All Forum Posts by: Nathan Emmert

What avenue of real estate do you plan to follow?  If you want to buy and hold, W2s are helpful.  If you're going to fix and flip, you're probably better off going to a tech institute type place and learning a trade.  If you're going to develop from scratch, who knows... or maybe just take the realtor classes so you can do that for some part time income.  College is a HUGE financial commitment if you don't plan to directly apply what you're going to learn in a career.

Dj, I don't know what your personal situation is... but if you're young and have the time, show up at an REI event/meet up and offer your services as an intern. Take advantage of the energy, time, and lack of obligations you have to learn the industry in parallel with saving money and developing your tax returns.

Obviously you'll learn a TON reading posts and blogs here... but at the end of the day, nothing beats boots on the ground in the actual area you plan to invest.  Every market has its quirks and niches, it's important to understand yours.

@Ricardo S. 

Portfolio lenders tend to be smaller banks/credit unions... most only invest locally.  I know portfolio lenders in Ogden, UT and in Grand Rapids, MI... I've never invested in the Carolinas to look down there but a Google search and a lot of phone calls should give you all the info you need.

What makes QuickBooks superior to Wave Accounting??  Saying something is "the best" is a pretty strong statement and I'd love for you to back it up... while I'm frugal (my wife would say cheap), I don't mind spending $200 if it's really going to improve my life over what I currently have... but given how easy Wave is... and the cost of Wave, I'm finding it hard to understand where QuickBooks could be superior to be "the best"...

You absolutely need money or at the very least access to money.  If you have high credit limits or access to semi-liquid funds like a 401k you can borrow against those work in a pinch too.

There will be storms... especially if you're buying distressed properties... takes cash to weather those storms!

I'm waiting for something to go through here in January... once it does I'll post a re-introduction and 3 year history of my rentals and will tell a story FAR different than what you just suggested.

For conventional, I've heard rates in the 4.25 - 4.75% range (per Jon's statement above).

For portfolio I've seen the ranges vary from 4% - 7% dependent on amort schedules, ARMs, etc.

You found a 30 year loan at 4% on a NOO property for $28,000... where?? Few conventional go that low... heck, few portfolio go that low and they generally aren't for 30 years at 4%.

Generally in a multifamily, the LL pays for water... where's that expense?  What about landscaping and snow removal?  You aren't going to have any vacancies throughout the year?  You aren't going to have to pay to have those filled by the management company?  There's going to be no repairs to make the units rent ready?

Honestly, it's a solid deal based on the numbers assuming the rents don't include utilities (gas/electric). It hits 2% and if you really do have the financing lined up you described, you'll be in good shape. You'll be looking at about a 50% CoC return even if you assume the 50% rule for expenses.

For a first investment, it almost looks too good to be true.

We need to work on your math then.

$65,000 financed for 30 years at 5.75% = P&I of $379.32 a month.

If income is $1,100 a month... after 50% expenses you're at $550 a month... subtracting P&I is 170.68 a month.

Unless there are a bunch of utilities tied into this deal, sounds like an absolute no brainer.

Also, some of your numbers make no sense.  You say the building is 20 - 30 years old but that the A/Cs were new in 1972 which is over 40 years ago.

Make sure you have the cash reserves for any surprises to stabilize units... but 100% financing on units that cash flow (at or near 2%) is a great deal IMO.

I use wave accounting... free and cloud based, also a mobile app if you want to use it.  I did a post a week or two back about how I had set up the software to support multiple properties (I have 4, 11 doors, but only track by the property).