All Forum Posts by: Aroldo Villarreal

I found a home with whose ARV is $208k selling for $140k with about $15k or repairs. The owner is not interested in owner financing and is a burnt-out landlord with nightmare deadbeat tenants whom he kicked out. My question is, he doesn't have a realtor but I can get one to represent me. What are the steps to take in a situation like this? I'm very new at this. My plan is to repair and hold as a rental property. The rent comps came out to $1,300.

@Jay Hinrichs Thank you for your advice! I will try to resale it in one or two years, so it makes sense to fix it and transfer that warranty to the new owners. I don't want to lose tenants and have vacancies. Thank you again, you helped me make a decision!

I am working on a single family home in which the foundation repair is going to be $5,300. The seller agreed to reduce the price by $6k since he didn't know there were foundation problems. Every window and door opens and closes easily. There are no wall cracks and the floor feels level. I spoke to another investor and he said that it is difficult to find a level home in San Antonio because of the soil. He says he doesn't fix foundations in his rentals if the doors and windows work perfectly and there are no visible problems. He said there's a difference between the whole foundation settling and the foundation cracking, which I think makes sense, but don't have experience. What would you do?

@Andy Collins Would you happen to know if there's a place where I can find property tax percentages for different areas of the state? They seemed extremely low to me too, but I naively thought it was just the area it is in.

@Gautam Venkatesan You are more than likely right. It is a new home and that's probably why the taxes were so little since it more than likely was just an empty lot before.

@Ned Carey Oooooohhh, that makes sense. So equity is when you buy it and capital gains are when you sell it. I thought the terms were interchangeable.

@Ned Carey Yes, it is exactly what @Patrick L. said,I thought unrealized capital gains was the same thing as equity. My math was, I buy for $99,500, it is worth $102,300. I thought capital gains would be the difference between those two. Is that actually equity and NOT capital gains? I thought I knew what capital gains were.

@Jon Holdman @Dusty Corning Yes, you are right. I was assuming those were going to be my only expenses. Since it is a brand new house, I didn't think I would have that many expenses. Also, what does NOI stand for?

The Lifestyles Unlimited Realtor said it is a great purchase, that she would buy it if she didn't have her money tied up in another deal. But then again, as they say, never ask a barber if you need a haircut.

Thanks to everyone for all the help and advice, my brain is working a ton to store everything I'm learning!

Thank you for your help @Jon Holdman !

Here are the numbers that we generated:

Prop ins annual - $1,000

Prop Tax annual - $256

Down payment - 20%

Interest rate - 4.75%

W/ seller contribution of 4.5%

The rent to generate that cash flow would have to be $950 without at PM. (PM means property manager right?)

The appraised value would be $102k

Oh this would have helped. The price is $99,500. The seller is covering the closing costs since I'm going conventional. 3 bed 2 bath, 1 car garage. 1151 sq ft. I don't exactly know what this means, but it says 2yr and 10yr warranties applied. New appliances.

I'm looking to make my first deal, but don't know if I want to go with this one. It is $20k out of pocket with $5,148 of cash-flow a year and $2k of capital gains. I only have $50k to invest and am putting aside $800/month towards investing from my salary. My question is, the cash-flow is great for the San Antonio market, but the gains are not, is it still a good deal? I want to buy and hold. I know the typical motto is "You have to make money when you buy it." What are the cons and pros of a deal like this? Any input would help!

@Ned Carey I'm keeping the property as a rental, and am planning on waiting to see the capital gains. I tried attaching the document I used to do the math, but can't seem to know how to do it correctly. But anyway, the holding costs and interest were all included in the initial amount out of pocket. I'm hoping I don't need to add anything else. Also, I went to a workshop where they mentioned that if the rehab was more than $10k, not to do it. I don't know if everyone follows that advice.