Below are the goals copied from my post a few months ago. The updates are in red. I think we're doing ok so far!
These goals are on our must do list:
-- Re-finance Property #1 and pull out $10-$15k in capital - Done, but we only got 8.2k. Not horrible but a little less than we wanted. See previous post for details.
-- Shop our insurance around with a broker and make sure we're getting the best rate. - Done! Turns out we're getting a pretty good rate so we're staying where we are.
-- Add a 4th member to our LLC (my other brother who is almost out of college). - Done!
-- Adjust our monthly Contributions to go up by a total of $900/month over our current contribution level. - Done!
-- Purchase our first Multi Family Property(ies): - Still looking for that first purchase.
-- For a total of 4 units minimum.
-- A goal of $315/month cash flow per $100k spent**. - We'll see after we make that first purchase!
-- A total cash flow increase of $1,000/month (across new purchases). - We'll see after we make that first purchase!
These goals are on our "Nice to Have" list (in order of importance):
-- Refinance Property #2 for $10-$15k in capital. - No movement yet.
-- Purchase more Multi-Family property (above and beyond 4 units) - No movement yet.
-- If needed, package our 5 houses (or some combination thereof) and shop them around. - No movement yet.
-- A 1031 exchange is most likely necessary so we need to purchase a multi-family with the nearly $40k-$50k we’d expect to get from selling this package within 180 days. - No movement yet.
-- This could easily run into 2015. - Unsure yet, but most likely will.
Our main focus now is finding that first MRF purchase. I'll keep everyone updated!
Monday, March 17, 2014
Infinite Returns!
So one of our goals for 2014 was to re-finance the first property we ever purchased. While we had hoped for $10-15k back on that re-finance, it turned out to be $8.2k instead. The appraisal came back lower than we were expecting, but such is the life of SFR investing. Even though we've increased rent $200/month since we purchased in 2010, the appraisal in 2014 was actually 5k LESS than it was in 2010. Yes, we contested it, but it did no good. Again, no one wants to negate an appraisal in the SFR market nowadays. It's a good reason we're venturing into MFR's this year so we have some control over value. But I digress.
In 2010, we put $7k down on this property. We refinanced and just had $8,200 deposited into our bank account. what does this mean? We now have $0 invested in this property. In fact, we were basically paid $1,200 to buy this property (we just had to tie up some money for 4 years). You could even take a step further and say not only were we paid $1,200 to purchase the property, but we were given 15% equity as well.
This is commonly referred to as "infinite returns". It means the function that calculates cash on cash return now returns an error :). Sure it took 4 years to accomplish this, but it's a huge milestone for us. We now have a property returning a positive cash flow and we have absolutely no money invested in this property anymore. If anyone is looking for a reason to invest in real estate, here it is!
In 2010, we put $7k down on this property. We refinanced and just had $8,200 deposited into our bank account. what does this mean? We now have $0 invested in this property. In fact, we were basically paid $1,200 to buy this property (we just had to tie up some money for 4 years). You could even take a step further and say not only were we paid $1,200 to purchase the property, but we were given 15% equity as well.
This is commonly referred to as "infinite returns". It means the function that calculates cash on cash return now returns an error :). Sure it took 4 years to accomplish this, but it's a huge milestone for us. We now have a property returning a positive cash flow and we have absolutely no money invested in this property anymore. If anyone is looking for a reason to invest in real estate, here it is!
Subscribe to:
Posts (Atom)