All Forum Posts by: Michael Baradell

Not receiving rent during the rehab is a negative, but in my mind its only a short term problem. Having a completely renovated home that should require minimal maintenance after I have it rented out far outweighs the lost rent due to rehabbing. What formula or guidelines do you use when determining if a property would make a good rental investment?

I will be financing the full amount, rehab costs and all. So I am looking at the end product of basically purchasing a home for $75k which it's true market value is $90-$100k. Considering the size, it will go closer to $100k. Of course, if I were flipping, I would defiantly need a higher ARV but in this case I just see the $20K to $25k of equity as a bonus. I guess my question is, Is purchasing a property for $75k that needs no work different from purchasing a home for $25k that needs $50k of work? I understand the risk of having to control the rehab to make sure costs do not get out of hand and that it's done in a timely manner, but outside of that, I don't see the negatives. In this particular area, you can not purchase a home for this price that is completely finished so I feel I am gaining value by rehabbing the property to gain equity.

Thanks for the comment George. Whould you mind explaining how you came to that conclusion? Worse case scenario, I see the total carrying costs at $700-$750 with minimum rent at $1000-$1100. So, with those numbers I am figuring a cash flow of at least $250 a month, minimum. I am confident I will be able to rent it fairly quickly for $1100 however. Feel free to point out any errors. I would much rather learn of a mistake on BP vs the real world.

Hey all!! I have my eye on a 3/2 SF 1748 sqft. Details: home is completely gutted and will require $40-$50k in renovations. My target purchase price will be $20 to $25k. ARV will be around $90-100k based on most recent sold comps. I plan on holding the property permanently. The rental market is solid and I will be able to get between $1000- $1100 a month. Financing: 20% down on purchase price, 100% financing for rehab costs on a 12month interest only loan, will refinance after rehab is complete. I am not familiar with this type of loan so any insight will be helpful. Does this sound like a solid first property to the BP world? Thanks for any comments.

Thanks for the advice Mike. I will be setting up a meeting with my attorney to discuss an LLC. As for my first property, I think I have made the decision to go forward on my own. I'm starting small and I trust my knowledge of the market I will buy in so I really don't think I'm butting off more than I can chew. I just need to hold off my emotion and excitement so I can make a decision based strictly off the numbers vs an emotional decision about the property itself.

Thanks Josh. I actually feel the same way it's just tough taking that first step. I think I'm going to go for it on my own. I just need to trust the numbers and my gut. Any advice on setting up an LLC for my first property?

Hello BP world!! I would just like to officially introduce myself and post my first question! I am a Licensed Realtor in Louisiana. I service all of St. Tammany parish but I mainly concentrate in the Covington/ Mandeville markets. I feel I have come to know those markets pretty well and I feel they would be a great starting point for my real estate investing career as well. My desire to enter the real estate investing world has been one I've had for many years. Which is a big reason why I became a realtor in the first place. With that being said, here's a brief description of my plan. My plan is to be a buy and hold guy with the hopes of acquiring 5 homes in the next 5 years. I am not apposed to flipping, but for the most part my goal is to shoot for a solid monthly cash flow with with appreciation and building equity as a bonus. The issue I am having at this time is to whether partner up with people I trust, or to go at it on my own. I am going to start small regardless, but having a partner would obviously lessen any risks involved. Any advice on getting started would be greatly appreciated. Also, how would you structure a deal with a partner. For example, I will have the home financed in my name but he may provide the cash for down payment and rehab costs. If this is a hold property, how should this deal be structured. Thanks and I look forward to any and all comments.