All Forum Posts by: Arron Paulino

 I appreciate your response. That is what I am uncertain about but know I have to be prepared for it in terms of the hidden costs beyond the external fixes for the property. I think hiring a trusted contractor is my next step in getting actual numbers to see if the deal is worth pursuing or not. It will help alleviate stress and help me ease into finding the right fixer upper that is worth the time and money to invest.

 Thanks for your reply. That is what I was thinking. I'll stick to the numbers and trust my gut. 

I figured that would be the case if something comes up to have a buffer for extra expenses.

I am wondering what is a typical budget for a live-in flip. I am planning on buying a primary residence that I can get as a decent fixer-upper. It can be move-in ready and could use some TLC to increase the value of the home. What is a good strategy to use to reduce the list price when negotiating for a new home? One I know is days on the market but I would like to know a strategy more in terms of the work needing to be done on the property.

What is the typical rehab budget for a full gut versus a fixer-upper that needs some updating such as for the kitchen, bathroom, new carpet, roof, and/or driveway for example? Let's say the home is listed at $500k for easy math and homes newly renovated are worth $800k. My mind imagined it being $50-100k even at most. Would $50k be a decent budget to renovate a good chunk of the home? Would $100k be more than plenty to do an even greater job at making the home very much improved? I'm sure I would need a private/hard money lender before being able to refinance the property with a conventional lender to obtain funds for the home. Would a local credit union/bank be able to support this at purchase and/or once the rehab is completed? I would plan to put in a 5% down payment on the home.

My goal with this is to buy a cheaper home first, fix it up, and roll equity from that for the next big house/goal "dream" home in the future. Or this could end up being the dream home after all rehab is completed who knows?

 Makes sense. Thanks for the reply!

I am thinking about moving into a new home in the Bay Area and just got pre-approved for up to $800k conventional financing not FHA due to me owning rentals. I will probably only be budgeting to use up to $600k to be safe, which I know will be tight depending on what location is selected. I will be moving from the peninsula area of the bay to somewhere in the East Bay to a more affordable area (Possibly Hayward area or as far east around Antioch). The type of home that we've looked into is a condo (I am not a fan of HOA dues), apartment, new construction (ideal, but will this have equity in it later on?), or single-family home (open to finding one that needs to be rehabbed to build sweat equity). What should I be looking for? We've got stable W2's and good credit.

I do own OOS rentals that I acquired over the past few years. I am planning to liquidate a couple to put into the down payment. It is possible with finding a SFR I'd stay a few years and consider either keeping it as a rental or selling it and moving into another home.

What should I do in my scenario with the information given here? Thanks!

 Thank you for the reply. My PMC suggests lowering the rent but it will be below market and less than what it had rented for before the previous tenant had it rented.

That's a good stat to know.

They currently have them marketed on their website and on the MLS sites. I have seen them so it's legit.

Not as often as I'd like since I am always following up on my own. They just say something via email without much context.

That is a good point so I can better understand what will get the ball rolling. I will follow up with PMC to see what action steps we need to take to get these rented. Otherwise, I am going to really consider selling them off to do something else.

 I appreciate your response. I've noticed that is the case and they haven't really been making effective moves in getting the properties rented any time soon. I would've expected it to be a good time to rent due to the season. Do property management companies usually have high portfolio minimum balances and upkeep expenses for properties? That's a good tip. I am surprised it is still sitting on the market when the rental rate is on par with the market. I am leaning towards liquidating so I can go into other ventures. Thanks for your time and clarity.

How long do you typically wait for a rental property to sit on the market before considering selling it? I have a property that has been on the market for over three months now without receiving a qualified tenant and I may want to sell it to get some liquidity.

It has also been hard to receive monthly profit for myself since my property management has a portfolio minimum of $2k until they allow me to take home proceeds at the end of the month. I get charged 10% on property management per rented property, lawn maintenance and service utility on the properties not rented, and miscellaneous expenses on little things that pop up for maintaining the properties. I currently have 4/7 properties rented out and 3/7 still on the rental market. One of those 3 I may be a little more patient with while the other 2/3 I am considering just liquidating.

I appreciate the thoughts on this!

 Thanks for commenting! Essentially, I am looking to take care of my properties early on rather than dealing with the problem later on. This, I believe, will lead to tenants seeing that I care not only for my property but also for their living conditions. I see these properties as places I'd want to stay long-term even though they may be just rentals.

I will look into attending my local RE meetups as I can understand what other investors go through and seek advice from other couples who invest.

 Thanks for sharing advice! That is now my plan as I am liquidating the "losers" in my portfolio and working on building up my reserves to properly invest in the next investment.