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Davej626, check your PMs

Thanks Mike. I am in the "Should I or shouldn't I" phase of the process. I'm posting it here, because there are probably others that are thinking the same thing. There is great risk in doing it the way that I would have to do the money part of the process. The buy-it, fix-it, sell-it, Profit part is not a worry. Its the pay for it and sell it that is the hitch. I mean its a lot safer to go to work for 40 hrs a week and not worry. Of course, its safer, but safe is not always better. And what happens if the job falls through? Sorry about this, just thinking out loud. You made great points in the pm, especially about the life lessons from the kids house. If I do go through with it, this is my plan. Let me know what you all think. Take an HE loan out for 100k at 7%. This is the going rate and a loan is lower than the LOC which is at 7.75% now. So the loan is for 100k. Pay off numberous installment loans and a small line of credit that are outstanding. Payment on this HEL would be less than the total of these small loans. This would be about 35k tops. This leaves 65k. Take 35k of that and buy a 3/4 family for 350k. Mortgage, at 6.25% with no points, would be about (6.16x315k) 1940. If we took a 4 fam, it would probably need some work. Budget out another 10k for these repairs and then rent out. If its a 4 family, on the low end of the rents in the area, that would be about 3500-4000 a month depending on layout of the building. 3 BRs are going for 1200, 2br a 1000, and one br for 800. If its a 3 family, then it should still be in decent condition and not need that much work. Budget 5k for expenses here. Rental income for this 3fam would be between 2500-3000 a month. Still plenty to cover the mortgage of 1940. But we would also need to add in to the 1940 a 20% continency fund (plowing, lawn care, etc). This would bump the monthly nut to about 2350. Still steep, but now we have that insurance policy in case something really goes wrong. Now we have the first building. It cost us 350k, and the mortgage is 315. Rental income is above the mortgage payment and gives us a positive cash flow. Our primary residence's bill are lower due to the HEL and we presently have 30k in the bank. It would be time to start looking for #2. Crazy or what? What am I missing? I realize that I would have to talk with a broker to make sure I can qualify for that first 350k mortgage. No sense in taking out the HEL if it disqualifies me for that. I still think I am missing something here.Mike and Jeff, thanks for the pms. They really help. I am thinking more of a buy low, fix up, and hold long term right now. If the market around here bounces, then I am looking good. A lot of ifs in that...THx.
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So glad this thread is still alive. I am up to 300+ units,  A 50 unit apartment building, and 200+ units simple walking distance from my back door.  Quality infrastructure, although I am losing m

I've had numerous realtors call me to ask if I'm selling anything.  We just had a long term tenant move out of a 3/2 sfh, I'm tempted to sell.  We should get about 6-7x what we paid for it 9 years ago

best worst humble brag of the year nomination.  

Davej626, check your PMs

Thanks Mike. I am in the "Should I or shouldn't I" phase of the process. I'm posting it here, because there are probably others that are thinking the same thing. There is great risk in doing it the way that I would have to do the money part of the process. The buy-it, fix-it, sell-it, Profit part is not a worry. Its the pay for it and sell it that is the hitch. I mean its a lot safer to go to work for 40 hrs a week and not worry. Of course, its safer, but safe is not always better. And what happens if the job falls through? Sorry about this, just thinking out loud. You made great points in the pm, especially about the life lessons from the kids house. If I do go through with it, this is my plan. Let me know what you all think. Take an HE loan out for 100k at 7%. This is the going rate and a loan is lower than the LOC which is at 7.75% now. So the loan is for 100k. Pay off numberous installment loans and a small line of credit that are outstanding. Payment on this HEL would be less than the total of these small loans. This would be about 35k tops. This leaves 65k. Take 35k of that and buy a 3/4 family for 350k. Mortgage, at 6.25% with no points, would be about (6.16x315k) 1940. If we took a 4 fam, it would probably need some work. Budget out another 10k for these repairs and then rent out. If its a 4 family, on the low end of the rents in the area, that would be about 3500-4000 a month depending on layout of the building. 3 BRs are going for 1200, 2br a 1000, and one br for 800. If its a 3 family, then it should still be in decent condition and not need that much work. Budget 5k for expenses here. Rental income for this 3fam would be between 2500-3000 a month. Still plenty to cover the mortgage of 1940. But we would also need to add in to the 1940 a 20% continency fund (plowing, lawn care, etc). This would bump the monthly nut to about 2350. Still steep, but now we have that insurance policy in case something really goes wrong. Now we have the first building. It cost us 350k, and the mortgage is 315. Rental income is above the mortgage payment and gives us a positive cash flow. Our primary residence's bill are lower due to the HEL and we presently have 30k in the bank. It would be time to start looking for #2. Crazy or what? What am I missing? I realize that I would have to talk with a broker to make sure I can qualify for that first 350k mortgage. No sense in taking out the HEL if it disqualifies me for that. I still think I am missing something here.Mike and Jeff, thanks for the pms. They really help. I am thinking more of a buy low, fix up, and hold long term right now. If the market around here bounces, then I am looking good. A lot of ifs in that...THx.
Go to creonline and find a local Real Estate group. That might help you.
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I'm also a little hesitant to just use that equity to buy another multi, because I'm not confident that I can find this good of a deal again. And other landlords that I've spoken with have enough of a "cushion" built up in savings that they could handle a long period where units weren't rented and/or needed major repairs -- I really don't want to get in a position where things are just barely in the black and I'm worried about paying the bills each month, let alone having to pour cash into the places.

And that's why many people Flip, or cash out without holding. The old "That's why Girls don't play Football, it's dangerous out there" :ph34r: For the last number of years, every time I build up a VERY comfortable nest egg, everything would go wrong. I do set aside money each month for problems, and we do just plan on replacing some things, budget for them, and replace some things before they quit working.That said, we got clobbered this late summer with a half roof tear off and replace, a Roof that caved in, a complete re-roof on another property, and a complete rebuild of the roof line on another unit. That all happened in about 6 weeks.Late Spring I had 5 Fridges and 4 stoves all give up the ghost within about 4 weeks.Of course both of those happened in the middle of a planned $20K rehab.The worst was last winter. We had budgeted and planed to install 4 new High Eff. Furnaces. Unfortunately, that was going to take down the funds to a "scary" level. Then I had 8 Furnaces that needed repair last winter. What a nightmare, there were times I didn't know how some bills were going to get paid last winter.And keep in mind that I hold back a lot of reserves normally to cover anything. We keep 2 months of complete mortgage, Insurance, Taxes, and any utilities back in reserves. Blew through all of that last winter as well.Been doing this some 10 years now, and last year could have taken me out of the game. Should have bought 2 furnaces, didn't plan for the worst. If you don't have some reserves, you can get in trouble fast. Some of my best deals are from bailing out those who didn't have enough to weather the storms.Some of the VERY best advice I can give to anyone wanting to do this: While you still have a solid job, and a good debt to income ratio, go and get a big credit line NOW before you can't get one later. Don't ever use it, leave it alone, pay the $100.00 or whatever it is every year to just have it. Sometime down the road, when the chips are down, you will thank your stars that you got that back when you could still get one. When you desperately need Money, No one will lend it to you.If you are in a market that can cover it, I would most likely start out flipping one or two before I became a LL.
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Scott, here is my disclaimer. I've done this for other people. I don't know your market. I don't know what is Gang war land, what is crack head central, the condition of any of the area. What seems like a good deal some thousand miles away could be crap where you sit? Only you know your market, please do due diligence.

The zip codes where I'd be most likely to invest are : 64501, 64503, 64079, 66061 and 66212.

Take a look at this:

Summit Place Apts

23 Units 100% Occupied Gross Rents $132,000 NOI $93,192 Doors and space exist for 9 Additional 2 Bd. Units which have never been built out. 5 - 1 Bedroom Rents =$385.00 14- 2 Bedroom Rents =$485.00 4- 3 Bedroom Rents =525.00 Laundry Income =$185.00/Mo Management =5% Repairs and Maintenance at $6.00/Hr. Parking Space for 38+ Vehicles

This place is RIGHT up my alley. Downtown, Historic District. I don't know, but I assume that is the Court house just two blocks south on Francis and Fredrick? What a crazy river pattern by the way. Anyway, 23 Units, supposedly fully rented out (Plan your 5% vacancy into your figures) 1.1 Million for 23 Units that look to be in great shape.

Roll your profit into a Down payment, or better yet, Seller carry the note for a few years. I don't know how that Cap rate looks in your area? See if Jeff will look at this for you as well. If that Financial summery they have posted is correct, something like this is a winner. I also found this interesting:

Only 22,000 of 32,000 Ft occupied by units, space for 9 more.

Find out if that means there is space to build new units out in the yard, or does it mean there is 10K unused space already within the building that could be converted to living space?

It's interesting that the Apartment buildings on the KS side seem to be silly over valued, and the MO side much more reasonable.

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OK, now I'll look at the Zip codes looking for Multies that could be worth looking into. No way a SFH is going to give you a decent short term return. You want cash in pocket. What I am thinking here is if you want to cash out of where you are (Remember, you could keep the current building, and just take out equity for a couple of down payments on other buildings!!!) Anyway, if you want to cash out, one of the better ways to go is to take your windfall, and buy 4 houses, or some number of more properties to make more cash flow in volume.

