All Forum Posts by: William Sing

I still do this! I have two companies to run and run my small portfolio. Once it gets above 10 units I think I will switch to having a PM since at that point I don't think I could handle all of the administrative tasks and lease-ups. 

Hey Guille, congrats on starting the education phase of your journey! You never stop learning!

As for planning to finance 100% for 22 years and creating an average, every market is going to be different. The cost of financing in a metro city vs a rural city will be incredibly different. This will alter your strategy and how much equity over the years you can pull out of the properties so it needs to be tailored to the market that you are targeting. Also, know that you can dive into a bunch of other things as well and it is not very often that your plan goes according to plan. 

If you are trying to get a rough estimate and be on the conservative side. Most banks require a 25% down on any investment property. I'd take a look at what the cost of small multifamily costs and go from there to retroactively see what that is. 

For Example:

- 1st year: Duplex @ 500k (500 x .25=125k). 125k Down Payment Needed. 

- 2nd year: Duplex @ 500k w/ 125k Down Payment. 

- 3rd year: Quadplex @ 800k w/ 200k Down Payment

You get the picture. These will usually start having more of a snowball effect, but it will take A LOT to go at that rate at that price point which is closer to my market. This may be completely different for you and also change down payment-wise if you are owner occupying (you can get down to 3.5%). From there you can create a couple different scenarios to see what you might need for each for financing everything. 

This does not account for market fluxations or the rising/dropping of prices. 

Hope that helps!

Hey Timothy! This sounds like you have a lot of options. 

Sounds like seller financing might be a good option for you if you want to take over the property eventually. You could set it up so you take over the property management-wise and then provide a stable income to the seller. You can then set up a balloon payment 5-10 years down the line (where you and the seller have the option to sell the property entirely and move to conventional financing). This would create a win-win for you two and delay a lot of capital gains tax until you buy it outright. 

If you still want to have them on as a partner, talk to an attorney about creating an operating agreement. Each state is a bit different in how they have these rules play out and they can give you pointers on what needs to be included. If you do refinance it, check with a lender to make sure they would be able to do that. A lot of times you are going to run into issues with refinancing into an LLC if it is in a personal name. Usually, you can refinance in the personal name (of the seller in this case) and then put it into an LLC. Just know that this might trigger a due on sales clause.

As for your second question. This is completely subjective. I know this isn't super helpful, but a 50/50 might work for now you can always add clauses into the operating agreement to see if things need to be changed. I'd take a look at how many hours monthly/annually you'd need to put into making this agreement work and double it. Humans are notorious for underestimating our abilities. You can then do a per hour to see how much you'd be putting in "sweat equity wise". You could bring a larger amount down to increase your ownership/profit share from it but that is a question of how much you want to put in and get out of it. 

Hope this helps!

I do! I actually worked with @Julee Felsman who was great. She helped me get into a duplex.

The square footage of the building is going to be much better. The cost of a one-story building vs a two-story building will be different even on the same lot. For costs in Portland, OR I have seen costs be between $225-250/sqft on the lower end to up to $350-375/sqft and they only do it by the size of the building sqft. The lots determine how big you can build for the most part. Hope that helps!

I think the contractor is just being a bit more transparent with everything pricing-wise. With investors, they are usually looking for a breakdown of everything, which is frankly not how most contractors work since they provide the overall price usually with no breakdown. Overhead costs are usually more built into the price but this situation isn't extremely uncommon. I know builders who charge 20-30% and that is on a much larger scale. This usually helps with pre-establish pricing if something pops up that is an issue. Either way, you are paying the same and it doesn't really matter how it is broken down. 

I personally prefer the models where it is the first investor who responds gets it since it evens out the playing field and having a bidding war where clients may feel upset might not be the best long-term relationship building. That is my two cents though!

The market is shifting a little bit here in Portland, OR but it depends on what area you are in and price point. A lot of places that have space (3bd/1.5ba) are still competititive and in the suburbs you need to have pretty strong terms still. Some places are getting less offers though!

Hey Evan! I'd take a look at this post https://www.biggerpockets.com/...

Julee has some great points 

One thing to note is that it is harder to get people to accept 203k loans in hot markets since you might be competing against flippers. 

Congrats on doing a flip! 

I think your strategy is sound. Just know that the mother-in-law suite might rent for less in general. This is something I have seen a lot in Portland since we have been building a lot more ADUs but they have been more for Airbnb's. 

I think that I'd run the numbers to see if it is worth it for you in terms of time, money, and energy. If you find things that are turn key they typically don't have as much of a return. Hope that helps!