Deal of the Day: Submissions Wanted!!!

Questions About BiggerPockets and Official Site Announcements 18 Replies

Hey BP!

BiggerPockets has created a new segment called "Deal of the Day" where we, BiggerPockets, will select a deal from this thread and analyze it for you LIVE!

The goal of this show is to help you analyze deals correctly. It is not to expose your deals.

In this thread just share the link to a property listing that you would like us to analyze! For now, we will only be accepting potential rental properties! BUY & HOLDS ONLY

Give a brief summary of who you are and what your goals are.

In order to be selected, we will need to know the following information: 

  • How much money do you have to put down/ invest?
  • Do you own any properties? If so, please provide details on that property (equity, mortgage, etc.)
  • Do you plan on house hacking?
  • What is the purchase price of the property? 
  • What are you projecting for rental income?
  • Expenses?
  • Repairs? Does it need work? Will upgrades increase rents?
  • How will you be financing the property? FHA, Conventional, other?
  • What do you need the most help with? Estimating expenses? Estimating rents?
  • Provide a link to the listing (if off market, please provide pictures or more numbers)

Please provide as much information as possible so we can accurately analyze your deal!

Lastly, this is not a thread for you to solicit your deals, this is purely an informational resource to help newbies/ beginning investors learn how to analyze deals. Any solicitation of deals will be removed immediately.  

Go to www.biggerpockets.com/videos to see all of the Deal of the Day's and more video content from BiggerPockets!

YouTube: https://www.youtube.com/biggerpockets

Facebook: https://www.facebook.com/biggerpockets

Medium fbprofileZachary Gwin, BiggerPockets | [email protected]

Three brothers just inherited a 60-year-old house worth about $36,000 as it sets. The home sits across the street from Clearlake Ca and is about 1000 ft.² My brothers and I want to restore the home to turn it into a B&B. With nothing owed on the property I'm sure we can qualify for whatever money is needed to restore the home. From what I see it'll be a full restoration including electrical the only salvageable piece of the property is the home structure. The landscape and drainage will also have to be redone. I can provide pictures upon request.

Exactly who was it that said you can't find cheap property / positive cash flow in California?

@David Cuellar, looks to me like it's worthy of investigating that idea further. Welcome to BP...

@Brent Coombs   you have to understand what the city of Clearlake is.. and then you would get the pricing.. Its where I cut my teeth and my dad was buying and selling half that town in the 60's  LOL.

it started as a recreation area for San Francisco folks.. and turned into a parole dumping city.

Very tough area for a little city High crime and low values.. Unfortunately

it sits on the largest natural lake in CA.. I was just there last Saturday going down memory lane.

to put it into context.. the city was platted in the early part of this century but the roads were never built.. just platted lots  Or showdown platts..  There were millions of lots created in CA during this time ... So there was no real orginized growth.. so even today over half the streets are still dirt roads. Also MH were allowed so a ton of old trailer trash.

Now there are high end areas of Lake co.. Lake frontage is 500 to over a million.. and there are some great wineries ( displaced the old pear and Walnut farmers) and Trophy ranchs.. Brassfield being one.

Its proximety to SF  3 hour drive and 45 minutes north of Napa and Santa Rosa has also created a bed room community of commuters who drive mountain  roads daily.

There are plenty of cheap areas in CA  this is simply one of them..  I suspect as a Airbnb if its where i am thinking it won't do all that great location is too hit and miss for the reasons I state above.

Medium ksqoekox 400x400Jay Hinrichs, TurnKey-Reviews.com | Podcast Guest on Show #222

Hello! Here is a current property that I have in mind to buy and then rent. It's not beautiful but my funds are limited, however my brother is my partner. I have NO real estate training and this would be my first deal (other than buying the house I currently live in). I would try to get them to take less but I feel like I could rent this for about $550 or $600 a month, based on the fact that my dad has a 1 bedroom apartment less than a block away with no garage and rents it for $550. What do you all think? It's in a school district that is most desired in this county--however, there is a registered sex offender that lives across the street and I'm not sure how that might hurt the renting of it? Advice would be great!

http://www.realtor.com/realestateandhomes-detail/107-S-2nd-St_Centerville_IN_47330_M46373-20183

@Jay Hinrichs , well, I guess Americans (I'm not one) only have themselves to blame for not making the most of the potential of such an area of natural beauty. Sadly, your description reads like it would equally apply to almost anywhere in the USA that happens to be located on "the wrong side of the tracks". 