64501

Once again, don't know your area, but this zip code is my kind of properties. Historic Downtown, priced well. Very similar to my market and downtown Columbus OH.

This one is screaming out to me for two reasons: one, it is a smoking hot deal, and two, it's almost too good of a deal for the other properties I can find.

1017-19 Sylvanie

Still right on 10th street downtown, but further south than a number of other things. Not huge south, but about 6-7 blocks. 4-plex with 2 ones, and 2 twos. At 46K for a brick 4-plex, this seems like a smoking deal, and it might be. What I would watch for is the heating. It states Gas heat. I wouldn't think it has 4 furnaces, so it is most likely Owner pays Heat, and most likely Electric and water. Paying for Tenants utilities is one of the very worst things you can do. ALL of your profits can be gone before you know it. Trust me, I made this mistake a few times. The worst one ever was when I bought a place that made lots of money on paper. End of the day, My best month in the first year was when we only lost $34.00 on the month. Oh, and the Inherited Tenants were seriously psycho. Some of the worst tenants we ever had, ever. Nothing is better than paying $34.00 out of your pocket on the BEST month for the privilege of having psycho tenants.

Let me know about the area right here, this intrigues me like there is no tomorrow.

1613-15 Francis

I don't know how 1-bedrooms go in your area. I have found that in my market, one and two bedroom units are about the only way to go RIGHT downtown like this is. 5 one bedrooms for $65K might be huge, it might be a complete bust. This is interesting enough for you to look into though.

My Detailed MLS seems to be down, so I am having a hard time pulling rents and such. You will need to do some research.

There are other things in this Zip, but those two stand out above the rest. Obviously what you would look to do here is buy 3-5 properties with your windfall for a greater cash flow, OR.....

Take your $100K or whatever it is, buy one of these out right with no Mortgage of any kind. Now, lets just run some numbers, who knows if these numbers are right, but it's a place to think from:

Let's say those one bedrooms rent for say $425.00 a month (Remember, I think you pay Utilities, so taking the one bedroom rents from Summit Place Apt, and working up from there to cover Utilities, just guessing). My Market seems similar, and we get $375 for a one bedroom where the tenant pays electric and electric heat, $425-475 if the LL pays all. So, $425.00

Five units, assume one unit open every month (Lower than the 5%, but lets be SUPER safe) So 4 units by 425.00 is $1700.00 a month. Less taxes, insurance, maintenance, utilities on a annual basis (Higher in winter where you might make next to nothing, Low in the summer) and you could clear $1,200.00 or so a month straight into your pocket and never have a Mortgage. (Really more like $1,500.00 a month into your pocket, but remember we are figuring a 20% vacancy rate to be SUPER safe)

Might be a way to go? Certainly something to think about. Put that say $1,200.00 aside for 5 months, build up a $5K safety net. The next 5 months goes to a down payment on the next one.

Honestly, you could do that with either of these properties, and KEEP the property you have now. Take out some Equity as long as the current place will still cash flow.

It's a market just like this one that I was able to build up some 80 Units in. It would be easy to accomplish in this kind of market.

Or the area might be a Cracked out drug war zone? If so, run.

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I see nothing of any kind that is intriguing in the 64503 Zip code. Best of the lot is a 4 bedroom Triplex for $60K.

OoooooKayyyy, it's obvious that 64079 is a HIGH end area of Town. Yikes. Best deals here are brand new cookie cutter duplex builds. Most likely 2-3 bedroom, two car garage, 1.5 bath, your average suburban mass sprawl build out. Here is an example:

2513-15 Bent Oak Ct

This EXACT same building is for sale some 5+ times most likely on the same street. The issue is that to cover PITI, the works, I'll bet you have to get $1,200+ a month out of EACH side just to break Even. Can the area support that kind of rent?

Then give thought that this exact house/floor plan is for sale 5 times today on the market. You can sort of see one just like it next door in the picture. So a whole street of exactly the same buildings on the market. if all are bought with the thought to rent, you have all your competition right there say 100 yards away that could undercut your price. I can't see this as a winner unless Appreciation in your market is just out of control crazy? You would know better than any of us.

HOWEVER, thinking outside the box here. Assuming that this Zip is the High end of Town, growing, appreciating, the works..... (You tell us?) Anyway, give some thought to this is those were givens:

8 Units

I don't have an address, can't map it, nothing. However, it is most likely about 35 years old, and is an older apartment building for this area if this is the Hot place to live. You might have more up keep, but if the rents are HIGH here, this could be a monster with every unit being a 2 bedroom (My personal favorite) You would have to contact a local Realtor to even get enough info to see if it is worthwhile. If the area is HOT, the land it sits on might just be worth the asking price, with the units effectively free to use. Who knows?

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Scott, if you haven't been around the thread from way back, I should point out that I am bias when it comes to properties.

First, CASH IS KING. Couldn't care less about appreciation. I am not that much of a gambler. I'll never be Donald Trump. Other people in this thread are more aggressive. For me, I want cash. I can do everything else I need to if I have cash to work with. Buying a property that loses money (Heck, buying a property that doesn't make GOOD money) and hoping for a big payday down the road while I struggle to survive now is not the path for me. If it doesn't make good money, I want nothing to do with it. This is about 95% of my driving mindset.

Second, I love 100+ year old Historic Homes. I believe with everything I know that Historic Downtown Properties are where the money is over the next Decade plus. The profit ratios over the next number of years in these areas is going to be substantial. This is about 5% of my driving mindset.

OK, just wanted to get that out there so I could comment on the next zip code.

66061

From my perspective, this is a dog of a Zip code. Seems to be in the expensive State. 1950-1970 houses, priced like brand new builds are just across the river (State line). Ugly Brady Bunch duplexes where you need say $900.00 a month EACH side in rent to break even at these selling prices. Even the 4-plexes need $800 per unit to break even. I wouldn't touch this with Jeff's money. :unsure:

66212 - Same as just above. I don't think KS is where the money is.

