All Forum Posts by: Adam M.

With what @Michael Johnson there is nothing wrong with that, you are exploring your bids. Never do a deal with just one bid from a contractor. If the first guy is way over the other bids tell him you got other contractors and if he could come down to their level. If he can't and he can't provide good reason not to then he is wasting your time and you shouldn't use him.

I hope you have a clause in your contract that says you can walk if the financing falls through. Next time get 10-20% of the expected contribution of your partner upfront. If they won't do that they aren't good partners to have. If they do it makes them less likely to get cold feet later. Everything changes when people have to start writing checks.

Damn that is a lot. The big difference in list price vs appraised price appears good though. From the little bit I read that basically means you are walking in with more equity. Probably should do some more research into this.

I can probably only really answer #1 so here it goes...

No chance. Investment properties are a min 20% depending on credit and track record you may have to put up 25% plan for either. Higher down payment will only lower your IRR but also your payment (more monthly CF). Also start asking around to banks/credit union for terms. Some may only do a 5 yr note w/ 20 yr amortization. Also ask if terms change if they are lending to an LLC (or any other legal entity) vs a person. Even if they are lending to an LLC it is likely they will make you personally guarantee the loan. If you are short on a down payment you might think about buying a property that needs a significant rehab. You can look into using hard money. They tend to finance 75-80% of purchase price and 100% of reno cost as long as they feel that the ARV will be high enough. They usually offer 7-12% 12 month notes that you refi after the rehab. Sometimes you may have to wait 6 months for the note to 'season'. Some do offer 30 yr notes for the refi but you are gonna pay a higher rate than at a bank. But depending on the rate it may be comparable with a 5/20 loan.

Hope that helps.

Check out the BRRRR strategy

Property taxes still high. Like I said check the county records (likely online). Probably only $125/month. But again idk the tax rates down there. Also I would ignore cap rate since it is a SFH. If you are only slightly CF positive, i.e. $100-200, that isn't bad because w/ interest expense and depreciation you are gonna essentially "lose" money from a P/L standpoint but be CF positive. This means you would not pay any taxes on the income but I would for sure get an accountant that has RE experience.

Yikes. Would for sure of done an LLC. The second they had to come to the table to sign the legal docs and operating agreement they would of walked or tried to talk you out of it (both major red flags). Also would setup the bank account so you were the only one who could write the checks since you were fronting all the money and only paid the money directly to a (vetted) contractor.

Also I don't take to much stock in NPV as it relies on a somewhat arbitrary value for your discount rate. But it does a good job of showing you where you are gonna get most of the cash from.

Hard to know without more context. Could put in an offer slightly below list to get the ball rolling and nitpick your way down some more. Make sure to get the current rent contracts and also in the sale contract itself make sure you have a clause guaranteeing the accuracy of the rental contracts. Don't want to buy to later find out a tenant has some off the books deal for lower rent.

I would say next time have last months rent + deposit but you bought directly from them at a big discount. Hope you collect first + last + deposit on all your others. Would not waste time going after them. Just more money to lose. Clean up and rent.

To find the actual NPV of all the cashflows you would use the NPV function over the totals for years 1-10 and then add the (negative) down payment back in since you wouldn't discount your initial cash outlay.