I was aware of plenty of harsh environments and abandoned areas in California (eg. along the closed Route 66), but would not have expected such a logical location for million dollar hideaways to become ruined like that.

Still, if I'd inherited that house, I'd be inclined to want to keep it. After all, the lake is "across the street"! Cheers...

I love this idea! I'm new to RE investing, and fairly new to Bigger Pockets, so this will be a big help to me. I'm a licensed agent in the Houston area, and my husband and I plan on doing RE investing in our retirement. 

We would prefer a flip for our first project, and don't want to get too ambitious out of the gate. I've not yet connected with a good wholesaler, and not nearly ready to do a direct-to-distressed-owner strategy. Therefore, I'm wondering if it would be possible for us to make any money at all by picking something up off the MLS.

I've been eyeing a listing in an area of Houston where houses in good condition, in the $150K-$250K  range, go quickly and often with multiple offers. The subject property is 2,286 square feet, list price $218,900 ($95.76 sf), built in 1968. Sellers docs are available, so  I know there's a transferable foundation warranty, and plumbing has been updated. I learned from the neighbor that sellers moved away last fall. It's been on the market a couple of times, current listing 42 DOM. 

After viewing the property, it APPEARS to just need updating throughout (new kitchen, new flooring, update bath fixtures, remove paneling/wallpaper, etc.). I've not yet taken a contractor over. 

Could this be a potential flip for us if we could get sellers to take, say, $165,000?

I've run comps in this neighborhood, and I feel confident it could sell in the $120-$125/sf range ($275,000) if updated. 

We have a $150,000 LOC available with a private lender, and about $20,000 in cash in the bank.

Thanks!

Originally posted by @David Cuellar :

Three brothers just inherited a 60-year-old house worth about $36,000 as it sets. The home sits across the street from Clearlake Ca and is about 1000 ft.² 

Rather than hard or private money, you should traipe down to your local credit union and see about a HELOC (home equity line of credit). That will give you the rehab money and you will receive a reasonable rate.

If you borrow my money, I will want hard money interest, my money back in 6 to 12 months, and I will also want to collateralize more real estate.  I will also control your rehab, as it is my money you are using.

If either of you are 62, then there is another lucrative game changer. . .  

I have a deal that I've been negotiating for months with the seller. The seller owns 20 units across 3 buildings in the Port Huron, Michigan. 12 are 1bedroom/1bath, 6 are 2 bedroom/1 bath on 2 acres (possibility for expansion) and 2 2 bedroom/2 bath. He wants $580K for the 20 units. He is offering seller financing with 10% down 5.6%, 5 year balloon due, 30 year amortization. the current rents are total $8500 but we estimate that with value add the gross income could go up to $10,000/month.

Our biggest problem is that our equity is tied up in our current properties so I don't know how to put together the $58K plus the rehab funds to close the deal. Please help!!! :)

Medium arcadial pine logoDante Pirouz, Arcadial Pine LLC | [email protected] | 8108413705 | http://www.arcadialpine.com

My name is Bill Plymouth.  My goal with real estate is not only financial freedom, but ultimate security for me and my family.  I also have  brothers, one of which is  autistic.  I want to make sure that I can afford to take care of them, while I am here, and long after I'm gone.  I also want My assets to be able to take care of any future family as well.  (kids, grandchildren, nephews, nieces, etc.)

I do not currently own any property. If i buy, this would be my first. I do not plan on house hacking. I am looking at a 6 unit apartment in the North Philadelphia area. I want to put down less than 20%. I was thinking around $12,000. I read that the average PMI cost was around 65-70 dollars a month. Purchase price of the property is $500,000. I would hope to acquire it around $350,000. Projected rental income is 5,550/month or 66,600/year. Property is in decent condition. Only cosmetic work is really needed. I've calculated monthly expenses to be $4,616.12. I've also calculated a $400 utility bill. I honestly need the most help with calculating the expenses. I've looked at averages, but something tells me I'm far off. Thank you for your help!

here is the link to the property!  

http://www.loopnet.com/Listing/20385864/2359-N-Par...

got info on a 60k home saleing for 16k now. got good bones and a good roof . ask meif you want more details in oklahoma. good for rentail property.