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Davej626, check your PMs

Thanks Mike. I am in the "Should I or shouldn't I" phase of the process. I'm posting it here, because there are probably others that are thinking the same thing. There is great risk in doing it the way that I would have to do the money part of the process. The buy-it, fix-it, sell-it, Profit part is not a worry. Its the pay for it and sell it that is the hitch. I mean its a lot safer to go to work for 40 hrs a week and not worry. Of course, its safer, but safe is not always better. And what happens if the job falls through? Sorry about this, just thinking out loud. You made great points in the pm, especially about the life lessons from the kids house. If I do go through with it, this is my plan. Let me know what you all think. Take an HE loan out for 100k at 7%. This is the going rate and a loan is lower than the LOC which is at 7.75% now. So the loan is for 100k. Pay off numerous installment loans and a small line of credit that are outstanding. Payment on this HEL would be less than the total of these small loans. This would be about 35k tops. This leaves 65k. Take 35k of that and buy a 3/4 family for 350k. Mortgage, at 6.25% with no points, would be about (6.16x315k) 1940. If we took a 4 fam, it would probably need some work. Budget out another 10k for these repairs and then rent out. If its a 4 family, on the low end of the rents in the area, that would be about 3500-4000 a month depending on layout of the building. 3 BRs are going for 1200, 2br a 1000, and one br for 800. If its a 3 family, then it should still be in decent condition and not need that much work. Budget 5k for expenses here. Rental income for this 3fam would be between 2500-3000 a month. Still plenty to cover the mortgage of 1940. But we would also need to add in to the 1940 a 20% contingency fund (plowing, lawn care, etc). This would bump the monthly nut to about 2350. Still steep, but now we have that insurance policy in case something really goes wrong. Now we have the first building. It cost us 350k, and the mortgage is 315. Rental income is above the mortgage payment and gives us a positive cash flow. Our primary residence's bill are lower due to the HEL and we presently have 30k in the bank. It would be time to start looking for #2. Crazy or what? What am I missing? I realize that I would have to talk with a broker to make sure I can qualify for that first 350k mortgage. No sense in taking out the HEL if it disqualifies me for that. I still think I am missing something here.Mike and Jeff, thanks for the pms. They really help. I am thinking more of a buy low, fix up, and hold long term right now. If the market around here bounces, then I am looking good. A lot of ifs in that...THx.
I don't know that you are missing much from the money side of it. My rule of thumb is that a 3 family needs to be able to support itself with only 2 units rented. 3 supports a 4-plex. I want one side to carry the nut on a Duplex. To accomplish that, I buy distressed properties for pennies on the dollar, and do the lions share of all work myself.Early on, say $200.00 a unit profit was enough. But I had a job, and paid other people to do things I hadn't learned how to do yet. It's shocking what labor costs. As an example, in my area, $2.75 a sqft is a smoking deal for installing Ceramic Tile where you buy all the materials, Labor only. A 10x10 room ends up being $275.00 for someone else to install. Honestly? Tile is a simple thing to do...If you just roll up your sleeves and do it. Accept that you might make a mistake, and just do it.Understand that I am kind of alone in this "do it yourself". A number of the posters in this thread hire everything out, and build the costs into their project. I can't stand paying what feels like too much money for something I can do myself. I certainly couldn't pay for everything to be done just starting out. Starting out, I needed every penny.Are there things to hire out? Absolutely. Steep and high roof repair. Carpet install (God that is easy to mess up and lose $100s having to correct it. Heavy electrical. I can walk you through light electrical, but not the heavy stuff.Plumbing is very simple, and those drunken plumbers charge $30-$70.00 an hour. Anyone can plumb now days with the products available.You will need a rainy day, everything just went wrong fund. If you can't afford to replace a Furnace in the middle of the winter, and you supply the heat, expect that Code will condemn the entire building, and you will get ZERO rent. That's the first way to fail. Same with the roof. With one property, I would want say $5K sitting somewhere that I can get to quickly. That's why I recommended an Equity line NOW while you can still get one. Later, when your Debt to Income is crap because you have maxed out all your Credit cards to stay afloat, and you desperately need money, you won't be able to get any. You don't need $5K sitting in a Money Market fund, but you do need access to $5K to be safe.That is how most people fail, they stretch to thin.The second way is that they don't understand the real costs of renting out a unit. You will need to advertise. It will sicken your stomach when you pay $250.00 for a 2 week add in the paper, and get nothing but Slugs calling. a 17 year old who needs a one bedroom for them, their friend, and their boyfriend. They have 3 Pit Bulls, but they "Don't" know what they are, "I think it's a Mutt". They actually get through your prescreening on the phone, and they have evictions, battery charges, Damages in other rentals. The list goes on and on. You will need an ENTIRELY different way to contact you if you start to get big. Don't under any circumstances ever give them the home phone number (Or address for that matter). You don't need your current business cell phone to start ringing off the hook. Every time it turns over, you need to most likely touch up paint, clean the carpets, the list goes on and on. Now, you are going to say that is what the Deposit is for, and you are right. Unless the damages are over the Deposit. They last family I removed left me a pile of Dog crap in every bedroom.And most importantly, if you have a good amount of damage, it takes time to get it ready to re-rent. Loosing just one month of rent can set you back.Just for fun, assume you clear $200.00 in profit on a one bedroom that rents for $800.00 Every month that the unit is vacant takes you 4 months to get back to break even. A three month vacancy at $800 a month is $2400 in lost rent. At your profit of $200.00 a month, it takes a solid year of perfect rental history just to get back to EVEN!There is a cost in money, but more importantly in TIME on every turn over.The 3rd way people fail is they don't screen, screen, screen the possible tenant. People are creatures of habit. If someone didn't respect their debts in the past, they aren't going to respect your debts. I remember back to the applicant who had a battery on his record when I pulled it. I call him to bounce him, and he tells me that it was an OK battery because he hit a Cop. HUH? If that person can attack a Cop, I can't see anything keeping him from attacking me.You will get all types of renters applying. I have a Number of tenants who make more than I do, with better credit than I have. It happens. I also have a Rapist apply once or twice a year. They have to live somewhere, and will try anything. Sooner or later, they will find a LL that won't check.End of the day, if you are clearing a Grand going in before you can take control of the building and the outgoing costs to reign them in some, you have a winner. Make sure you understand the Utilities. Many LLs fail because they pay Utilities.
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Wow Mike. Was your cable out or something? Thanks for the pointers. Always great stuff..

Mike, on Realtor, is there a way to see the actual address? I searched in my area and there are only two props with addresses listed. Thanks!

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Scott, here is my disclaimer. I've done this for other people. I don't know your market. I don't know what is Gang war land, what is crack head central, the condition of any of the area. What seems like a good deal some thousand miles away could be crap where you sit? Only you know your market, please do due diligence.

The zip codes where I'd be most likely to invest are : 64501, 64503, 64079, 66061 and 66212.

Take a look at this:

Summit Place Apts

23 Units 100% Occupied Gross Rents $132,000 NOI $93,192 Doors and space exist for 9 Additional 2 Bd. Units which have never been built out. 5 - 1 Bedroom Rents =$385.00 14- 2 Bedroom Rents =$485.00 4- 3 Bedroom Rents =525.00 Laundry Income =$185.00/Mo Management =5% Repairs and Maintenance at $6.00/Hr. Parking Space for 38+ Vehicles

This place is RIGHT up my alley. Downtown, Historic District. I don't know, but I assume that is the Court house just two blocks south on Francis and Fredrick? What a crazy river pattern by the way. Anyway, 23 Units, supposedly fully rented out (Plan your 5% vacancy into your figures) 1.1 Million for 23 Units that look to be in great shape.

Roll your profit into a Down payment, or better yet, Seller carry the note for a few years. I don't know how that Cap rate looks in your area? See if Jeff will look at this for you as well. If that Financial summery they have posted is correct, something like this is a winner. I also found this interesting:

Only 22,000 of 32,000 Ft occupied by units, space for 9 more.

Find out if that means there is space to build new units out in the yard, or does it mean there is 10K unused space already within the building that could be converted to living space?

It's interesting that the Apartment buildings on the KS side seem to be silly over valued, and the MO side much more reasonable.

Are we talking about Kansas City?

I've heard that there are really good deals there - I have no personal knowledge, but I know someone who bought a multi-unit / apt. building out there recently.

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How would one begin to do market research. I live in a rural type area where the towns are about 10-15k people. I am within 60 miles of 4 such towns. Anyway, I am looking to try to flip a house and wondering how I can get and accurate idea of the real market values in this area. The real estate values in other areas are much different (we never had any housing boom here in the past 20 years for instance.)

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How would one begin to do market research. I live in a rural type area where the towns are about 10-15k people. I am within 60 miles of 4 such towns. Anyway, I am looking to try to flip a house and wondering how I can get and accurate idea of the real market values in this area. The real estate values in other areas are much different (we never had any housing boom here in the past 20 years for instance.)

Realtor.com will give you the best idea of what houses are being priced at in your area. Let me say a few things about flipping before you jump in.I did a flip over the summer and while it will put a nice chunk of change in my pocket when it sells, I am shelling out over 1K/mo while it sits for sale. This is on a very cheap house. Dont forget when you're running your numbers to include the following AFTER it is on the market:Mortgage PaymentsGasWater/SewerElectricInsuranceProperty TaxesCredit Card payments (we put all purchases on 0% 1yr CC's)While I believe wholeheartedly this is a good move in the right markets (not last years boom markets), be sure you have not only the cash to purchase and rehab the property, but also to hold it while it sits for sale.Good luck!
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Hello,

First time home buyer and had a question about mortgages. In the CT area, looking for a house around $250K and will put down about 6% for a downpayment. Was planning on a 30 yr fixed, (rates are around 6 with 1 pt right now) but I've heard more and more about these 80/20 and 75/25 mortgages (benefit being no $150 monthly PMI payment - tradeoff is higher rate on that second mortgage, maybe 8.5% I was told). If I plan on staying in this place for 5-10 yrs, which is the better route to go? I was just planning on getting the house re-assessed in a few years and then PMI would drop?

Is there a calculator out there to work this out on my own?

Thanks in advance for the help!

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How would one begin to do market research. I live in a rural type area where the towns are about 10-15k people. I am within 60 miles of 4 such towns. Anyway, I am looking to try to flip a house and wondering how I can get and accurate idea of the real market values in this area. The real estate values in other areas are much different (we never had any housing boom here in the past 20 years for instance.)

Realtor.com will give you the best idea of what houses are being priced at in your area. Let me say a few things about flipping before you jump in.I did a flip over the summer and while it will put a nice chunk of change in my pocket when it sells, I am shelling out over 1K/mo while it sits for sale. This is on a very cheap house. Dont forget when you're running your numbers to include the following AFTER it is on the market:Mortgage PaymentsGasWater/SewerElectricInsuranceProperty TaxesCredit Card payments (we put all purchases on 0% 1yr CC's)While I believe wholeheartedly this is a good move in the right markets (not last years boom markets), be sure you have not only the cash to purchase and rehab the property, but also to hold it while it sits for sale.Good luck!
We have a couple of mobile homes that we've sold on payments so that brings us in about $700 per month, we will probably sell another mobile or two before we jump into the flipping. This should then be netting us about $1000-$1200 per month which will help offset the monthly payments, of which I hope we only have 2. But if and when it takes a while to sell, we won't be digging into our pockets for mortgages.
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Hello,First time home buyer and had a question about mortgages. In the CT area, looking for a house around $250K and will put down about 6% for a downpayment. Was planning on a 30 yr fixed, (rates are around 6 with 1 pt right now) but I've heard more and more about these 80/20 and 75/25 mortgages (benefit being no $150 monthly PMI payment - tradeoff is higher rate on that second mortgage, maybe 8.5% I was told). If I plan on staying in this place for 5-10 yrs, which is the better route to go? I was just planning on getting the house re-assessed in a few years and then PMI would drop? Is there a calculator out there to work this out on my own?Thanks in advance for the help!

Check into Countrywide. They have a fixed IO 10 year that coverts to a 20 year fixed at the same rate after 10 years. Zero down for a primary, 80/20. You don't even have to escrow taxes. Pound the difference into knocking out the 20% HELOC. Best thing is that money is available for other uses in an emergency.I have no affliation with Countrywide and their loan process is a pain in the ###.
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Check into Countrywide. They have a fixed IO 10 year that coverts to a 20 year fixed at the same rate after 10 years. Zero down for a primary, 80/20. You don't even have to escrow taxes. Pound the difference into knocking out the 20% HELOC. Best thing is that money is available for other uses in an emergency.I have no affliation with Countrywide and their loan process is a pain in the ###.

