All Forum Posts by: Tony G

I have an investor with capital looking to invest and he's a real estate broker from out of town with an inactive license. I don't have a real estate license so he can't pay me commission or a fee for finding him deals. What options do I have to be part of this deal?

He's also looking into commercial real estate, which I have no experience in, again, how can I structure a win/win deal?

@Alan Mackenthun In your opinion, currently, what locations are good for flipping? Could you elaborate more on what different types of properties you are looking at these days and what qualities are missing from before? Also, what could one expect for ROI in this market?

I'm thinking of getting my real estate license in minnesota, and I'm curious if it's a good idea b/c of the inventory being low? Are there a lot properties out there to flip or rentals w/ decent cash flow and returns left?

I see myself more as a buyer's agent. I currently have 2 investors that have a good deal of capital to invest either in flips, rentals, or commercial and looking to purchase. I'd be interested in collaborating w/ an experienced investor agent in the area.

When calculating cap rates, i understand in the article below, ali boone advises us to NOT add the mortgage payment. If this is true, wouldn't the cap rate be 4.5% vs 9.7%?

358 x 12 = 4296 / 94500 = 4.5% (mortgage not added)

358 + 406 x 12 = 9168 / 94500 = 9.7% (mortgage added)

Any clarification would be much appreciated.

http://www.biggerpockets.com/renewsblog/2013/01/19/real-estate-math/

The Cap Rate equation:

Net Annual Income / Purchase Price = Cap Rate

NOTE: I don’t include the mortgage payment in this calculation.

Hello BP nation, I would love to get your inputs.

This is my scenario. I want to purchase a OO duplex w/ a partner. I have 30k in capital and would like to use minimal cash outlay. I'm looking at 100k-150k properties. I would like conventional loan 30 yrs @ 5%. My credit is 810. I'm currently seeking employment, work history from 2 years ago is fine. However, before those 2 years I don't show a whole lot of income. My partner's credit is 760+, work history is okay and currently employed at his job for over a year @ 50k/yr, and does not have enough for down payment.

If we can't get approved by the banks, what other options are available that would allow both of us to be on title and loan?

@ Minh

Would it be fair for me to say that when OO'ing a duplex, reaching the break even point or to cash flow is very difficult, and in order to get close it would comprise of the following: 1) paying down the principal, 2) getting rid of pmi, and 3) renting out my unit when i've fulfilled the occupancy clause?

Are there any other options or avenues to be considered?

purchase price- 129,900

rents- 800 rent for rented unit, units are 2/1

property tax- 2200

insurance/pmi- 2400

maintenance/repairs (15% of rental income)- 1440

utilities- paid by tenants, separately metered

vacancy rate- 960 (10%)

capex/improvements- 5k

Financing

DP- 6670 (5%)

Loan Amt- 126,730

Closing Cost- 3500 rolled into loan

Cash Outlay- 11,670

Interest Rate/Term- 4.5% @ 30yrs

Mortgage Payment (PI)- 642

Numbers

Yearly NOI- 2600

Yearly Cash Flow: -5105

Question: Help me understand how OO properties can cash-flow.

Since I would need to rent one side for 1275, which would be unreasonable for the area for a 2/1, to break even and have no expenses, what needs to be changed in this example in order to get to break-even or cash flow point?

Hello BP nation!!

On a OO duplex (primary residence), using conventional loan 30yr w/ 5% down, if I were to live on one side, would I be able to rent out the other side right away w/o violating any occupancy/due on sale clauses?

Ned Carey Please clarify for me where I am miseducated.

If I go conventional loan 30years @ 4% w/ 5% down payment owner occupied 100k property, since I should be able to roll the closing costs into the loan are there any fees or interest rate spikes for the lender to do that for me?

WIth previous threads and articles I have read, why do investors add closing costs as part of their cash outlay? I always assume people would want to roll it into the loan and have cash reserves.

How would the #s fluctuate or what would change if closing costs were rolled into the loan vs. paying out of pocket in the loan example above? (ex. cash flow, CoC, etc.)

Bill Gulley My thoughts were to go OO and would do a 5% down conventional w/ PMI which may fall off 1-1.5 years if the lender sees you are paying payments on time, but its at their discretion. Worse case scenario would be I'd have to wait until I have 20% equity in the property.
I don't think I would go FHA since I heard the mortgage insurance would be for the life of the loan and wouldn't drop off even with 20% equity. Is this factual?

Seth Williams Your post got me thinking as usual :) In regards to due diligence before buying, as far as obtaining accurate rent income from previous owner, what other information should I be obtaining? Are there ways to find out how the tenants are or if necessary repairs were made?