All Forum Posts by: Aaron H.

If you're reasonably confident on the ARV and can afford to buy cash, do it. If you buy conventional up-front, you're still stuck with 20% down in the property long-term. So the only difference is a relatively meaningless 3/4 point interest rate bump? I'd rather take the shot at getting all the money back in 6 months.

Two signatures, but you should also get it notarized, because it's cheap and can only help.

The question isn't whether it's legally binding, it's what happens if one of you decides to sue the other. The boilerplate legalese you see in contracts isn't because the actual terms can't fit on a single page, it's because "what happens if you disagree about stuff" is complicated and you want some protections.

Plenty of attorney's will be happy to review your contract for a few bucks. If the deal is worth doing, it's probably worth crossing your t's. Alternately, you may be able to get a similar service on a site like legalzoom.

https://www.trec.texas.gov/forms-and-contracts

I think you'd be able to find a hard money lender that would work with you for this kind of purchase. Do enough research on the property to get them comfortable with the ARV and the price you're planning to bid on it. Then get them to put the bid money somewhere you can access it if you win.

Individual leases. Screen each tenant independently, hold a deposit from each. They don't know each other - if you try for a single lease, you'll be right back in the same boat when the next tenant moves out.

Deposit for damage to their room and 25% responsibility on damages to common areas. Give them an incentive to take care of it.

Click the "Store" link at the top of the page and buy BP's book on Note Investing.

50% rule is a first-pass filter for whether something is even in the ballpark. Never use it as the basis for an actual purchasing decision.

You need to calculate your expenses comprehensively and make sure you have a clear picture on the cash flow - I'd suggest using the BP BRRR or Rental Analysis calculators to make sure you're not missing anything. Based on your numbers, I'm skeptical of $500/m net cash flow...

If your ARV is 450K and you have a lender that will loan at 75% LTV, your loan amount will be ~335K.

Purchase + acquisition + financing = 105 + 225 + 17 = 347K. That leaves you with 12K in the deal. Where are you getting a 50K profit from?

Start by running the numbers through a comprehensive rental analysis calculator (the one on BP is great), and get a picture of what your real cash flow picture looks like after you account for *all* expenses.

I don't know what market rent is in your area, but if you have one or both units at below market value, you should definitely find a way to increase them.

But, my gut says this property is still going to struggle to cash flow. If both units were $600 you have $1200 gross. Very generalized rule of thumb, expenses usually land around 50% of gross rent. So you're down to $600.  Mortgage is $640, so you're at -$40/m. On the upside, 3.5% down means you don't have much cash in the deal, so even minimal cash flow might be an okay return if you can keep expenses low enough.

For a duplex in the midwest, I'd personally want $200/door net cash flow. Just my personal ballpark. But I can guarantee there's better deals to be had out there.

Bad. Your numbers don't account for repairs, maintenance, capex, vacancy, etc. That 223/month is going to evaporate in a hurry. If it's a good way to leave for relatively cheap, it's fine to hang on to without living entirely for free. In terms of cash flow on its own merits, you can do better in Ohio.

1) Not a lawyer, but in most states you can find the same forms your real estate agent would use. E.g. in TX, check the forms from TREC. It's not that hard, but if you've never done it and are nervous, it's not a bad idea to hire a realtor to walk you through it.

2) You pay a title company to research the title and get title insurance, same as if you used a realtor.

3) Not really - but like you said, guidance and knowledge are worth a lot. You can either get that from (a lot) of self-education, or just hire a realtor. If the deal isn't good enough to support a reasonable commission, it probably isn't really a deal.