Thanks for the help BassNBrew...a question on that 20% mortgage. Is that tied into a prime rate or just locked into a higher interest rate? The research I did shows for the 75/25 that the 75% first mortgage is locked in at a current rate (6%), but the 25% second mortgage is at a higher rate (8.5%). I guess what I'm asking is can that higher rate vary, even if it's a HELOC?Thanks again!
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Check into Countrywide. They have a fixed IO 10 year that coverts to a 20 year fixed at the same rate after 10 years. Zero down for a primary, 80/20. You don't even have to escrow taxes. Pound the difference into knocking out the 20% HELOC. Best thing is that money is available for other uses in an emergency.I have no affliation with Countrywide and their loan process is a pain in the ###.

Thanks for the help BassNBrew...a question on that 20% mortgage. Is that tied into a prime rate or just locked into a higher interest rate? The research I did shows for the 75/25 that the 75% first mortgage is locked in at a current rate (6%), but the 25% second mortgage is at a higher rate (8.5%). I guess what I'm asking is can that higher rate vary, even if it's a HELOC?Thanks again!
Most of the time, a HELOC will vary and be tied to the prime. If you do a HE Loan, vs the LOC, then the loan can be either a arm or a fixed. With your first question, that 20/25% is, in essence, another mortgage and can be any of the standard terms (fixed, arm, IO, etc) that a normal mortgage is.Edited to add that I am not sure about Countrywide. I am speaking in general terms only. Edited by Davej626
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Just some random thoughts I recently typed up that I thought I would paste in here. Might help someone?

On buying Owner Oc without actually living there and if it would hurt you with the lender to live in one unit, and not be collecting rent from the unit you live in:

I don't think you should be in an OO unless you PLAN to live there. If you honestly plan to live there, and your plans later change, don't worry about it (Unless you bought from HUD in the OO window) I have never seen living there, therefore taking away from the rental income to be a problem for anyone ever. Buying OO actually helps you as it can be a point or more lower on the rate. My experience says lenders don't care. If your's does, you don't have the right lender. When I first tried to start, my Lender cared, and I put off doing RE for over 2 years. The next lender I spoke with didn't care, and no one has since. The ones that do aren't investment lenders.

On how to get money to start up:

I used the equity in my primary to open an LOC that where you could dump fixed amounts into a lower locked rate when needed. Many lenders have that program. Then you can use that LOC to buy a home short term in cash which is better and easier in every way, then later refi, cash out, repay the LOC. That LOC is also your safety net early on if a Roof, Furnace, water heater, etc all go out in the same week. Later you will have built up reserves, but you need this early on. Don't tap the LOC until you need to, but on a STACK of Bibles kind of swearing here, you NEED to get that in place early before you have any income to debt ratio issues. Get as big of an LOC as you can before you start. Voice of experience here, when you absolutely have to have it, it will be harder to get than when you don't need it. Worst case, you get a $100K LOC and never touch it, paying a couple hundred a year for the right to have it. You need that for life emergencies even if you don't do RE.

On College for Kids:

My college plan is each kid gets a house/property bought for "Them". Sure, it's in your name, you take the profits every month, they get nothing now. But that property is their college. How old are your kids? Say 10 years or more away from college, and what is that house going to be worth after 10 years of TENANTS making your mortgage payments working it down PLUS 10 years of appreciation? Sell it when the time comes, take equity out, but either way, that property is for that kids college. Now the beauty is that each kid is now responsible for that house. Tell the kid it's their house. When you need to paint, take the kid to paint their house. Clean outs, the kid works, whenever something has to be done, you take the kid because it's their house. Over the course of a number of years, you will have some rough renters who leave you a mess. Kid goes to clean it up. Make sure to point out how vile it is, and this is how people who don't go to college live. Let them see the mattress on the floor, the Star Wars bedsheets over the windows, let them see what happens to people who live paycheck to paycheck. I consider this a life lesson that pays for college.

Next, you can "pay" your Child for work done, and then use that payment to buy the goods the child needs, like school clothes. You can still claim your kid on your taxes as long as you provide 51% of the moneys used for their living expenses. So, you could pay your kid for work performed on "Their" house, then use that money to buy Jeans for school. Effectively you write off their "Pay" to your rental house, and then they use it to buy things you would have bought for them anyway. You can write off your Daughters Prom Dress to the Rental property. At the end of the day, you need to provide for 51% of their expenses to claim them on your taxes. PLEASE see your accountant for the details.

I close on the new property for my 14 DAY (Now 27 Day Old, I close tomorrow on a little 2/1 duplex for her) old daughter early next month. You can bet she will spend the next 18 years working on her rental. That rental will pay for her college and then some a couple of decades from now.

On ways to find properties:

I use everything to find properties. Tell everyone you know that you are looking. I get referrals from Divorce lawyers (Seriously, this is a good way), people in the area, find them in the paper, attend your local LL group, scour the MLS, anything. This is a HUGE question, it has been addressed somewhere in the thread. I'm not getting off on that tangent tonight. What I will say is that the Paper gives you cold deals. Anything really valuable was gone long before the weekly newspaper Home section comes out. The paper provides leads that tons of people have already looked at. A hot deal isn't going to be in the paper. Give me some Zip codes, and let me do some digging for you.

On what LAND LORD book to buy FIRST:

There are TONS of RE books. IF YOU WANT TO BE A LL, your first book should be "Landlording" by Leigh Robinson. It's the "Dummies" book for Landlording. Very simple, infact, given that you are a FBG, and therefore have an IQ of 800, yada, yada, yada.... it might be a little too simple, but honestly, I strongly recommend it, it lays out so many things as simple as they can be put. It's as basic as basic can be in plain simple language.

On On-line Resources:

IF YOU WANT TO BE A LL, I really recommend that you go and LIVE at this link. Spend as many hours as you can at this link, and ask every dumb question you can think of. THIS site is the Holy Grail IF YOU WANT TO BE A LL. I'm not saying become a "Gold" member or anything like that, just spend some time on the MB, and look around the site. Not telling you to buy anything, understand that the site as a whole is there to sell LLs product. Some of it is valuable, some of it is not. I've bought some stuff, and thought some of it was a waste. I would be happy to post what I think it worthwhile and is worthless if you are interested. Posting on and reading the Message board here is honestly worth thousands and thousands of $$$$ when it comes to learning. I've paid upwards a grand to go to teaching conferences/seminars, and never once come close to learning what I learned off of this message board within my first week of finding it. Can't recommend it enough. This is THE BEST site I have EVER found (and trust me, I look everywhere) on the Internet for LLs.

Mr. Landlord Message board

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How would one begin to do market research. I live in a rural type area where the towns are about 10-15k people. I am within 60 miles of 4 such towns. Anyway, I am looking to try to flip a house and wondering how I can get and accurate idea of the real market values in this area. The real estate values in other areas are much different (we never had any housing boom here in the past 20 years for instance.)

Realtor.com will give you the best idea of what houses are being priced at in your area. Let me say a few things about flipping before you jump in.I did a flip over the summer and while it will put a nice chunk of change in my pocket when it sells, I am shelling out over 1K/mo while it sits for sale. This is on a very cheap house. Dont forget when you're running your numbers to include the following AFTER it is on the market:Mortgage PaymentsGasWater/SewerElectricInsuranceProperty TaxesCredit Card payments (we put all purchases on 0% 1yr CC's)While I believe wholeheartedly this is a good move in the right markets (not last years boom markets), be sure you have not only the cash to purchase and rehab the property, but also to hold it while it sits for sale.Good luck!
Random,Just out of total curiosity. I know the winter is the Worst time to sell, and we are going into Spring with people moving and almost more importantly Tax refund checks for Down payments. I've been in your spot right now before, and went both ways on different properties with limited success either way. (I really can't say which was the better approach)How have you balanced out the (1) Pay whatever it takes now to hold it and wait for the buying season risking more to make more, vs (2) drop the price, stop the outgoing money, and make what you can make now, most likely making less money?That was the toughest decision I ever wrestled with. Would love to hear your thoughts out loud if you are comfortable sharing, if not, no pressure.
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How would one begin to do market research. I live in a rural type area where the towns are about 10-15k people. I am within 60 miles of 4 such towns. Anyway, I am looking to try to flip a house and wondering how I can get and accurate idea of the real market values in this area. The real estate values in other areas are much different (we never had any housing boom here in the past 20 years for instance.)

