Honestly, you are Sooooo Great at explaining, and more importantly you're to the point and from the heart , you're Truly Awesome ! Please, would you be interested in being my Mentor ? I heard you say in one of your videos that you weren't doing that anymore or at least not in New York ( the monster lol ) I live in Montreal - I have one rental property here and planning for my next purchase in Vancouver where my Mom and brothers live. I would sooooo Appreciate your Experience and Guidance with decisions in choosing small multi unit home ( starting with a duplex ) for my family of 4 ( husband and 2 kids ) . The plan is to move there, rent one out and live in the other one for about a year until our next purchase is possible. I also heard you say in your videos that you're travelling through the States with your husband looking for your next purchase - I hope you have time to reply. I know I'm just a Newbie coming out of nowhere but I was about to pay Riley Oickle to Mentor me yesterday when you popped up and I'm hooked on your videos - sooooo much better than all the rest. We are similar in the way you talk and explain things - I want to wait for your reply before I choose my Mentor - crossing my fingers really Hard that you will be interested and messaging me.
👏🏾👏🏾👏🏾👏🏾 Freaking awesome breakdown April!! Thanks soo much!! I was just presented with an amazing opportunity [just like this] to possibly purchase a Triplex in a topnotch neighborhood. While listening to my neighbor, she said the magic words "I can't afford repairs on this building" and "how do I sell and cut my losses- this buildingis a headache" To me what I heard was "seller financing " and "winwin" for everyone! Lol The Triplex is "Free and Clear‼" April I cannot tell you HOW MUCH I Appreciate this breakdown🙏🏽🙏🏽🙏🏽 I appreciate your time and dedication to educating your followers!! I'd love to submit this deal to you to ensure I fully understand the opportunity in front of me and that I'm making a fair offer on this AS-IS property in the highly sought after historic neighborhood. [Btw: one just SOLD AS-IS up the street for 400k] [Once updated it will sell for 700k+]🙌🏽🙌🏽
This one's really handy because you can do a "quick and dirty" cap rate calc to see if it's even in the ballpark. I actually used it for a 2-unit, just for giggles to see how it stacks up.
just a standard number.. BUT...you can ask brokers, agents and lenders in your area what the average vacancy and maintenance expenses is for that area. For lower income areas I use a higher vacancy (usually 7% for my area)- bc I have more turn over. And for areas with older buildings I use a higher Maintenance amount (usually 12-15%) bc the buildings are older and typically require more maintenance.
April can you break down the ''a', 'b', 'c', categories that small (under 16 units) sometimes state. I get it's for area but is 'c' bad if you can get long term tenants?
in my area, city sewer is 2X water bill. Is lawn care part of maintenance? In your analysis shouldn't finance amount change because down payment changes?
Hey April, I'm a new subscriber here - been watching your videos and I really like them. You do a great job of explaining important concepts in REI. Looking forward to following you here and on insta
Hi April, I hope all is well. I just recently came across your channel and subscribed because of the wealth of knowledge in you vids for future RE investors like myself. Furthermore, can you please described in detail "infinite returns processes" 11:53 on this video. Thank you!
Hi April 🙂 I'm sorry, but I am confused with the 10% down you would offer the seller. Seller's price is $236,200. Yet, you say to offer 10% of 188,960 (20% of 236,200) because of the planned cashout refi in 60 months. Are you assuming that the seller's gonna go down in their asking price down to $188,960 ? Shouldn't you be offering 10% of 236,200 ($23,620) and the seller finance/amortisize the difference of $212,580 ?
I would love some advice. I just bought a home in a poverty area last year. I have been renovating it and it's going to be finish this month. I would like to rent it out now but with the economy and now they are burning and looting neighborhood store maybe I should wait til it gets better? This is my first time renting a house.
@@waledada6552 I'm in Philadelphia. That's a good idea. I will continue contacting section 8. With the virus it's been hard to get info from them. Thank you.
I am super close to you- about 1.5 hours northwest of Philly. Pains me to see what is going on there. I like the suggestion of contacting section 8. I can tell you that in our low income area, demand is higher than ever!!! As inflation happens and the economy gets tougher... more people need affordable rentals. You will have NO problem renting it whether you go section 8 or not. Just screen, screen, screen for quality. In a lower income area I sometimes go through 25-50 applications until I get someone qualified that passes all the screening as opposed to 3 applications in non-low income areas (true numbers, I tracked it one time)
people are paying ridiculous prices and I love buying bigger things and private lending more than I love owning single family rentals. So for me its a quality of life/true financial freedom choice
not if you are conservative and structure appropriately. Obviously it is hard for anyone to say what bank financing would be 2-5 years down the line when you refinance, but I've never seen rents go down. So as long as you are raising rents appropriately and maintaining your building and being conservative when you run numbers on the front end before even doing the seller fi... you will be ok :)
Hi April. Super great content! For the balloon payment (assuming they wanted $236,200), curious why you chose to pay seller the asking price ($188,960) versus the principal owed after 5 years. For example, wouldn't the total net to seller then be $156,167 (Prin Bal) + $40,880 (Cumm Int) = $197,047? Did you do this so that you can get the seller the asking price they were targeting (i.e. close to $236,200)? Also, if your total to the seller was the $188,960 plus the 5 years of interest, when you refi - wouldn't you have to come to closing with additional money out of your pocket. For example, if you refi at 75% of $236,200 that would be $177,150 and that means you're short $11,000ish versus if you gave the principal balance, you would have cash back of approx. $7k. Sorry for all of the questions, just trying to follow the numbers.
