All Forum Posts by: Account Closed

I got cheap properties, all financed, and all doing great. Mikes strategy is great too. There is so many different ways to make money. I hear this argument every week on BP. My opinion is there is no right or wrong answer here. Just personal preference and for me it's wherever I can get the best deal. Whether it's a A,B, or C class. If it's a great deal then I'm interested!

@Eran Greenburghere's the breakdown if you must know.  

Purchase Price $39,500

Initial Cash invested $10,270

Net operating expenses monthly $467

Rent $750/month

Cash Flow $237/month

Cap Rate 13.2%

Cash on Cash return 27.6

This particular property was bought off MLS. I purchased one other similar to this off MLS and 2 from FS Houses that they rehabbed.

@Neil Patrick I invested in indianapolis and bought 5 properties there.  I'm now moving into the birmingham market to diversify my portfolio.  There are many great markets out there.  We like Indianpolis, Kansas City, and Birmingham. An excellent source to research markets is www.city-data.com and www.neighborhoodscout.com

@Neil Patrick . I got my start in Real Estate investing in October 2014. Investing out of state is not as difficult as you may think. I would recommend using a complete turnkey company that is stationed in the actually city. It keeps things simple. As for your finances I would use the $50k cash for down payments and buy 4-5 properties around $40-55k. Your total cash flow could be over $1000/month bet easily...if you play your cards right and choose the right market.

My guess why people no longer have there HELOC is that they used it to get their start and now no longer need it as they have funds from there properties available to reinvest. Am I right?

My thoughts on this are it depends on the student. Nice thing about students is someone else is paying there rent. Whether it's there parents, a college fund, or a student loan the fact is its a steady income that pays the rent. I went to college and was the party type so I like to think I would know one when I saw one. The screening process would be key. Ask them what there are majoring in. If it's a tough program chances are they are taking there studies seriously. I also like to think that girls are more mature than men. It's actually a known fact. That said they are more likely to handle there finances better and keep the noise levels down. They are also cleaner too. Well ....most anyway. Bottom line would be to not exclude because of the simple fact that they are a student. Screen them like anyone else and you might be surprised.

Also...the fact that the seller dropped his price by $20k is a big red flag for me. Make sure you get an inspection! I have a feeling there's a lot of repairs needed.

I asked this same question to many investors a few months ago. The consensus was that SFH are a better investment than Multiunit specifically for the Indy market. They told me that the rents for a SFH and a Duplex are very close if not exactly the same. People will go for the SFH every time. It's also easier to manage a SFH opposed to a Multiunit because you don't have to deal with conflict between the units in a multifamily. Specifically noise complaints. A SFH will also be easier to resell as an exit strategy in the future. Both investors and home owners are interested in SFH where as only investors would be interested in a duplex. And in the Indy market it seems like minimal investors are interested in multi units. That leaves a small group of people to resell it to if you ever decided to do so. Cash flow may seem better but is it really? You pay $60k for a duplex with $1100 rent/ month = 1.8% rent/price ratio. For $70k you could get 2 SFH ($35k each) for $700 rent each ($1400 total) = 2% rent/price ratio. Now even if you were more conservative with the rent and said $625 each ($1250 total) with 70k purchase price total for both properties = 1.8% My point is don't let the cash flow cloud the bigger picture. Think outside the box and put all the pieces together. The numbers are important but only 1 piece to the puzzle.

Get a loan for the 25% down. Then that turns into 0% down for the property. Perhaps a home equity loan, a 401k loan, A Cash advance on a credit card, or a private lender. "Using other people's money".

I'm curious to hear everyone's thoughts on the C CLASS vs B CLASS debate specifically for the Birmingham market for buy and hold cash flow properties. I understand the different risk levels of both classes and different types of homes and tenants that come with each. Thats not what I'm asking. My question is "from your experience which strategy has worked the best for you"? Buying B class properties in the suburbs or C class properties close to the inner city.? Or perhaps diversifying and buying both?