Realtor.com will give you the best idea of what houses are being priced at in your area. Let me say a few things about flipping before you jump in.I did a flip over the summer and while it will put a nice chunk of change in my pocket when it sells, I am shelling out over 1K/mo while it sits for sale. This is on a very cheap house. Dont forget when you're running your numbers to include the following AFTER it is on the market:Mortgage PaymentsGasWater/SewerElectricInsuranceProperty TaxesCredit Card payments (we put all purchases on 0% 1yr CC's)While I believe wholeheartedly this is a good move in the right markets (not last years boom markets), be sure you have not only the cash to purchase and rehab the property, but also to hold it while it sits for sale.Good luck!
Random,Just out of total curiosity. I know the winter is the Worst time to sell, and we are going into Spring with people moving and almost more importantly Tax refund checks for Down payments. I've been in your spot right now before, and went both ways on different properties with limited success either way. (I really can't say which was the better approach)How have you balanced out the (1) Pay whatever it takes now to hold it and wait for the buying season risking more to make more, vs (2) drop the price, stop the outgoing money, and make what you can make now, most likely making less money?That was the toughest decision I ever wrestled with. Would love to hear your thoughts out loud if you are comfortable sharing, if not, no pressure.
I dont mind sharing at all. Thanks for asking.So far its been like thisFSBO for about 4-6 weeks. I can count the number of phone calls on one hand and had no showings.Listed with my agent and while she's done a little better with showings, still no offers.I asked her about a month ago if a price reduction would help, and she said to hold off on that. She felt it was mor the season than the price/property.The money going out each month isn't a killer (its basically money we would be putting into savings) and to be honest I was and am prepared to hold until I get an offer I am happy with.That said, we are expecting our first kid in April and I really wont be comfortable holding the houst past then.
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Check into Countrywide. They have a fixed IO 10 year that coverts to a 20 year fixed at the same rate after 10 years. Zero down for a primary, 80/20. You don't even have to escrow taxes. Pound the difference into knocking out the 20% HELOC. Best thing is that money is available for other uses in an emergency.I have no affliation with Countrywide and their loan process is a pain in the ###.

Thanks for the help BassNBrew...a question on that 20% mortgage. Is that tied into a prime rate or just locked into a higher interest rate? The research I did shows for the 75/25 that the 75% first mortgage is locked in at a current rate (6%), but the 25% second mortgage is at a higher rate (8.5%). I guess what I'm asking is can that higher rate vary, even if it's a HELOC?Thanks again!
They actually have both options. The higher rate does bite, but it's cheaper then the PMI and the IO loan let's you work it down quickly. For investments we've been using 80/10/10. The income or savings is applied to the 10% Heloc. Even at 10.5% it will be gone in 3 years.
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How would one begin to do market research. I live in a rural type area where the towns are about 10-15k people. I am within 60 miles of 4 such towns. Anyway, I am looking to try to flip a house and wondering how I can get and accurate idea of the real market values in this area. The real estate values in other areas are much different (we never had any housing boom here in the past 20 years for instance.)

Realtor.com will give you the best idea of what houses are being priced at in your area. Let me say a few things about flipping before you jump in.I did a flip over the summer and while it will put a nice chunk of change in my pocket when it sells, I am shelling out over 1K/mo while it sits for sale. This is on a very cheap house. Dont forget when you're running your numbers to include the following AFTER it is on the market:Mortgage PaymentsGasWater/SewerElectricInsuranceProperty TaxesCredit Card payments (we put all purchases on 0% 1yr CC's)While I believe wholeheartedly this is a good move in the right markets (not last years boom markets), be sure you have not only the cash to purchase and rehab the property, but also to hold it while it sits for sale.Good luck!
Random,Just out of total curiosity. I know the winter is the Worst time to sell, and we are going into Spring with people moving and almost more importantly Tax refund checks for Down payments. I've been in your spot right now before, and went both ways on different properties with limited success either way. (I really can't say which was the better approach)How have you balanced out the (1) Pay whatever it takes now to hold it and wait for the buying season risking more to make more, vs (2) drop the price, stop the outgoing money, and make what you can make now, most likely making less money?That was the toughest decision I ever wrestled with. Would love to hear your thoughts out loud if you are comfortable sharing, if not, no pressure.
I dont mind sharing at all. Thanks for asking.So far its been like thisFSBO for about 4-6 weeks. I can count the number of phone calls on one hand and had no showings.Listed with my agent and while she's done a little better with showings, still no offers.I asked her about a month ago if a price reduction would help, and she said to hold off on that. She felt it was mor the season than the price/property.The money going out each month isn't a killer (its basically money we would be putting into savings) and to be honest I was and am prepared to hold until I get an offer I am happy with.That said, we are expecting our first kid in April and I really wont be comfortable holding the houst past then.
If you have any input on what you did/should have done, as always I would love to hear it.
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How would one begin to do market research. I live in a rural type area where the towns are about 10-15k people. I am within 60 miles of 4 such towns. Anyway, I am looking to try to flip a house and wondering how I can get and accurate idea of the real market values in this area. The real estate values in other areas are much different (we never had any housing boom here in the past 20 years for instance.)

Realtor.com will give you the best idea of what houses are being priced at in your area. Let me say a few things about flipping before you jump in.I did a flip over the summer and while it will put a nice chunk of change in my pocket when it sells, I am shelling out over 1K/mo while it sits for sale. This is on a very cheap house. Dont forget when you're running your numbers to include the following AFTER it is on the market:Mortgage PaymentsGasWater/SewerElectricInsuranceProperty TaxesCredit Card payments (we put all purchases on 0% 1yr CC's)While I believe wholeheartedly this is a good move in the right markets (not last years boom markets), be sure you have not only the cash to purchase and rehab the property, but also to hold it while it sits for sale.Good luck!
Random,Just out of total curiosity. I know the winter is the Worst time to sell, and we are going into Spring with people moving and almost more importantly Tax refund checks for Down payments. I've been in your spot right now before, and went both ways on different properties with limited success either way. (I really can't say which was the better approach)How have you balanced out the (1) Pay whatever it takes now to hold it and wait for the buying season risking more to make more, vs (2) drop the price, stop the outgoing money, and make what you can make now, most likely making less money?That was the toughest decision I ever wrestled with. Would love to hear your thoughts out loud if you are comfortable sharing, if not, no pressure.
I dont mind sharing at all. Thanks for asking.So far its been like thisFSBO for about 4-6 weeks. I can count the number of phone calls on one hand and had no showings.Listed with my agent and while she's done a little better with showings, still no offers.I asked her about a month ago if a price reduction would help, and she said to hold off on that. She felt it was mor the season than the price/property.The money going out each month isn't a killer (its basically money we would be putting into savings) and to be honest I was and am prepared to hold until I get an offer I am happy with.That said, we are expecting our first kid in April and I really wont be comfortable holding the houst past then.
That was always my issue. It kills you to bleed in the winter when really no one is buying. No one worthwhile wants to move around Thanksgiving. Same with X-mas. Who wants to move up in OH in January? Same with February. So you are pretty much just waiting for a stoke of luck with a transfer into town or you are just waiting until March. Remember the Tax refund checks!So, the biggest battle in my mind was lower the price now in the winter to try and sell, and risk being stuck at that lower price once Spring rolls around and you could have gotten the higher price. Even with Rentals this is a terrible brain teaser.Sounds like you can weather the storm. Not many investors prepare like you obviously have. Seriously, good job there, very smart.For the record, my personal experience, I've dumped the price and always regretted it, I held the price, and been alot more satisfied end of the day, but I have the reserves to deal with waiting, as it sounds like you do. I wasn't going to post that, but you have stated you were able to wait. I didn't want to hurt your mindset.
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Check into Countrywide. They have a fixed IO 10 year that coverts to a 20 year fixed at the same rate after 10 years. Zero down for a primary, 80/20. You don't even have to escrow taxes. Pound the difference into knocking out the 20% HELOC. Best thing is that money is available for other uses in an emergency.I have no affliation with Countrywide and their loan process is a pain in the ###.

Thanks for the help BassNBrew...a question on that 20% mortgage. Is that tied into a prime rate or just locked into a higher interest rate? The research I did shows for the 75/25 that the 75% first mortgage is locked in at a current rate (6%), but the 25% second mortgage is at a higher rate (8.5%). I guess what I'm asking is can that higher rate vary, even if it's a HELOC?Thanks again!
My Internet connection sucks. Nothing is worse than waiting some 30 minutes to get back on to type a responce. Yes I have no patience.Anyway, DO THE MATH, that higher interest rate will be less than PMI (The %^*%&^%^^(4 letter F word) YOU VERY MUCH tax) every time. Do the Math.
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How would one begin to do market research. I live in a rural type area where the towns are about 10-15k people. I am within 60 miles of 4 such towns. Anyway, I am looking to try to flip a house and wondering how I can get and accurate idea of the real market values in this area. The real estate values in other areas are much different (we never had any housing boom here in the past 20 years for instance.)

