All Forum Posts by: Ranga Ramanathan

Hello All, thanks for reading. Closing in on a 3/1 SFR, with unpermitted attic finishing that adds about 400 sqft ( sqft on record is 780). Work appears professional, getting good deal and hitting my rental numbers, slightly over 1% rule for rent, good blue collar working neighborhood, solid C area. What are the risks? I plan to leave thr home as is no major renos, but would at some point add a bath room in attic area to make a nice mastet suit for value add. Thanks for your suggestions. Ranga

Originally posted by @Marc-Antoine Tessier:

@Ranga Ramanathan

What I'm talking about is only 1 unit out of the apartment bulding that is for sale. The reasoning behind my question was to know if it was worth to buy that unit in the complex and then rent it out.

Hope that clarifies my question!!

 Hello Marc, that is what i assumed when answering your question. Good Luck

Are you talking apartment like condos or multifamily apartment building, considering you are newbie I am going to assume you are talking about apartment condos. You should really learn about this investment space there are lot of forum posts and blogs about this topic. There are some advantages and lot of pitfalls, mainly like HOA and their whims. Most HOAs have a rent to owner occupancy ratio you have to mindful of, in the US if a apartment community has lot of rental investment the value may drop due to eligibility of govt backed loans. As far as I have seen, in my area the HOA cost dips heavily into my cash flow when analyzing apartments. You should do your own math to figure this out. Good luck.

Hello @Elizabeth D., what a positive attitude you have, I have heard lot of people in BP podcast say they were fortunate enough to lose their job!!! you could be one of them in future. I think every real estate investor wants to be a full time guy because this is very enjoyable, there are lot of pros to being full time, here are some of the cons you should address 

1) Finding the deals - As long as you are a passive investor if the math works even a 100$ cash flow a month is okay on the side, you can buy your properties from MLS but when u are a full time investor you need a lot more cash flow and lot better deals.

2) Sourcing Finance - Banks look for W2s when you ask for money, you should be lot more creative and risky as a full time professional to source funding.

3) Market Cycle and Current Market - Markets will cycle and as much as I know most areas are turning into sellers market with low supplies, how do you tackle that?

It all depends upon our personal situation and where you are in your life, I don't mean to discourage you with my concerns above, just a full analysis of what is best should work in your favor whatever decision you make, good luck.

Hello @Danarsha Johnson, I hope you have done your research on investment property, most importantly the math behind buying this rental property. If you are going for a loan typically the banks require 20% Loan to Value which means for your 10K + Closing cost, you can buy a 50K property. How expensive of a house you can buy really depends upon the rent you receive, the expenses to hold the house and the cash flow you expect. You should back in to the home value based on your expectation, there are number of online calculators including ones in bigger pockets where you can do this. As far as paying off the property again it is a personal preference, (obviously your loan principal is being paid off monthly) there are two schools of thoughts 1) Pay off the loan, no more loan servicing and more of the rent in your pocket 2) Pay off the first loan, means you are not saving for a down payment on second property. What is good for you is  based on the math and personal preference. As long as you are financially strong and your first property is performing well you can get a bank loan for up to 10 properties under your name!!! or you can establish a relationship with commercial loan dept of a bank then the possibilities are endless.

In my case my ROI is much higher with loan than without the loan and I also believe having a 4% / 30 year fixed loan itself is a big value (imagine I will be paying the same mortgage payment in 2045 as today).

Good luck

Hello All (Experienced Multifamily investors in particular) I am a buy and hold single family investor (so far) on a scale up mode, I am close to buying small multifamily in Chicago suburbs, I have a couple of deals under consideration. I am trying to gain some experience and build credibility with smaller multifamily so I can graduate to larger properties. I have educated myself well and good at crunching numbers, but I lack the procedural experience that comes with deal making when it comes to multifamily.   Are there experienced investors willing to partner or guide me through, if you are experienced in owning multifamily RE, please contact me and we can discuss how I can make it worth your while.

Thanks for your help,

Ranga

@Percy N. @Will Yee thanks for the clarification, thats so simple and very helpful.

Hello All, i am in the market for a small multifamily, this will be the first time for me with 5+ unit, so far i have been a buy and hold SFM investor. When giving an offer and getting a property under contract should it come from the LLC i want to put this property into or can i have it under my name and transfer it to LLC before the financial transaction happens? I dont have an LLC registered yet wondering if that should be the first thing i should be doing. i have searched this topic but unable to find direct answer can one of the fellow investors kindly provide answer or point me towards this topic in other forums. thanks Ranga

I know some of the home owners in my neighborhood, they want to sell the home only if they get the asking price or else they would rather unlist their home, in fact two of my neighbors did the same, one of my neighbors listed her home for 6 months and never dropped the price or entertained a lower offer!!! Many people in Lake Zurich are well settled they are not desperate to sell their home, does not mean if you stick out long enough you wont find a good deal, otherwise great neighborhoods and great schools. Good luck.

The bigger pockets calculators are pretty comprehensive.  Depending upon property taxes, maintenance, vacancy etc  and upfront repair charges, returns for $1600 ($800x2) rent on a 150K house can vanish fast.  Get the cost of improvements and repairs evaluated by an independent contractors. Good luck