Hi Jerome! Thank you for dropping the link below to the amortization schedule for someone! I appreciate you! To answer your questions - at the end of the 5 year balloon I want to get them their asking price or above to make it worth their while to wait 5 years to get that price. If you plug the numbers into the amortization schedule, it will show you at the end of 5 years what your balance is in the very right hand column. So if you seller finance $170,064 at 5% on a 20 yr amort. you will owe a balance at the end of 5 years (60 months) of $141,926. Now we are 5 years down the line from when the property was purchased. So your rents should be higher than when you started which plays a MAJOR factor in how much a 4 unit is worth. BUT.. lets be conservative and say its still worth $236,200, 70% of that is $165k and we only owe the seller a balance of 141k :)
What I understood it to be....Banks won't loan full value so typically 70-75% Loan To Value. You have to assume that 20-25% of the assessed value will remain in the loan so that there's some skin in the game but it will remain as equity and you can get a loan for the remaining 70-75% on the refi. If thats what you were asking
Thanks for watching. Feel free to leave comments or questions below and I'll do my best to respond :)
Honestly, you are Sooooo Great at explaining, and more importantly you're to the point and from the heart , you're Truly Awesome ! Please, would you be interested in being my Mentor ? I heard you say in one of your videos that you weren't doing that anymore or at least not in New York ( the monster lol ) I live in Montreal - I have one rental property here and planning for my next purchase in Vancouver where my Mom and brothers live. I would sooooo Appreciate your Experience and Guidance with decisions in choosing small multi unit home ( starting with a duplex ) for my family of 4 ( husband and 2 kids ) . The plan is to move there, rent one out and live in the other one for about a year until our next purchase is possible. I also heard you say in your videos that you're travelling through the States with your husband looking for your next purchase - I hope you have time to reply. I know I'm just a Newbie coming out of nowhere but I was about to pay Riley Oickle to Mentor me yesterday when you popped up and I'm hooked on your videos - sooooo much better than all the rest. We are similar in the way you talk and explain things - I want to wait for your reply before I choose my Mentor - crossing my fingers really Hard that you will be interested and messaging me.
I'm using my husband's computer , Jean-Pierre - My name is RIta :)
@@jean-pierremagar2264 sorry I missed this. Would love to see you join my next 5-day challenge www.aprilcrossley.us/kickstart
👏🏾👏🏾👏🏾👏🏾 Freaking awesome breakdown April!! Thanks soo much!! I was just presented with an amazing opportunity [just like this] to possibly purchase a Triplex in a topnotch neighborhood. While listening to my neighbor, she said the magic words "I can't afford repairs on this building" and "how do I sell and cut my losses- this buildingis a headache" To me what I heard was "seller financing " and "winwin" for everyone! Lol The Triplex is "Free and Clear‼" April I cannot tell you HOW MUCH I Appreciate this breakdown🙏🏽🙏🏽🙏🏽 I appreciate your time and dedication to educating your followers!! I'd love to submit this deal to you to ensure I fully understand the opportunity in front of me and that I'm making a fair offer on this AS-IS property in the highly sought after historic neighborhood. [Btw: one just SOLD AS-IS up the street for 400k] [Once updated it will sell for 700k+]🙌🏽🙌🏽
Super glad I've stumbled across your channel, great insight and your strategies are very similar to mine
SUPER helpful, April! Thank you -- I've never even considered doing that before (seller financing with a refinance down the road). I love this!
Excellent expenses break-down. Thanks!
Thank you, you really teach how to do things when you are starting in the real estate business
Great content April! Thanks for sharing.❤️
This one's really handy because you can do a "quick and dirty" cap rate calc to see if it's even in the ballpark. I actually used it for a 2-unit, just for giggles to see how it stacks up.
Awesome video! Just started watching your content and I’m learning a ton. Question, are CapX and maintenance the same expense? Thank you
capex is for larger items like: roof, windows, heating system :)
Great video ❤️
Where or how did you get the vacant number of 5%? Also with maintenance? Thnx in advance!
just a standard number.. BUT...you can ask brokers, agents and lenders in your area what the average vacancy and maintenance expenses is for that area. For lower income areas I use a higher vacancy (usually 7% for my area)- bc I have more turn over. And for areas with older buildings I use a higher Maintenance amount (usually 12-15%) bc the buildings are older and typically require more maintenance.
@@aprilcrossley thnx for the response 🙏🏼
Is there a way I can get a copy of the document you used there?
I missed you April 🤷🏽♂️🙌🙌💯💯👊👊
Another good vedio! Thank you April!