Realtor.com will give you the best idea of what houses are being priced at in your area. Let me say a few things about flipping before you jump in.I did a flip over the summer and while it will put a nice chunk of change in my pocket when it sells, I am shelling out over 1K/mo while it sits for sale. This is on a very cheap house. Dont forget when you're running your numbers to include the following AFTER it is on the market:Mortgage PaymentsGasWater/SewerElectricInsuranceProperty TaxesCredit Card payments (we put all purchases on 0% 1yr CC's)While I believe wholeheartedly this is a good move in the right markets (not last years boom markets), be sure you have not only the cash to purchase and rehab the property, but also to hold it while it sits for sale.Good luck!
Random,Just out of total curiosity. I know the winter is the Worst time to sell, and we are going into Spring with people moving and almost more importantly Tax refund checks for Down payments. I've been in your spot right now before, and went both ways on different properties with limited success either way. (I really can't say which was the better approach)How have you balanced out the (1) Pay whatever it takes now to hold it and wait for the buying season risking more to make more, vs (2) drop the price, stop the outgoing money, and make what you can make now, most likely making less money?That was the toughest decision I ever wrestled with. Would love to hear your thoughts out loud if you are comfortable sharing, if not, no pressure.
I dont mind sharing at all. Thanks for asking.So far its been like thisFSBO for about 4-6 weeks. I can count the number of phone calls on one hand and had no showings.Listed with my agent and while she's done a little better with showings, still no offers.I asked her about a month ago if a price reduction would help, and she said to hold off on that. She felt it was mor the season than the price/property.The money going out each month isn't a killer (its basically money we would be putting into savings) and to be honest I was and am prepared to hold until I get an offer I am happy with.That said, we are expecting our first kid in April and I really wont be comfortable holding the houst past then.
If you have any input on what you did/should have done, as always I would love to hear it.
I didn't want to say until you gave your thoughts. But for the record, I have been happier each and every time that I waited until spring. You have to get lucky to sell in the winter in out part of the country. For the record going forward, Winter is the best time to buy (Others drop prices in haste), and have your Flip ready to sell from Spring to Late summer at the latest. Your market is basically mine. Wait past the start of kids school here in our area of the country, and you are all but dead until Spring. You have to catch a break to get into escrow in the winter. Your Realtor is correct on this. Tell me about your Realtor if you get the chance. How long has She? be around, is she strong in the market? Hopefully it isn't your Wife's Cousins first listing.
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Hello,First time home buyer and had a question about mortgages. In the CT area, looking for a house around $250K and will put down about 6% for a downpayment. Was planning on a 30 yr fixed, (rates are around 6 with 1 pt right now) but I've heard more and more about these 80/20 and 75/25 mortgages (benefit being no $150 monthly PMI payment - tradeoff is higher rate on that second mortgage, maybe 8.5% I was told). If I plan on staying in this place for 5-10 yrs, which is the better route to go? I was just planning on getting the house re-assessed in a few years and then PMI would drop? Is there a calculator out there to work this out on my own?Thanks in advance for the help!

Pretty simple calculation, but basically don't do the PMI.I call it the "6 equals 6, and 7.5 equals 7" rule. The first number is an interest rate, and the second is the $ amount per $1,000 you borrow.Example:Buy a house using a 95% loan (5% down) at $263K - the first is $250K. 250 x 6 = $1500 for your payment at 6% (principal and interest only (PI), have to add taxes and insurance (PITI)). At 7.5%, you're at $1750.To get rates in-between, interpolate (average it out).For PMI, you're paying $100-200 that is NOT a tax writeoff. If you just have the higher rate that costs you about the same amount, you get to write off the $100-200 extra on your taxes, saving you $.If you did a 80-15-5, you'd have the same rate on the first (80%) as on the 95% loan, so it's a wash.The 15% would be say 1.5% higher (8.5 vs. 7), so that's about $1 more per $1K. In this instance, you're at about $40K for a 15% loan, so $40 extra. Take that deal and run, even if it is 2-3% higher.Good luck.
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How would one begin to do market research. I live in a rural type area where the towns are about 10-15k people. I am within 60 miles of 4 such towns. Anyway, I am looking to try to flip a house and wondering how I can get and accurate idea of the real market values in this area. The real estate values in other areas are much different (we never had any housing boom here in the past 20 years for instance.)

Realtor.com will give you the best idea of what houses are being priced at in your area. Let me say a few things about flipping before you jump in.I did a flip over the summer and while it will put a nice chunk of change in my pocket when it sells, I am shelling out over 1K/mo while it sits for sale. This is on a very cheap house. Dont forget when you're running your numbers to include the following AFTER it is on the market:Mortgage PaymentsGasWater/SewerElectricInsuranceProperty TaxesCredit Card payments (we put all purchases on 0% 1yr CC's)While I believe wholeheartedly this is a good move in the right markets (not last years boom markets), be sure you have not only the cash to purchase and rehab the property, but also to hold it while it sits for sale.Good luck!
Random,Just out of total curiosity. I know the winter is the Worst time to sell, and we are going into Spring with people moving and almost more importantly Tax refund checks for Down payments. I've been in your spot right now before, and went both ways on different properties with limited success either way. (I really can't say which was the better approach)How have you balanced out the (1) Pay whatever it takes now to hold it and wait for the buying season risking more to make more, vs (2) drop the price, stop the outgoing money, and make what you can make now, most likely making less money?That was the toughest decision I ever wrestled with. Would love to hear your thoughts out loud if you are comfortable sharing, if not, no pressure.
I dont mind sharing at all. Thanks for asking.So far its been like thisFSBO for about 4-6 weeks. I can count the number of phone calls on one hand and had no showings.Listed with my agent and while she's done a little better with showings, still no offers.I asked her about a month ago if a price reduction would help, and she said to hold off on that. She felt it was mor the season than the price/property.The money going out each month isn't a killer (its basically money we would be putting into savings) and to be honest I was and am prepared to hold until I get an offer I am happy with.That said, we are expecting our first kid in April and I really wont be comfortable holding the houst past then.
You need to creatively market and sell it.Put it on Craigslist.Print flyers and hand them out. Put them with mortgage brokers you know.If you can afford to sell it with Seller Financing, DO IT. If you don't what I mean, ask me. I've specialized in creative financing for years, and I'm a very good deal structurer.
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How would one begin to do market research. I live in a rural type area where the towns are about 10-15k people. I am within 60 miles of 4 such towns. Anyway, I am looking to try to flip a house and wondering how I can get and accurate idea of the real market values in this area. The real estate values in other areas are much different (we never had any housing boom here in the past 20 years for instance.)

Realtor.com will give you the best idea of what houses are being priced at in your area. Let me say a few things about flipping before you jump in.I did a flip over the summer and while it will put a nice chunk of change in my pocket when it sells, I am shelling out over 1K/mo while it sits for sale. This is on a very cheap house. Dont forget when you're running your numbers to include the following AFTER it is on the market:Mortgage PaymentsGasWater/SewerElectricInsuranceProperty TaxesCredit Card payments (we put all purchases on 0% 1yr CC's)While I believe wholeheartedly this is a good move in the right markets (not last years boom markets), be sure you have not only the cash to purchase and rehab the property, but also to hold it while it sits for sale.Good luck!
Random,Just out of total curiosity. I know the winter is the Worst time to sell, and we are going into Spring with people moving and almost more importantly Tax refund checks for Down payments. I've been in your spot right now before, and went both ways on different properties with limited success either way. (I really can't say which was the better approach)How have you balanced out the (1) Pay whatever it takes now to hold it and wait for the buying season risking more to make more, vs (2) drop the price, stop the outgoing money, and make what you can make now, most likely making less money?That was the toughest decision I ever wrestled with. Would love to hear your thoughts out loud if you are comfortable sharing, if not, no pressure.
I dont mind sharing at all. Thanks for asking.So far its been like thisFSBO for about 4-6 weeks. I can count the number of phone calls on one hand and had no showings.Listed with my agent and while she's done a little better with showings, still no offers.I asked her about a month ago if a price reduction would help, and she said to hold off on that. She felt it was mor the season than the price/property.The money going out each month isn't a killer (its basically money we would be putting into savings) and to be honest I was and am prepared to hold until I get an offer I am happy with.That said, we are expecting our first kid in April and I really wont be comfortable holding the houst past then.
You need to creatively market and sell it.Put it on Craigslist.Print flyers and hand them out. Put them with mortgage brokers you know.If you can afford to sell it with Seller Financing, DO IT. If you don't what I mean, ask me. I've specialized in creative financing for years, and I'm a very good deal structurer.
Good point on Seller Finance. I could offer you some thoughts within PMs if you are needing to sell immediately. As I stated before, I strongly believe your best money is to wait until March, but there are other options. PM either myself or Jeff. Either of us would be able to discuss some other thoughts. Honestly, Jeff would be stronger in this realm.
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Hello,First time home buyer and had a question about mortgages. In the CT area, looking for a house around $250K and will put down about 6% for a downpayment. Was planning on a 30 yr fixed, (rates are around 6 with 1 pt right now) but I've heard more and more about these 80/20 and 75/25 mortgages (benefit being no $150 monthly PMI payment - tradeoff is higher rate on that second mortgage, maybe 8.5% I was told). If I plan on staying in this place for 5-10 yrs, which is the better route to go? I was just planning on getting the house re-assessed in a few years and then PMI would drop? Is there a calculator out there to work this out on my own?Thanks in advance for the help!

