All Forum Posts by: Nathan Platter

Hi @Jason Schooley ,

See how long the seller is willing to accept interest-only payments, start with 2 years. If they agree, you can practically operate the property as your own and without having to find a large chunk of cash for the downpayment.

It all starts with asking, the worst they do is say 'no.'

@Jacob Cast ,

Be sure to scan over your City (and county) landlord laws. I know others have mentioned that already.

In Minneapolis Minnesota, even for simply renting out a room to a relative requires the owner to hang two 2 postings in the property stating "this is a rental....." and a "Who To Call" under different circumstances, the owner has to buy a rental license ($700)

Since Washington and Minnesota are both more tenant-friendly states, there are probably some similar requirements.

Hi @Jane Lu ,

To be blunt, this is not a good deal. Most investors aim to make 8%+ all cash, 13%+ if they finance it.

The busiest parts of New York tend to be difficult to invest in, so I'd consider going out of your local market if you're looking for the best returns (Memphis, Kansas City, Atlanta, Indianapolis, Milwaukee, St. Louis, Cincinnati)

The BP marketplace has lots of properties (pre- and post-rehab) for sale with good returns, and there are also companies that sell "turnkey" properties, meaning they are rehabbed and have a tenant and property management in place, all they need is someone to buy the rental.

Excited to hear about your next deal!

Hi @Anthony Warren ,

First off, thank you for your service.

When we bought our first property (owner-occupied duplex, through a realtor) we wanted to live in a nicer neighborhood. Nicer neighborhoods are more expensive, and the only cashflowing duplexes within 20 miles were in not-so-desirable parts of town. 

We changed our strategy and instead chose to make our profits from Appreciation, not cashflow. Appreciation isn't as predictable as cashflow, but then we got to live in a very desirable area. Our tenants' covered 60% PITI, meaning we paid 40% out of pocket but got to live in a great area.

Our gamble paid off and sold for 20% more than we bought 2 years prior. Those types of gains are an anomaly, but the principle still applies.

Excited to hear what you take action on!

HI @Juan Rosado ,

You still need the ARV entered because the calculator needs to help you determine what value is being added. If you have a $100k house and do $$30k of improvements, that doesn't necessarily mean the house is now worth $130k.

Many traditional homeowners spend money on their house, but add less value than the cost of improvements (e.g. adding a sauna, building a pool,...) Since you're going about this as an investor, those "moneypits" are less likely to occur if you're focused on resale value rather than "personal touches."

If you don't have access to a realtor that will give you free comps (if you're going to sell the house, offer to sell through them), then go with a combination of the Zillow, Trulia, County Tax assessments, and then go down 5% to be extra cautious.

ARV is not really "calculated," it's more 'researched' best on surrounding sales.

Excited to see the before/after pics of your rental!

Hi @Allen Carpenter ,

Assuming you are not going to owner-occupy ("househack"), two possible ways would be Seller Financing and Partnering.

(1) Upon finding an investment property that would cashflow well, submit an offer to the owner but clarify you would need them to finance the deal for a period of time, start with 2 years. Basically, that means instead of going to the bank and getting a loan, the seller would deed the property to you (you then legally own the house), you'd pay the seller a monthly payment for the loan they offered you, and then after 2 years you would either pay the seller the remaining loan balance or you get a bank loan on the house and then the bank would pay off the seller.

(2) Partnering takes a little less work the seller financing. While looking for deals, you also reach out to current investors and offer them a partnership. The conversation would be similar to, "Hey Investor, I'm looking to do my first deal. If you provide the down payment, I'll do all of the work on acquiring and operating the investment, and we split the profits 50/50." 

Excited to see how your first deal goes!

@Benjamin Benomar and @Rodney Reeves ,

Buying a duplex is a great way to start! The biggest advantage you have right now is that you're a w2 earner, and banks like stable and predictable borrowers. 

I started buying a duplex as well, and if I could choose duplex vs SF, I'd definitely go duplex-quadplex. 

Many recommend you buy a property that can have the mortgage covered by the tenant's rent payment, but I made my duplex profits from appreciation. We bought in a very nice area, with purchase prices, so our tenant's rent only covered 60% of PITI, meaning we owner-occupied and paid 40%. With higher prices come a nicer and more desirable neighborhood, so our property appreciated way faster than our surrounding zip codes.

Just another way to look at hacking your first deal.

Excited to see your first deal close!

@Russell Brazil is exactly on point, 2% rule works when the properties are cheap cheap cheap.

The rule stems from the belief that (a) half of gross rent will go towards expenses, and (b) .6-.7 of the rent goes towards the mortgage payment. 2%-1%-.7% = .3% monthly profit.

It's a very conservative formula, but just explaining why some investors stick to it.

Hi @Brendan Flannery ,

I used to work for a Turnkey company and ran these kinds of calculations all day long. If you send me a Connection request, I'll send you my Calculator. I'll do the same for anyone who does the same, too.

After running your numbers through, they look quite good; 7.7% ROI if you went all cash, 9.9% ROI if get a loan, and a 21% ROI if you refinance after hitting the $160k ROI. That is one good looking deal.

My friend, it's time to pull the trigger. Your patience has paid off. This one is a winner.

Share the before/after pics so we can celebrate your success!

Hi @Brendan Flannery ,

I used to work for a Turnkey company and ran these kinds of calculations all day long. If you send me a Connection request, I'll send you my Calculator. I'll do the same for anyone who does the same, too.

After running your numbers through, they look quite good; 7.7% ROI if you went all cash, 9.9% ROI if get a loan, and a 21% ROI if you refinance after hitting the $160k ROI. That is one good looking deal.

My friend, it's time to pull the trigger. Your patience has paid off. This one is a winner.

Share the before/after pics so we can celebrate your success!