All Forum Posts by: Spencer Abeyta

What size are the units? From the rent range, it sounds like they could be 2 bed 1 bath units. It is also important to calculate how soon you are able to raise the rents without violating leases that are currently in place. 

It looks very nice on the outside! I am a huge fan of having a bright door against the normal color of the house. What area in Colorado Springs did you find this deal?

Matthew Pastore because of your experience with military and real estate, I was wondering if you have noticed if people in the military like living in MF is SF when they are transferred to different bases? I know Fountain has a military renting presence and it seems to be more on the SF side.

If you have been an agent in your area I would hope you have developed some sort of network or know people that are doing what you want to be doing. Talk to them and get to know them better. Remember most people are much more willing to mentor you if you can bring value to them as well. I would recommend learning how to run numbers on a flip and then take that property to a flipper in the area and ask if you can learn about flipping using the property as a way to bring value to them.

If you do your research and the numbers work out then it is possible to cashflow on 3% down. Money is made on the purchase price. Also there are certain loans like a VA or FHA loan that require very low money down. These are owner occupied loans of course so it does depend if you are willing to move into the property. If not, putting that low amount down will require an MIP payment along with just the normal mortgage payment.

If you follow the BRRRR strategy you buy the property at a good price where the numbers make sense. Then you rehab it, and force appreciation, ie increase the value of the house (this creates equity when you refinance). Rent out the fixed up property to a renter to start recouping some of your money. Refinance, this step will allow you to pull money out of the property assuming your rehab increased the value. You can use the money you pulled out of the property to use as a down payment for the next property. Repeat :)

The tenants in a B class neighborhood are more likely to be more owner friendly, ie paying rent on time, treating the property well, and having less issues. If you don't mind dealing with tenant issues then by all means stay in the C range of properties as they tend to cash flow better then B class areas. Also in my opinion B class areas appreciate at higher rates than C class so if you are looking to hold onto the property for awhile this could make you more money in the long run.

Start saving up as much money as you possibly can in the upcoming months. Get in contact with a local realtor that works with investors and find a price range you can afford to put a down payment on and have strong enough credit to qualify for a loan on. I would recommend looking for a 2-4 unit multifamily and living in one of the units. This helps you get a loan because the property will be 'owner occupied' and this also allows you to keep an eye on the property. Live rent free as the other units pay for your rent and as tenants move out rehab their units to increase the value of the property and the allowable amount of rent you can charge. This is essentially house hacking as the BP Community refers to it.

Because electricity and gas are monthly expenses they need to be multiplied by 12 to come to the annual amount.

So $200 electric should be $2400 and $500 gas should be $6000 total for year 1.

I would also highly recommend that you transfer the cost of both electric and gas onto the tenants as this would decrease your annual expenses. Plus it is shown that when tenants have to pay utilities their usage actually decreases.

Thank you @Ryan Sanders that does help. I would hope maybe the "shell" of the house would be on the lower end near the $100 a square foot you mentioned.

@Bill S. Why would it cost more to build a smaller house than a larger one? 

I was wondering what the construction costs per square foot are in Colorado Springs. Would there be a large difference in price for a two story vs a rancher? I'm looking in terms of a 1000 to 1500 square foot house. I was also wondering what the cost was to have the "shell" of the house built and then finish the interior myself. Thanks :)