Pretty simple calculation, but basically don't do the PMI.I call it the "6 equals 6, and 7.5 equals 7" rule. The first number is an interest rate, and the second is the $ amount per $1,000 you borrow.Example:Buy a house using a 95% loan (5% down) at $263K - the first is $250K. 250 x 6 = $1500 for your payment at 6% (principal and interest only (PI), have to add taxes and insurance (PITI)). At 7.5%, you're at $1750.To get rates in-between, interpolate (average it out).For PMI, you're paying $100-200 that is NOT a tax writeoff. If you just have the higher rate that costs you about the same amount, you get to write off the $100-200 extra on your taxes, saving you $.If you did a 80-15-5, you'd have the same rate on the first (80%) as on the 95% loan, so it's a wash.The 15% would be say 1.5% higher (8.5 vs. 7), so that's about $1 more per $1K. In this instance, you're at about $40K for a 15% loan, so $40 extra. Take that deal and run, even if it is 2-3% higher.Good luck.
:bag: Putting numbers to reality. I can't think of a situation where paying PMI (The *(^(*& YOU TAX) is less that a higher interest rate. I honestly have NEVER seen a case where PMI was the move to make.
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How would one begin to do market research. I live in a rural type area where the towns are about 10-15k people. I am within 60 miles of 4 such towns. Anyway, I am looking to try to flip a house and wondering how I can get and accurate idea of the real market values in this area. The real estate values in other areas are much different (we never had any housing boom here in the past 20 years for instance.)

Realtor.com will give you the best idea of what houses are being priced at in your area. Let me say a few things about flipping before you jump in.

I did a flip over the summer and while it will put a nice chunk of change in my pocket when it sells, I am shelling out over 1K/mo while it sits for sale. This is on a very cheap house. Dont forget when you're running your numbers to include the following AFTER it is on the market:

Mortgage Payments

Gas

Water/Sewer

Electric

Insurance

Property Taxes

Credit Card payments (we put all purchases on 0% 1yr CC's)

While I believe wholeheartedly this is a good move in the right markets (not last years boom markets), be sure you have not only the cash to purchase and rehab the property, but also to hold it while it sits for sale.

Good luck!

Random,

Just out of total curiosity. I know the winter is the Worst time to sell, and we are going into Spring with people moving and almost more importantly Tax refund checks for Down payments. I've been in your spot right now before, and went both ways on different properties with limited success either way. (I really can't say which was the better approach)

How have you balanced out the (1) Pay whatever it takes now to hold it and wait for the buying season risking more to make more, vs (2) drop the price, stop the outgoing money, and make what you can make now, most likely making less money?

That was the toughest decision I ever wrestled with. Would love to hear your thoughts out loud if you are comfortable sharing, if not, no pressure.

I dont mind sharing at all. Thanks for asking.

So far its been like this

FSBO for about 4-6 weeks. I can count the number of phone calls on one hand and had no showings.

Listed with my agent and while she's done a little better with showings, still no offers.

I asked her about a month ago if a price reduction would help, and she said to hold off on that. She felt it was mor the season than the price/property.

The money going out each month isn't a killer (its basically money we would be putting into savings) and to be honest I was and am prepared to hold until I get an offer I am happy with.

That said, we are expecting our first kid in April and I really wont be comfortable holding the houst past then.

If you have any input on what you did/should have done, as always I would love to hear it.
I didn't want to say until you gave your thoughts. But for the record, I have been happier each and every time that I waited until spring. You have to get lucky to sell in the winter in out part of the country.

For the record going forward, Winter is the best time to buy (Others drop prices in haste), and have your Flip ready to sell from Spring to Late summer at the latest. Your market is basically mine. Wait past the start of kids school here in our area of the country, and you are all but dead until Spring. You have to catch a break to get into escrow in the winter. Your Realtor is correct on this.

Tell me about your Realtor if you get the chance. How long has She? be around, is she strong in the market? Hopefully it isn't your Wife's Cousins first listing.

I'll start off by telling you she's is my aunt. She's been a realtor for 20+ years and is very well respected around here. She is really trying to move this property for us, and I truely believe she has my best interest in mind.

I would seriously consider owner financing (is this like land contract?) but like I said earlier we haven't had anyone remotely interested yet. Should I tell my realtor owner financing is an option? Would this really help much?

Right now, I'm planning on just keeping my fingers crossed until March/April which is when I will reevaluate the price and try to get the property moved. To date I only have 98K invested (including all utilities and everything, with less than 9K out of pocket) and it's listed at 134,700. I'm still pretty optomistic about the whole experience.

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Check into Countrywide. They have a fixed IO 10 year that coverts to a 20 year fixed at the same rate after 10 years. Zero down for a primary, 80/20. You don't even have to escrow taxes. Pound the difference into knocking out the 20% HELOC. Best thing is that money is available for other uses in an emergency.I have no affliation with Countrywide and their loan process is a pain in the ###.

Thanks for the help BassNBrew...a question on that 20% mortgage. Is that tied into a prime rate or just locked into a higher interest rate? The research I did shows for the 75/25 that the 75% first mortgage is locked in at a current rate (6%), but the 25% second mortgage is at a higher rate (8.5%). I guess what I'm asking is can that higher rate vary, even if it's a HELOC?Thanks again!
My Internet connection sucks. Nothing is worse than waiting some 30 minutes to get back on to type a responce. Yes I have no patience.Anyway, DO THE MATH, that higher interest rate will be less than PMI (The %^*%&^%^^(4 letter F word) YOU VERY MUCH tax) every time. Do the Math.

Hello,First time home buyer and had a question about mortgages. In the CT area, looking for a house around $250K and will put down about 6% for a downpayment. Was planning on a 30 yr fixed, (rates are around 6 with 1 pt right now) but I've heard more and more about these 80/20 and 75/25 mortgages (benefit being no $150 monthly PMI payment - tradeoff is higher rate on that second mortgage, maybe 8.5% I was told). If I plan on staying in this place for 5-10 yrs, which is the better route to go? I was just planning on getting the house re-assessed in a few years and then PMI would drop? Is there a calculator out there to work this out on my own?Thanks in advance for the help!

Pretty simple calculation, but basically don't do the PMI.I call it the "6 equals 6, and 7.5 equals 7" rule. The first number is an interest rate, and the second is the $ amount per $1,000 you borrow.Example:Buy a house using a 95% loan (5% down) at $263K - the first is $250K. 250 x 6 = $1500 for your payment at 6% (principal and interest only (PI), have to add taxes and insurance (PITI)). At 7.5%, you're at $1750.To get rates in-between, interpolate (average it out).For PMI, you're paying $100-200 that is NOT a tax writeoff. If you just have the higher rate that costs you about the same amount, you get to write off the $100-200 extra on your taxes, saving you $.If you did a 80-15-5, you'd have the same rate on the first (80%) as on the 95% loan, so it's a wash.The 15% would be say 1.5% higher (8.5 vs. 7), so that's about $1 more per $1K. In this instance, you're at about $40K for a 15% loan, so $40 extra. Take that deal and run, even if it is 2-3% higher.Good luck.
Thanks all for the help!! I had done the math out and saw in the long run it was the same, and I realized that no PMI was the way to go. So I guess my main concern was that 2nd mortgage being locked into prime rates. If I can lock in at that higher rate it's a no-brainer....This thread is great and it's much appreciated!
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Mike, do you use a software package to keep track of your props? If so, which one?

I saw Quicken Rental Prop Manager the other day. It was kind of steep for $100 and all it did was just track your expenses. I mean, I could get Q's Home and Business to do the same thing.

TIA!

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This one is screaming out to me for two reasons: one, it is a smoking hot deal, and two, it's almost too good of a deal for the other properties I can find.

1017-19 Sylvanie

Still right on 10th street downtown, but further south than a number of other things. Not huge south, but about 6-7 blocks. 4-plex with 2 ones, and 2 twos. At 46K for a brick 4-plex, this seems like a smoking deal, and it might be. What I would watch for is the heating. It states Gas heat. I wouldn't think it has 4 furnaces, so it is most likely Owner pays Heat, and most likely Electric and water. Paying for Tenants utilities is one of the very worst things you can do. ALL of your profits can be gone before you know it. Trust me, I made this mistake a few times. The worst one ever was when I bought a place that made lots of money on paper. End of the day, My best month in the first year was when we only lost $34.00 on the month. Oh, and the Inherited Tenants were seriously psycho. Some of the worst tenants we ever had, ever. Nothing is better than paying $34.00 out of your pocket on the BEST month for the privilege of having psycho tenants.

Let me know about the area right here, this intrigues me like there is no tomorrow.

Thanks for all the info and help, Mike! I've been out of the loop for a couple of weeks, so it's really nice to hop back on the board and find your posts. This one stuck out to me as well, and based on the price and area (it's close to our current property), it seems very similar to the current place we're in.

When we bought our current place, the owner did pay Gas and Water, and it had some ancient furnaces. We re-did the gas lines & dropped individual meters so the tenants now pay their own gas -- going from the owner paying a few hundred a month in utilities to the tenants paying them does wonders for the resale value. So I'll do some more research on this property first, and see if we can do what worked for us on the other property.

Thanks again for all your research!

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Mike, do you use a software package to keep track of your props? If so, which one?

I saw Quicken Rental Prop Manager the other day. It was kind of steep for $100 and all it did was just track your expenses. I mean, I could get Q's Home and Business to do the same thing.

TIA!

I wasn't going to get into this thread tonight, but I've been AWOL, and I can quickly answer this.

If you have a few Properties, just build your Own Spreadsheet. I was running 15 or 20 Units on an Excel Spreadsheet. Absolutely the way to go. If you have one or two, just do that.

