WHAT KIND OF BUYER ARE YOU?

Who am you?  

Let's start here.

Some reflection is required. What do you want? Who are you?

Are you an Owner-User?

Would it be that you want the rent from the 2nd unit to cover the mortgage? And you live for free? This is a really good goal and totally doable. You get grow equity for free over time and save your own pennies for the next property.

Maybe you want to live there and have a fun Air BnB project to make a little extra cash from and run as a side business?

Maybe you have a family member you want living side by side with you? 

If you want to live on the property and use part of the property for another reason, then you are an Owner-User. 

 Are you an investor?

Do you want to be a landlord? This means you will not live on the property. You will manage the property and the tenants and collect a return. You are doing this to make money.  You want to invest your money somewhere stable with long term growth. What does that look like?

Do you just want to break even? You figure the property is paying for itself, you will make money as the neighborhood grows, Your equity grows month over month and you don't have to do much. You want things easy and hands off. 

Maybe $500-1500/mo extra pocket money will make you happy. Making a little side money is icing on the cake. You are willing to do a little fixing up, but nothing major. 

Maybe you are all in, you want to attack the property and expect a 10%-12% return..  Ok. That’s can work too, you just have to be willing to take some risks and get your hands dirty with a deal. Good deals in these market are usually more creative, more risky and a little crazy, but doable and findable. They are not easy to come by or easy to achieve. That is what we personally aim for. But let me tell you, this is not easy and not for everyone.

What can you expect?

If you are buying a flipped property, or a turn key property, you can probably expect to break even or make about 2-5% on your investment. That would be realistic.  

You might also be able to find an already rented investment property that makes an ok return, but it's in good enough shape and you can just buy your way in. You inherit the tenants, they pay their rent and you just start collecting it. You can usually find something that makes about 2-5% in this scenario too

If you are buying a vacant property and want to rehab and rent it out… Then you are more likely to find a 6-8% return. This will require first finding a fixer and using additional cash to remodel it. It also requires smart purchasing to make sure the numbers pencil out in the end.

If you are buying a PROJECT with high potential to make a good return you will have to take on more. Maybe its fully occupied with long term low income tenants. Maybe it needs 100s of thousands in work.  You need a long term vision.  In this situation there might be major physical issues, city issues, tenant issues, weird issues, it probably requires cash lending or creative negotiating.  Usually when you find a higher return potential, it comes with a lot of twists and turns and a longer timeline. It could be years. These situations require vision, creativity, patience, confidence, bravery and a certain amount of faith.

You have to take into account YOU. 

-How much time do you have. Do you work?

-Whose going to do the work on this property? Will you manage it yourself or do you want a property manager? 

-If you are going to do a rehab, will you hire people or do it yourself?

-How fast do you want to make money? How hands on can you be?

More questions... more reflection.  Here is the good news. You don't have to know this. We can figure it out. And when we figure out what you want, are ready for and can handle, then we can get to work.