All Forum Posts by: Josh Sterling

In the area I invest in, the price on multi-family properties has not come down nearly as much as SFRs. Combine that with the fact that many of them have landlord covered utilities and almost always lawncare/snow removal makes it very hard to justify the purchase.

I would love to get into multi family, but if the numbers don't work then I just can't do it.

Hopefully your area is better for this type of investing because it would be nice to get your first investment property and first primary residence at the same time.

Just bought the book. Looking forward to it!

Thanks Mitch,
I wouldn't have really walked away over 100 bucks, but sometimes getting just mad enough to make a threat seems to do the trick.

I closed on a FNMA property at the end of Jan and they wanted to charge a re-key fee of $99, I think. Anyways, they didn't disclose this in any documents until the Hud the day before closing, which I called bs on. I threatened to walk away from the deal...fee was removed. I thought I was just good at playing tough, but if no one else is having any luck getting it removed maybe the listing agent just covered it?

Hi John,
Royal Oak is nice, but you are going to have to pay up for that. You are also going to have to pay up for anything multi-family around here (except duplexes). If you want to stay in the northern suburbs I suggest looking into single family homes, and you are going to have to do alot of looking. That being said, I just got a 4br/1ba house in Berkley under contract for 25.4k yesterday so it can be done.

The way I came up with the 130k purchase price for your property is as follows:
-My first deal was a turnkey property that cost 40k and rents for 800/mo. I was happy with that cashflow and thought I could always do at least as good, so that is what I have set as my minimum standard. (Turns out there is also a 2% rule on bigger pockets that says gross rents/month should be 2% of your purchase price. I am new here so it is a total concidence that my numbers worked out exactly to that on my first deal)

Anyways- to get the 130k purchase price use this formula:

Monthly Rent x 50 = max purchase price

so...

$2600 x 50 = $130,000

There are several ways to break down the math but the above is the most simple.
email me if you would like to get together sometime to talk real estate.

-Josh

Hi John,
I'm in the Detroit area too. I dont invest in Detroit, I focus on the downriver area mostly. I just looked at a 4 plex today for 129k with rents of 1850/mo. Many improvements including updated seperate electric and new furnaces. Anyway, I decided not to write an offer because the numbers still didn't come close to what I can do with SFR and duplexes. I would need the price to come down to 92k to make it fit my minimum criteria.
As for your property I wouldn't be willing to pay more that 130k, and thats if all utilities were seperately metered and paid by tenants (except water).

What area are you in btw?

I just have tenants deposit into a bank account. I can then see the deposit slips online. Works great.

I read the book "How to Use Limited Liability Companies & Limited Partnerships" by Garrett Sutton after getting several recommendations for it. I found it to be very helpful breaking down the process and purposes for forming an llc. I was able to create mine in Michigan for less than $200 including the operating agreement.

After some research I have found that many states require a broker's license to form a property management company (mine does) and it takes 3 years as a full time real estate agent to get a brokers license. Is there a way around this if someone wanted to form a property management company without first spending all the time to become an agent and then a broker?

I would just use the cash out refi to purchase additional properties. I'm starting to think it would be alot easier to just find a lender that will loan 75-80% of purchase price for a new property and cover the rehab out of poctet. Do you think it will be a problem if I look at properties that need moderate rehab?