All Forum Posts by: Olu Oguntoyinbo

@Olu Oguntoyinbo I paid cash for a SFH almost 4 years ago at $99K. I put about $40K into it and then the pandemic hit. It was rented for $1600 and cash flowing about $900. I ended up refinancing it for $130K to buy another property. After prices appreciated in my area with the pandemic it is now worth $320K. With the $130K mortgage it now only cash flows $175/month.

My average cash flow for my whole portfolio of 25 properties is only about $325/month. This includes all the rest ranging from 2-8 units.

Anything you have to finance at today’s interest rates will cash flow less than it would with a lower rate. I can’t advise you to buy something based on the fact that interest rates are going to drop and you can refinance to get a better cash flow because we don’t know that but they have dropped some over the past couple of weeks.

While I still look at SFHs I prefer multi family.

Hello Olu,

Certainly a lot of decisions to be made at this point. The biggest thing is to look at is the overall cash flow and not just the P&I payment.

Especially in Texas, you will want to look at the property taxes and the insurance costs. With my clients down there I would suggest looking at something in the 2-4 unit space and prepare to put down about 25%-30% with closing costs and everything.

Good luck!

@Olu Oguntoyinbo thanks for the post.  Always great to hear from someone purchasing in Texas.  

Now, what is the "right" property to purchase?  This is always open for debate but generally speaking buying a 3br 2ba home that is BELOW the median price point on a single family home is a good place to start.  This is where the majority of the working class renters will choose a property.   And because more people are competing for homes in that range, the rent % is better.  Actually, the LOWER the value the better the % of rent becomes.  Meaning, two $250k homes will rent better than one $500k home.  So, would a $50k home rent even better?  Yes...but now your renter is a little different and lending gets a little harder.  So, somewhere below that median price point will work well...but not too far below.  If you are targeting 2-4 unit properties just treat each unit in that one single family home price point.  So, a $500 duplex is great.  A $1million duplex isn't great.

Absolutely lean on your realtor for guidance in this area.  

Hope all of that makes sense.  Thanks!

Hi Olu, I'm a big fan of small multifamilies. It's a good way to maximize cash flow. Otherwise, SFH rentals may get you a couple of hundred in cashflow each month but you do get the appreciation. Will be happy to connect, I'm in Houston and own a triplex here that I BRRRR'd