Also, do you know, on the appraisal, did they use comps or income approach to come up with value?  or a ccombination?   I bet there werent' many comps around at $300k on a triplex, if you're saying rents have very recently gone up dramatically.  reason I ask is because I"ve had lenders tell me that they don't go off cap rates on anything less than a 5 plex... yet I, and a lot of the investors I know, always use cap rates in order to compare apples to apples when buying, and I"m selling some 4plexes in Kansas City that the comps only show $270k but the income easily points to the low $300's.

Thanks in advance!

@Michael Rutkowski, fantastic!! Thanks for bringing up hemp!  I have been learning about the myriad uses of this plant, and it’s ridiculous political kneecapping Since the dreaded reefer madness era, for 20 years!  I’ve been thinking a lot about it lately and hoping that now is it’s time... and I’d like to be part of that investment... where can I learn more about it? 

 At the tail end of some radio broadcast, I recently thought I heard that it can produce $150k per acre?  For the oil maybe?  Did I dream that??

@Michelle VanDyken, what do you know about it?

Thanks in advance

Nice, @Vince Leydet, some excellent deals you're doing! 

Hmmm sorry, started this once, and it went blank so I don't know if this is the second one I'm sending!!

Anyway, Im also working in Pittsfield and always like to compare notes.  If you might want to do a meet up at some point, let me know, and if you know others, landlords, investors that like that idea tell them.

cheers

Wow you are rockin!  congrats on your new passion...

I used to play music up in Conrad and Shelby and Havre about 35 years ago (!), and love that area and especially the people!

My question is how Conrad is doing these days?  I have no idea, but  is it growing and does it have a good long term prognosis?  That would be a good thing to figure in... because if it's declining, and if the young folks are moveing to bigger towns cities, etc, sometimes it can be a gamble in the long term hold idea.  A lot of American small towns are dwindling...

 Whereas, if you've got buyers for the flips, you may want to cash in on that, and potentially look at other places that do have good long term economies and are attracting millenials or short term rental people for the buy and hold...

Also, there seem to be some very good advantages to being a 'real estate professional' I think it's called:  you have to work 750 hours per year on your real estate business (which you probably do, working on the houses--physically, and if you're managing them, marketing, leasing etc), and check with your accountant, but I think you get some pretty good tax advantages...

DEFINITELY go to the meet up in Havre...  you can learn so much, and it's much easier and faster to convey information verbally instead of typing!!  And listen to EVERY BP podcast!!  I"m not kidding, they cover everything at one point or another.  Ive been doing this a long time, and learn something new pretty much every podcast sometimes earthshattering stuff!... So while you're making those long montana drives, 0R PAINTING! listen to as much as you can

When you're figuring your cash flow, BE RUTHLESS!  I"m too optimistic, so my wife holds my feet to fire... Figure 10% of gross income for repairs and maintenance, and create that reserve account for that.  Talk to folks at meetups, other landlords in Conrad, shelby, and Havre and find out how long they're going between renters... and how much you spend in between renters on 'make ready'-- cleaning, painting, etc... That should be additional reserve;  I think I figurre 10% vacancy, that includes lease up fees, and 'make ready' costs...

I"ll bet one good thing about Conrad is tenants probably stay long in a nice place!!  that's good as Gold!

If there are any decent property managers there, Bug them for information, and find out how much they charge to manage properties (should be between 7% and 10%) and how much a lease up fee is... Figure this into your numbers, and if you manage it yourself, pay that to yourself, and THEN figure cashflow... because someday you may decide you don't want to manage them anymore, especially if they're not in your town.

 Do you pay any of the utilities?  You have to be crazy analytical on that stuff... I find that I pretty much spend 45% of my gross income on all the expenses, BEFORE mortgage payments... 

That $150 may go away quickly, when you figure all that in, but If the market is appreciating really well, like better than 5%- 8%, losing a little monthly is worth it in the long run, if your regular income can easily cover it.

Good luck!

Congratulations on going for it!!  

Still keep in mind it Might be hard for you to qualify as a student... I admire your drive, but if you're trying to get bank financing, don't get too excited until you get qualified... do you have parents or anyone to help you qualify?    Usually you have to show W2's from a job for a couple of years, or much shorter if you get out of school and get a job that's directly related to you field of study 

Also if the 4 plex cash flows better, that might be easier for you to qualify for, because your debt to income level will play into how you qualify... check with a lender.  I like 4 plexes, and I think if it cash flows while your living there and getting free rent, its gonna be really awesome once you get the next one!  

Be prepared for the lender to want to be convinced that you're ready to self manage your property;  sometimes they want proof that you have some experience.  And speaking of which, it's good to figure in management into your budget even if you plan on managing it yourself, and then pay yourself for management

  Will you have to move away when you get a job out of school?  Def need excellent management so it's not a long distance nightmare if you're trying to manage the property from afar while trying to focus on a new job... Most folks would say when you're buying out of State, your first search is to make sure you have access to excellent management, and since you may be out of state yourself you might want to approach it as such.

just some thoughts.

Good luck!

@Account Closed, I would love to connect witchu;  I think about investing in Florida A LOT!  especially in Winter... Where is your town near?  Someone told me Englewood might be good.

@Eric Hrlbock and @J.R. Coffin that sounds pretty great.  Whenever I go to Poughkeepsie I'm never quite sure where to start!   Will keep in touch, and PM y'all.  On vaca from this weekend through the next one, but maybe after that! 

thanks!