April can you break down the ''a', 'b', 'c', categories that small (under 16 units) sometimes state. I get it's for area but is 'c' bad if you can get long term tenants?
in my area, city sewer is 2X water bill. Is lawn care part of maintenance? In your analysis shouldn't finance amount change because down payment changes?
Hey April, I'm a new subscriber here - been watching your videos and I really like them. You do a great job of explaining important concepts in REI. Looking forward to following you here and on insta
Hi April, I hope all is well. I just recently came across your channel and subscribed because of the wealth of knowledge in you vids for future RE investors like myself. Furthermore, can you please described in detail "infinite returns processes" 11:53 on this video. Thank you!
Good video I thought it was just me having these issues.
How about reserves, turnover, advertising and miscellaneous? Also, what percent of GOI are the expenses?
Hi April 🙂 I'm sorry, but I am confused with the 10% down you would offer the seller. Seller's price is $236,200. Yet, you say to offer 10% of 188,960 (20% of 236,200) because of the planned cashout refi in 60 months. Are you assuming that the seller's gonna go down in their asking price down to $188,960 ?
Shouldn't you be offering 10% of 236,200 ($23,620) and the seller finance/amortisize the difference of $212,580 ?
Its probably a stupid question, but why wouldn't you put down the "mortgage payment" as an expense?
What happens if you do seller financing and the seller passes away? How do you eventually get the title of the property if the Lender is deceased?
The title should be transferred to you. As far as payment management goes after that, I am not sure.
What's the link for the amort cal?
bretwhissel.net/amortization/amortize.html
I would love some advice. I just bought a home in a poverty area last year. I have been renovating it and it's going to be finish this month. I would like to rent it out now but with the economy and now they are burning and looting neighborhood store maybe I should wait til it gets better? This is my first time renting a house.
What market are you in? Have considered contacting your HCV/Section 8 office to see if they have qualified tenants that can move in quickly?
@@waledada6552 I'm in Philadelphia. That's a good idea. I will continue contacting section 8. With the virus it's been hard to get info from them. Thank you.
I am super close to you- about 1.5 hours northwest of Philly. Pains me to see what is going on there. I like the suggestion of contacting section 8. I can tell you that in our low income area, demand is higher than ever!!! As inflation happens and the economy gets tougher... more people need affordable rentals. You will have NO problem renting it whether you go section 8 or not. Just screen, screen, screen for quality. In a lower income area I sometimes go through 25-50 applications until I get someone qualified that passes all the screening as opposed to 3 applications in non-low income areas (true numbers, I tracked it one time)
If leverage is great, can you comment on why you would be selling right now? Isn’t that de-leveraging?
people are paying ridiculous prices and I love buying bigger things and private lending more than I love owning single family rentals. So for me its a quality of life/true financial freedom choice
When you refinance do you end up with a mortgage sometimes that is too high to cash flow?
not if you are conservative and structure appropriately. Obviously it is hard for anyone to say what bank financing would be 2-5 years down the line when you refinance, but I've never seen rents go down. So as long as you are raising rents appropriately and maintaining your building and being conservative when you run numbers on the front end before even doing the seller fi... you will be ok :)
Hi April. Super great content! For the balloon payment (assuming they wanted $236,200), curious why you chose to pay seller the asking price ($188,960) versus the principal owed after 5 years. For example, wouldn't the total net to seller then be $156,167 (Prin Bal) + $40,880 (Cumm Int) = $197,047? Did you do this so that you can get the seller the asking price they were targeting (i.e. close to $236,200)?
Also, if your total to the seller was the $188,960 plus the 5 years of interest, when you refi - wouldn't you have to come to closing with additional money out of your pocket. For example, if you refi at 75% of $236,200 that would be $177,150 and that means you're short $11,000ish versus if you gave the principal balance, you would have cash back of approx. $7k.
Sorry for all of the questions, just trying to follow the numbers.
Hi Jerome! Thank you for dropping the link below to the amortization schedule for someone! I appreciate you! To answer your questions - at the end of the 5 year balloon I want to get them their asking price or above to make it worth their while to wait 5 years to get that price. If you plug the numbers into the amortization schedule, it will show you at the end of 5 years what your balance is in the very right hand column. So if you seller finance $170,064 at 5% on a 20 yr amort. you will owe a balance at the end of 5 years (60 months) of $141,926. Now we are 5 years down the line from when the property was purchased. So your rents should be higher than when you started which plays a MAJOR factor in how much a 4 unit is worth. BUT.. lets be conservative and say its still worth $236,200, 70% of that is $165k and we only owe the seller a balance of 141k :)
@@aprilcrossley thank you for the great explanation!! The lightbulb suddenly went off and am completely following now.
How much cash on cash return was this
which one - traditional loan or owner finance? why can't you just divide NOI / Cash invested?
Hey April 🤗
I may have missed this, but why are you using 80% of the value when doing the calculation and not the full value?
What I understood it to be....Banks won't loan full value so typically 70-75% Loan To Value. You have to assume that 20-25% of the assessed value will remain in the loan so that there's some skin in the game but it will remain as equity and you can get a loan for the remaining 70-75% on the refi. If thats what you were asking