Finding the first deal

Hello my 1 follower.

My partner and I are just starting out investing in Alaska with very little experience. We both have owned two properties independently in other states focused on a buy and hold strategy. to make a long story short, we are both in the Army and ended up in Fairbanks, AK. We have decided that we need to continue our investing as well as our education while we are here.

The area is unique in the different obstacles we must face. Permafrost is a real concern, and many houses of sunk and been condemned. The extreme cold is another issue, with temperatures dropping below negative 40 every year. The last large obstacle is the difficulty to get building supplies shipped up here at a decent price. The cost of living is comparable to Hawaii just without the beach!

So what are we doing up here? We have a fairly simple plan to begin our company for the next 18 months. The first step is to find a house at a steep discount that needs considerable work. Once we have purchased the deal for cash we can begin the real strategy. Our unfair advantages comes from my 10 years working construction for my father who was a general contractor. He is now retired, and incredibly bored, which translates into a mentor willing to come and teach for the price of a plane ticket and 1 month of room and board. The plan is to fix up the house and then take out a HELOC against the property to use as collateral for multi-family buy and hold properties. In the mean time the original property will be rented at almost twice the HELOC repayment amount.

Please comment on what you think. To answer a couple of questions many will have prior.

1. Average rents for 3/2 houses are $1,500-$1,650 a month which includes all utilities except electricity. Heat is included because there are many cases of tenants leaving and not paying heat and the entire house freezes in hours when it is negative 40. The cost of new plumbing/water base board is ridiculous to replace.

2. Purchase price of house will be around $60,000, repair cost $55,000 and the ARV $170,000-$185,000.

3. Both have credit scores 760+ with considerable liquid assets to utilize if needed.

4. Rental market is fairly robust. With two military bases, a strong economy from the oil fields, and a University. Conservative estimate of 90% occupation rate. Probably be higher but we want to make sure we are not stretching our numbers to make the deal.

I appreciate any comments and follows/

J. Strong