All Forum Posts by: Nathan Grabau

Hi Kristy! I am a long distance investor that lives in Colorado but is invested in the Ames Iowa area. You can get a cash flowing 2-5 unit property easily in the Ames area for your 250k budget. I like Ames because it is a cash flowing market but it not experiencing population decreases like many other cashflow markets. My realtor there is an investor himself with about 100 doors and has a management company that manages all of my rentals there. If you would like me to connect you with him please feel free to send me a DM. 

I would focus on the fact that the lease exists as an agreement between you and your tenant. If you guys can both come to a solution that you are happy with, it is much better than having her leave angry. You're on the right track. Also kuddos to you for choosing not to be an ******* when many others would be. 

Do you have individual leases with the students or one lease for all 3? If it is one for all 3, they need to figure it out themselves. If it is separate leases, I would try to have them work it out, but ultimately let them know that if they can't they will have to split it. In my mind, the same way when they sign the lease they are agreeing to pay the rent for the term of the lease, they are also taking on utilities for the term of the lease. Your lease probably has a provision saying they need to handle utilities while they are responsible for the premise, regardless of them residing there or not.  

Hi @Hana D. I have been able to invest in the Ames, Iowa area and experience 8+% CoC returns and 20%+ overall returns. I am happy with the market because it has pretty solid cash flow, a stable not declining economy and population, and really high quality tenants. I have done it all long distance, buying my last 2 properties, a duplex and a 6-plex, sight unseen with the help of my realtor who is also an investor and property manager. If you send me a message I can get you in touch with him!

I realize this may not be the answer you are looking for, but I think there are safer bets to make than the supply chains getting better. Everything I have heard over the past few month, as a roofing contractor, is they are getting worse. We have gone from a few weeks to get material for a school sized roof to now being out 11 months. We are also being charged off of the delivery date pricing not the order date pricing. While I have only been in the industry for 5 years now, people who are 30+ year industry veterans are saying this is the worse they have seen it.

I think there are trends that people are not seeing to take advantage of, and it could be the darkest before the dawn moment, but it seems like there is no relief in sight for construction costs. 

Congrats on getting the bug! I would encourage you to compare the Central Iowa(Ames/ story county) to what you are seeing in Memphis. My realtor there is an investor himself in the area and has a management company that has made life very easy for me! I have now bought a triplex, duplex, and six plex with him and now we are working on a couple BRRRR deals. Buying turn key from a company that does it is nice, but it means they make the elbow grease money instead of you! Feel free to DM me and I can get you in touch with the Ames team!

There are markets where you can get better cash on cash returns than this. It depends on your goals for investing. Do you need monthly income today or would you prefer to have more income later? I am invested in the Ames Iowa area and have been very happy with the mix of 8-12% CoC returns with 20-30% overall returns(mortgage paydown and appreciation). If you would like a more balanced market please feel free to send me a PM and I can get you(or anyone else) in contact with my realtor who is also a property manager and investor in Ames.

If you can get positive cashflow in markets that people are moving to, it is okay to delay gratification until future years when you will be able to raise rent, sell, and/ or cash out refi the property. 

I would pick B. David Greene explained it brilliantly on Sunday's Seeing Green BP Podcast Episode where he said that cashflow prevents us from losing a property and appreciation builds wealth. 

It is weird to think that 40 years are back in play! Who is the lender if you don't mind me asking. This does not seem like too bad of a deal to me depending on your closing costs. The rate is a little high compared to what I am seeing for 30's, but to get a 40 year term that does not seem too bad. Cash out rates are also higher than regular refi rates. I would ask about a 30 year rate and run it through a mortgage calculator and look at the amortization schedule. Just to put numbers to it:

Per 100k a 40 year fixed loan at 6.99- $620- first month: 38 to principal and 582 to interest

Per 100k a 30 year fixed loan at 6.99- $665- first month: 82 to principal and 582 to interest

Per 100k a 30 year fixed loan at 6.25- $616- first month: 95 to principal and 520 to interest

As you take a 30 year loan out to 40 years you experience diminishing returns. Even if it is interest only, you are only saving $82 and are likely paying a higher rate for an interest only period. 

You should pretty easily be able to get 140k out on a cash out refi. Send me a DM and I can refer you to a couple lenders I have worked with if you get the run around.