All Forum Posts by: Becky Farnsworth

@Nathan Christensen

PITI - principle, interest, taxes, insurance

COC - cash on cash

cap rate - rate of return on your real estate investment = net operating income / current market value

@Sam Newell Very cool!  Meridian is a great area! We have 3 houses in Meridian and 1 in Boise. There is so much land around here, but its amazing how hard it is to find a good lot.  Meridian is getting expensive and the market is very competitive. With that being said, I don't know of a lot specifically, but I know I have seen them.  Good luck with your search!

I would look into inventory levels and vacancy levels in your area.  I live in the Boise, Idaho area and our inventory is low and rentals are in high demand.  We have owned one of our rentals for over 7 years and  it hasn't been vacant for more than 10 days total.  Its always good to be conservative in your numbers, but 10-15% seems high to me.  However, if you can save that much extra per month, you will have plenty if disaster strikes. Other than that, your numbers look pretty good.  Good luck with your first rental property!

I agree with Lee that there is so much involved in flipping. That is what my husband and I really want to do some day as well. However, we started small. We are currently buying our third rental property and have owned rentals for 7 years now. We lived in the first one, fixed it up, then bought a new house and rented that one out. Then we bought our second rental 2 years ago and completely renovated it just like we would a flip, only we didn't sell it. We bought it off the MLS so the deal was good, not great. After paying $15k in realtor fees and closing costs, if we had sold it we would have only made $5-10k. We chose to hold it and now the house is worth about $50k more than we bought it for, and we have been cash flowing around $500/mon on it. The one we are buying now is a similar situation. I'm just saying that starting small isn't a bad thing. I feel 100% confident that we can buy and flip a house now, if the deal presented itself, and do well. When I first wanted to be a flipper 7 years ago, I would have failed miserably if I just dove in. Learn all you can and maybe "flip" a buy and hold property. You get to make a diamond out of coal, and the risk is lower. Plus, the market in this area is crazy so rentals are bringing in excellent cash flow. Good luck with whatever you decide to do!

I agree with Alex.... definitely honor your word.  However, if you roll sod now and have it watered daily for 2 weeks, the grass might take just fine.  We rolled sod in early October last year and we only had to water it for a couple of weeks. After that, the rain was enough mixed with the cooler weather. It looked fine in the spring. Just a thought....

Thank you all so much!!! A lot of great information! I had never thought about raising our EMD. Great idea!

@Robert G.

Thank you for your response! I think I'm going to have to get creative. It has always made me a little nervous, but its time to go out of my comfort zone because you are completely right. The MLS is just not a good place to find deals. I plan to buy and hold so I don't need an amazing deal, just something that will cash flow $300+ per month and is priced a bit below market value. We bought a house exactly 2 years ago for $138k and it was a good not great deal then. I was a little hesitant and wanted a better deal, but went for it anyway. Its worth about $175k now so in hindsight I feel it was totally worth it because it also cash flows over $300/mon. The market has changed a lot in 2 years though so its time to get creative!

@Steven Satterlee

Thanks so much for your response!!  The house is actually in Meridian.  We have offered over asking on a couple of houses that just hit the market that were priced low, but we still didn't get them because they went for way over asking.  The thing with this house is that its near Franklin/Linder and you can hear freeway noise from the house.  I'm thinking this might be a blessing in disguise because the resale on it may be tough.  I know this is why they haven't sold it so I can't understand why they wouldn't take a solid offer.  I agree that comps should be submitted with it because there is also a house just down the street priced $12/sq ft less. I will have to ask my realtor to do that next time.  And I will definitely stay patient.  I'm ok getting several rejected offers if it means finally getting a good deal on one. Thanks again for your input!  I really appreciate it!

@Cameron Price

Thanks so much for your response.  I figured it was at least worth a shot.  I do agree that I need to start locating houses another way.  I have read many articles and watched the webinar about doing direct mailings, Craigslist ads, and driving for dollars.  I'm a little nervous to do that for some reason, but it may be time to get out of my comfort zone!!

Hello! I am just wondering how you find your good deals on the MLS. I always thought there are only 2 ways: 1) you jump on a good deal the second it hits the market and have an offer in within 24 hours or 2) you offer a little lower on a house that has sat for a couple of months. I'm in a very hot Boise, Idaho market and we have tried number 1 several times with no results. We get in multiple offer situations and the price goes way up. So we tried 2. We offered $6k (plus $4k closing costs) below asking on $172k house. The sellers considered it a "low ball offer" so much that they didn't even counter offer!! The house has been on the market for 2.5 months and has already had a price drop from $179k. Did I do something wrong? How do you make these deals work without offending people? I don't plan to ever overpay for a house and I would like to find a "good deal" so do I just keep offering a little below asking price hoping for a seller who actually wants to sell? Thanks!