All Forum Posts by: Philip Williams

@Ben Leybovich  well thank you for the advise but taking suggestions without sound reasoning isn't exactly a smart decision in any situation. Not saying I won't or am not planning on it but if your going to say slow down at least day why lol. 

@Gavin McMorrow@Gautam S. @Joshua Dorkin 

I'll try not to make this response to long lol, but the condo and the first three deals were found off the mls. I had never thought about finding deals any other way. After listening to all of the podcasts it struck me that there are other methods of finding deals. The first deal I found was the 6 unit I found it off of Craigslist under real estate for sale. The next three building I got a lead from one of my workers. I tell everyone I work with in my investing area to keep an eye out for properties, that includes contractors, property manager, plumbers etc.....I let them know what I am looking for and if I purchase a property based off there lead they will receive a referral fee from me. So that covers how I found the deals. 

Here are just some quick numbers the 6 unit was listed for 125k 2-2bd 2-1bd 2 studios. The total gross rents are 3150, I can force a little bit of equity in the form of raising rents to include laundry facilities. There are three garages on the property the former owner used for storage, I can rent these out potentially to tenants, paint change out carpets etc...As for as rehab costs this one doesn't need any immediately. It is fully rented out so the first thing that will be done will be hall paint and carpets. Then as tenants leases expire we will go in and clean up the units, new appliances if needed. Carpet might get ripped up and some type of hardwood put down etc. Oh and we negotiated the price to 110k, and are putting down approx 18% which comes out to 20k and it is owner financed 5 year arm with an option to renew and a 7% interest rate. 

The four unit was listed for 70k they are all spacious one bedrooms rented for 425ea. This was undervalued in my opinion and I estimate the actual value as around 88k. I tried negotiating them down and they weren't willing to budge as they had a mortgage on the property still. Instead of trying to shave a few more thousand off I decided it was wiser to lock up the deal before they decided they should actually list it with a realtor which they definitely should have. This also doesn't require any rehab 3 units are currently rented out this was a family owned investment for the last 15 years so they took much better care of there places than the average owner. They actually live next door to the property.

Hope this story will maybe help inspire someone to take that first step, I was pretty frustrated with the banks before finding the podcasts. They really lit a fire under me to not just walk in get denied then shrug and wait a couple more years can't thank @Joshua Dorkin and brandon enough for the info I have learned!

Hey how are you, maybe I can help a big first some banks do loans that small Citibank for one. I'm not sure if there in your area but they would do an investment loan that small. Second I think your numbers are way to low on the annual operating expenses. 2000 is hardly enough to pay for things such as maintenance on the property such as grass snow. Annual maintenance like furnaces water heaters etc...You should be putting away at least a hundred a month for those big tickets purchases. So that's 1200 a year plus the lawn and snow might run you another say 60 a month so that's 1920 a year plus taxes of just throwing a number out there 1500 that's 3420. Add in your property management if you are using one your fees to clean up paint etc between tenants your noi will be much lower than you actually realize. Hope this helped! 

Thanks I intend to keep it moving appreciate everyone reading and commenting!

So I decided to give a shout out to bigger pockets. I decided to start investing in real estate 18 months ago at the time I owned 1 condo that had been in the family for years. It was in a nice neighborhood was payed off and cash flowed about 100 a month. I decided moving into multi family was something that I was interested in, over the next year I sold the condo and bought 3 duplexes with a partner who also had very little experience in real estate.

We were moving along but very slowly, I had no idea how to finance any more deals. I had never heard of creative financing and couldn't get a bank to give us anything due to the lack of company history and our debt to income ratios being high. We had no debt besides mortgages but banks wouldn't budge. 

Everything changed about a month ago when I found bigger pockets. I decided to educate myself and started searching for info. I had never read a real estate book or listened to a podcast as of a month ago. Then I found the bigger pockets podcast which led me to the website. I couldn't get enough I listened to the podcast constantly four sometimes five episodes a day. I read every article I could find made a page and started searching alternative methods of funding. 

I currently have four closings set up in the next 2 months. A six unit building owner financed closing 7/15, a four unit closing 8/1 and two duplexes one on 8/7 and the other 8/15. None of this would have been possible without the knowledge I gained on the podcast and on the forums. It took me 16 months to amass 6 units without bigger pockets and 2 months to amass 14 more with it. Just wanted to say thanks to the everyone, those I met at the Chicago REA and those I interact with online. I will continue to update this thread if anyone is interested and post the exact numbers from the individual buildings.

hey jerry from what i know about taxes which admittedly isn't a lot....you can depreciate them in half if you claim it immediately. However if you depreciate them over time you can get the full amount. You should talk to a CPA they are invaluable for the knowledge of the tax laws! Hope this helped. 

Hey carnell welcome to the community! If you haven't yet checked out the podcasts you should start there. They are invaluable with the information they provide. 

Great post @Marcia Maynard I have never heard of these water alarms but the concept makes perfect sense. Especially when it is a multi family unit, even if the tenant leaves and the alarm goes off while they are gone. Another unit in the building would hear the alarm and hopefully notify the property manager or owner. Especially if they have the alarm in there own units and know exactly what it is. I would love a tenant calling me to tell me a water alarm is going off next to them but the tenant isn't home! Great advise :)

Hi bob,

So here are my thoughts, one you are correct in your estimation of it being a bridge to far for a short sale. While they can try they are 75k underwater from what you have said. Second you mentioned the ARV in the area is 125k? Please don't tell me with those numbers they actually need to make repairs to the house?? A couple things you might want to ask your prospective clients. One do they have any cash to bring to the table, with them so far underwater that may be there only option. Perhaps listing for a shortsale at 125 then bringing 25 to the table also? These ideas seem far fetched to me but you did ask lol. My advise just walk away.....there will be better offers with more equity or heck any equity that you can pursue in the future. I hope this was helpful say hey back or shoot me a vote :)

Great advise! I have never heard of that facebook page before but I am definitely going to check it out, thanks for the tip!