All Forum Posts by: Nikki Kofkin

Hey everyone, I posted this in the general forum but wanted some local expertise as well. I've been in an analysis paralysis for over a year, but I'm finally ready to make my first investment. The first of two questions I have is how does my investment strategy sounds to more experienced investors? Here's the lowdown on my situation:

I've acquired a private loan for 200k cash at 1% interest for 30 years. I don't think I could even qualify for any traditional financing, as I'm 23 years old and got my real estate license about seven months ago, and I've yet to generate a steady income, but on the plus side I do have an immaculate credit score...Anyway, I plan on buying a specific condo at a judicial sale for under market value in Chicago this month. Without going into too much detail, I hope to get at least $20k in equity because I won't bid any higher than that margin and that leaves some wiggle room for rehab costs (which appear to be minimal because I've seen interior photos). The market rent is about $1800 and all of this is based on my extensive analysis of similar units in the same building in the past year. HOA is around $200/mo and taxes around $3500/yr, not sure about other expenses though so I factored in 1% of the EMV. In my mind it's a good investment since I have no money down, and a gross annual ROI of $21600, with yearly expenses estimated around $8000 for a net profit of $13600. Do you agree?

The second question I have is more hypothetical and involves an explanation on leverage. Let's say I saved up $200k from a job and could qualify for traditional lending. Would my initial strategy still be a good idea to invest all $200k cash in one condo, or would it be better to allocate the $200k among several properties with 10-20% down leveraging "other people's money?" I keep seeing scenarios on leveraging money, but they don't always factor in expenses like PITI. Thanks for the advice in advance!

@Chris LumLee I appreciate your advice, and you're definitely right. I will research what other expenses I might take on as well. For my hypothetical, I meant if the $200k was mine and I could distribute that into multiple properties with 10-20% down, would that be a better ROI? In my mind, the gross ROI would be less (due to PITI primarily) and the cash on cash ROI would be greater...but I don't have a very good understanding of leverage.

@John Weidner, as far as the MLS goes, I comb the MLS daily and I have to respectfully disagree since those properties are generally at or around market value and I want to buy under market value. FSBO isn't a bad idea though, I haven't really looked into that. Generally when I run comps of FSBO's they seem to be overpriced, but maybe I just don't find the good FSBO's quick enough. I've stayed away from hard money lenders because of high interest rates, but maybe that's something I will consider. Thank you for your input!

Hey everyone, I've been in an analysis paralysis for over a year, but I'm finally ready to make my first investment. The first of two questions I have is how does my investment strategy sounds to more experienced investors? Here's the lowdown on my situation:

I've acquired a private loan for 200k cash at 1% interest for 30 years. I don't think I could even qualify for any traditional financing, as I'm 23 years old and got my real estate license about seven months ago, and I've yet to generate a steady income, but on the plus side I do have an immaculate credit score...Anyway, I plan on buying a condo at a judicial sale in Chicago this month. Without going into too much detail, I hope to get at least $20k in instant equity because I won't bid any higher than that margin and assuming minimal rehab costs because I've seen interior photos. The market rent is about $1800, all of this based on my extensive analysis of similar units in the same building in the past year. HOA is around $200/mo and taxes around $3500/yr.

The second question I have is more hypothetical and involves an explanation on leverage. Let's say I saved up this $200k from a job and could qualify for traditional lending. Would my initial strategy still be a good idea to invest all $200k cash in this one condo, or would it be better to allocate the $200k leveraging "other people's money?" I keep seeing scenarios on leveraging money, but they don't always factor in expenses like PITI. Thanks for the advice in advance!