However, as I got bigger, I looked into Software. I can tell you without a doubt that Quicken Property Manager is the Cheapest Software anywhere on the market, and I currently use it for my Empire. It is the Software I use.

When it first came out, it was bare bones like you wouldn't believe. I bought it when it first came on the market, and it did the basics, but really nothing else.

If you research available Software, you will find that most of them are a grand or more, with a "Key" to buy every year. You get soaked on Property Software.

So I bought Quicken Property Management for a $100.00 when it first came out. They have had 3 upgrades since then, and I have been able to upgrade for free each time. Best money I could have spent on Software.

I would say best money I ever spent as a LL, but that is Landlord Locks

The Software prints up every report I could need, and now tracks rents and tenants. Well worth the C-note. CERTAINLY if you start to price other options. There is no comparison.

But if you are only going to have a couple of properties, build your own Spread sheet in Excel, and customize it to your needs. Save the cash.

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This one is screaming out to me for two reasons: one, it is a smoking hot deal, and two, it's almost too good of a deal for the other properties I can find.

1017-19 Sylvanie

Still right on 10th street downtown, but further south than a number of other things. Not huge south, but about 6-7 blocks. 4-plex with 2 ones, and 2 twos. At 46K for a brick 4-plex, this seems like a smoking deal, and it might be. What I would watch for is the heating. It states Gas heat. I wouldn't think it has 4 furnaces, so it is most likely Owner pays Heat, and most likely Electric and water. Paying for Tenants utilities is one of the very worst things you can do. ALL of your profits can be gone before you know it. Trust me, I made this mistake a few times. The worst one ever was when I bought a place that made lots of money on paper. End of the day, My best month in the first year was when we only lost $34.00 on the month. Oh, and the Inherited Tenants were seriously psycho. Some of the worst tenants we ever had, ever. Nothing is better than paying $34.00 out of your pocket on the BEST month for the privilege of having psycho tenants.

Let me know about the area right here, this intrigues me like there is no tomorrow.

Thanks for all the info and help, Mike! I've been out of the loop for a couple of weeks, so it's really nice to hop back on the board and find your posts. This one stuck out to me as well, and based on the price and area (it's close to our current property), it seems very similar to the current place we're in.

When we bought our current place, the owner did pay Gas and Water, and it had some ancient furnaces. We re-did the gas lines & dropped individual meters so the tenants now pay their own gas -- going from the owner paying a few hundred a month in utilities to the tenants paying them does wonders for the resale value. So I'll do some more research on this property first, and see if we can do what worked for us on the other property.

Thanks again for all your research!

Scott,

When you are dealing with 1 and 2 bedroom units, don't forget about Electric Baseboard heaters. Sure, you have to upgrade the electric, but when you are talking about a 4-plex, doing a SINGLE $5-6K upgrade to break out the electric with Electric baseboard for every unit VS. 4 (FOUR) Furnances....

Do the math on your end.

I will say that being able to tell a tenant they have one bill, an Electric bill, no Gas bill has been huge for me with Downtown rentals.

I wouldn't necessarily make a 3 bedroom house all electric, and remember that Gas and Electric costs go in a cycle. 10 years ago, tenants were freaked at the concept of Electric Heat much like they are Freaked at the concept of gas heat now. At the end of the day, one bill only (Electric) for a tenant in a smaller unit is perfect.

I've converted say 20 units in just the last couple of years to electric only. It's been a slam dunk move for the past 3 years or so. And it cheaper on me that buying furnaces. Electric Baseboard just doesn't wear out, a Furnace will.

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OK, slow night, somebody throw me some Zip codes to look for Properties in

21771, 21701-04.
Bump for later
Wow, what's up with the 6% CAP rates on Commercial in Fredrick??? REALLY!?!?! Keep doing math, and that's what is coming back.Can't find anything commercial in the whole area that looks promising. Given the prices, it must be a flat out skyrocketing market, where people are buying just to get in before they are shut out forever.Only thing that might be promising is most likely something you wouldn't want. Nope scratch that, just came out to $230 a Sqft. Yikes.
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21771 is a washout, but you knew that. Looks like a fire hot market where you buy at whatever price just to get in. Will most likely continue. Anything you do here is a buy to hopefully ride to the crest and get out before the small slip and then it takes off again.

21701 Like the looks of two multifamilies. No matter how I turn the numbers, either of them loses say $1,500.00 a month to operate.

21702 Washout.

21703 Washout

21704 Washout.

I have to stop looking in your area. It's depressing, there is not one Money maker that I see from here. There are some interesting things, but you have to be so creative, it's not fun anymore. At least there was something to do some math on this time. Last time I ran those, there was nothing.

I wouldn't begin to try and find Flips in this market, that's your baby.

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This one is screaming out to me for two reasons: one, it is a smoking hot deal, and two, it's almost too good of a deal for the other properties I can find.

1017-19 Sylvanie

Still right on 10th street downtown, but further south than a number of other things. Not huge south, but about 6-7 blocks. 4-plex with 2 ones, and 2 twos. At 46K for a brick 4-plex, this seems like a smoking deal, and it might be. What I would watch for is the heating. It states Gas heat. I wouldn't think it has 4 furnaces, so it is most likely Owner pays Heat, and most likely Electric and water. Paying for Tenants utilities is one of the very worst things you can do. ALL of your profits can be gone before you know it. Trust me, I made this mistake a few times. The worst one ever was when I bought a place that made lots of money on paper. End of the day, My best month in the first year was when we only lost $34.00 on the month. Oh, and the Inherited Tenants were seriously psycho. Some of the worst tenants we ever had, ever. Nothing is better than paying $34.00 out of your pocket on the BEST month for the privilege of having psycho tenants.

Let me know about the area right here, this intrigues me like there is no tomorrow.

Thanks for all the info and help, Mike! I've been out of the loop for a couple of weeks, so it's really nice to hop back on the board and find your posts. This one stuck out to me as well, and based on the price and area (it's close to our current property), it seems very similar to the current place we're in.

When we bought our current place, the owner did pay Gas and Water, and it had some ancient furnaces. We re-did the gas lines & dropped individual meters so the tenants now pay their own gas -- going from the owner paying a few hundred a month in utilities to the tenants paying them does wonders for the resale value. So I'll do some more research on this property first, and see if we can do what worked for us on the other property.

Thanks again for all your research!

Your Market would be fun to operate in, lots of opportunity! :banned:
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How about 27282, 27403, etc.?My sincerest thanks, you guys rock.

There are no Multi-family properties for sale in 27282. There are 2-bedroom stand alones Starting at $55-60K, and very few of those. Can you rent a 2-bedroom most likely about 1K sq-ft stand alone for say $750+ a month in your area? If not, these won't work.What are you trying to accomplish? Rentals, I don't see much that works there unless you can get big rents. Flips? there is no way I could work out your market for flips. You really need to be at ground zero, and know the area. How big are we talking here for you?I can't find a single commercial/apartment complex/Office building/anything for sale in 27282 or 27403.MUCH, much better pricing in Greensboro on the small 2 bed/1 bath stand alones. Same question as above, what can you rent a small 2/1 house for in your area?
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21771 is a washout, but you knew that. Looks like a fire hot market where you buy at whatever price just to get in. Will most likely continue. Anything you do here is a buy to hopefully ride to the crest and get out before the small slip and then it takes off again.21701 Like the looks of two multifamilies. No matter how I turn the numbers, either of them loses say $1,500.00 a month to operate.21702 Washout.21703 Washout21704 Washout.I have to stop looking in your area. It's depressing, there is not one Money maker that I see from here. There are some interesting things, but you have to be so creative, it's not fun anymore. At least there was something to do some math on this time. Last time I ran those, there was nothing.I wouldn't begin to try and find Flips in this market, that's your baby.

Thanks anyway GB.Those were tough zips.
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More zips

03801, 2, 3 or 4

and/or

01950

and/or

04101, 2, 3, 5 or 6

03801-4: Best property is MLS ID#: 258506. I figure you only lose $500.00 a month to own it.

Newburyport, MA this is NOT an area to make money in.

Portland, ME seems to work. Check out

4-Plex

The property wouldn't do great with a 30 year fixed mortgage. Given the other areas you asked about, this place is a gold mine by comparison. It's not a Gold mine, just by comparison. There are other finance options that would make this a real money maker. Seems to be completely rented out/turn key. Beat that price down, it's awful close to break even with traditional financing. I am assuming that you would pay Water. If you pay all Utilities, this is a real dog in the short term until you can split them out.

There are a number of things in Portland that might work. The first two areas are a wash, I couldn't make money in them period with what is on the current market.

If Portland is a go area for you, take a few minutes and put down some thoughts on what you are looking for? What are you trying to accomplish, what kind of property? Basically give me more to go on and I would be happy to look in greater detail.

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If you want to swing for the fences in Portland, there are a NUMBER of extremely interesting buildings in the $700K-$1 Million range. Some with 10+ cap rates.

Is that an area you would consider? It looks like the best deals are large residential and Multi-use buildings. There is a surprising amount of opportunity in this area. Jeff might want to snoop around some of the commercial offerings in Portland if that is remotely close to anything he would work?

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