Nice.  Is this still on going?

It is! @Vernalene Perez  

Tomorrow at 3 pm MST LIVE on our Facebook page :) - 

Medium fbprofileZachary Gwin, BiggerPockets | [email protected]

Deal: 10 unit package. 2 duplexes, 8 SF homes. All w/in 1 mile of each other near a military base.

Here is what the sellers property manager has told me:

8 of 10 units are currently rented.

package price = $615,000

total current monthly income = $6,670

GOI = $80,040

NOI = $62,6680

Cap Rate = 10.2%

Insurance = $3,075

Prop Mgmt = $8,004

Taxes = $6,281

Total Expenses = $17,360

  • How much money do you have to put down/ invest? 30%
  • Do you own any properties? Yes, but they do not affect this deal
    • If so, please provide details on that property (equity, mortgage, etc.)
  • Do you plan on house hacking? no
  • What is the purchase price of the property? $615k
  • What are you projecting for rental income? $6,670
  • Expenses? $17,360
  • Repairs? none planned at purchase 
  • Does it need work? surely work is needed. no estimates on hand.
  • Will upgrades increase rents? i am sure. but not to a great degree. (maybe 5%)
  • How will you be financing the property? FHA, Conventional, other? portfolio lender.
  • What do you need the most help with? Estimating expenses? Estimating rents? I am curious to get input on buying a package like this. i have previously only looked at purchase of one property at a time. Do you lump them all together into one analysis? or, would you break them into types or individual units? the market these are in is pretty flat. income would be cashflow. I do not anticipate appreciation of more than 2% over time and would anticipate regular turn over every 2-4 years on average.
  • Provide a link to the listing (if off market, please provide pictures or more numbers)

KS Agent # BR00223522, MO Agent # 2005006105

I'm mulling over an off-market cash deal. 

  • How much money do you have to put down/ invest? 546K
  • Do you own any properties? If so, please provide details on that property (equity, mortgage, etc.) Yes (320K equity, 0 mortgage). I want to sell it in exchange for the new.
  • Do you plan on house hacking? No
  • What is the purchase price of the property? 546K 
  • What are you projecting for rental income? 2400K/month
  • Expenses? 770/month
  • Repairs? Does it need work? Will upgrades increase rents? No/No/No
  • How will you be financing the property? FHA, Conventional, other? Cash
  • What do you need the most help with? Estimating expenses? Estimating rents? Estimating ROI
  • Provide a link to the listing (if off market, please provide pictures or more numbers)

Here is the output of the BP calculator. 

Monthly Income:
$2,400.00
Monthly Expenses:
$770.00
Monthly Cashflow:
$1,630.00
Pro Forma Cap Rate:
3.62%
NOI:
$19,560.00
Total Cash Needed:
$546,000.00
Cash on Cash ROI:
3.58%
Purchase Cap Rate:
3.62%

@Sophia Maler , the only way I see a deal here is if the real current MARKET value is say: $650k+

ie. On the face of it, 3.62% annual return for $546k cash is TERRIBLE! (Please, don't say "but what about appreciation?")

@Brent Coombs , I don't count on appreciation, I view investing into over-inflated SF bay are market as a huge risk. 

@Sophia Maler ......people have been saying that for decades 

The fact is SF is one of the most vibrant, beautiful and desirable areas in the world and will always continue to be. Combine that with the fact that the wealthy are continuing to quickly become wealthier, we're always going to see prime areas appreciate much more than non-prime areas. 

@Christian Wathne , I could probably find a house that will appreciate more because of the location (say Palo Alto) but I will have to borrow and the flow will become negative. Does it make sense to buy in a "hotter" area where vacancy will not be an issue... or in a "quieter" market with lower debt but with a risk of vacancy?