Ashley:
Welcome back to the Real Estate Rookie podcast where we tackle the real world questions. New and growing investors are asking every day.
Tony:
And today’s episode is proof that no matter where you are in your journey, whether you’re closing on your first deal or managing 20 plus units, real estate brings new challenges at every level.
Ashley:
We’re breaking down three powerful questions from rookies at different stages, including if you should buy a property with a friend. What happens when one tenant wants to vacate and the other wants to stay? And lastly, some feedback from an investor who was a guest in an Airbnb that felt DI am Ashley Kehr.
Tony:
And I’m Tony j Robinson. And with that, let’s get into today’s first question. So this question comes from Jason in the BiggerPockets forms. He says, I live and work in LA and currently pay $2,750 per month in rent. I have $80,000 saved up and want to buy a fourplex and live in it so I can stop renting. I have my VA home loan to use as well. I make a bit over $200,000 a year. My plan is for me and a friend to go in on one together, I’d own 75% and he’d own 25%. We would put down 5%. The ones I’m looking at are between 1000001.5 million. And most have four two bedroom, one bath units in the area that I’m looking for. I could probably rent them out for 2,500 to $3,000 each. My friend would live in one unit, his 25%, and I’d live in one unit.
Tony:
Rough estimates put total monthly costs at around $9,000 per month. So each unit would need to pay 2250 to cover it. That’s how much me and my friend will pay. And the $500 per month I’d be saving on not renting anymore, along with the extra rent I bring in from the tenants will all go into fund to cover emergencies and vacancies. I start that fund with 40 k to put aside initially looking for your opinions. And for context, my friend is also my business partner in a business. I also own majority ownership. So this wouldn’t be our first…