All Forum Posts by: Billy Mehlinger

It would be great if we could rotate days as well. I would be able to make a Thursday or Friday meeting in the area.

Hey BP,

I have recently come across a potential opportunity to purchase four homes in an estate sale. The homes are listed on the mls at prices above market value and I wanted to get the advice of an experienced estate sale investor. The properties are out of state but I lived in the area for 5 years so I have some knowledge of the area. My plan is to either hold the properties for long term rentals or possibly "wholetail" them depending on what kind of financing I can pull together.

My biggest question would be what type of discount can I reasonably expect to get for buying all four properties instead of the seller having to sell them individually? The homes are already listed above marker so I'm not sure how motivated the sellers are. Below are the asking prices and my conservative estimated value (using comps and my limited real estate knowledge) that I think they can reasonably be sold at. The total asking price is $381,920 and I am considering offering around $260,000 with a max offer of $280,000. The homes will rent for between $700 and $1000. 

1. Ask $89,980 value $80,000

2. Ask $99,980 value $83,000

3. Ask $99,980 value $85,000

4. Ask $91,000 value $75,000

So I'm finally starting to feel like I'm getting close to finally getting out of the analysis phase and finally taking action. I've analyzed 2 deals this month and 3 in the past few months total. The first which I posted here on the forums ended up being in too rough of an area but it was the first deal I had actually run the numbers on so it taught me a lot. I took the time to break down every cost and although it looked good on paper the area was just too bad. The second deal was a short sale that got snatched up before I was able to make an offer. While I was upset it built my confidence a little knowing that it was probably a great deal. Seeing how fast it went made me feel that I was on the right track. The last one was a 4/1 for a very low price that I was looking at with my dad. After speaking with a few realtors about it we concluded that the layout was not conducive to getting the best rents or for resale. 

After losing out on house number two due to not being able the pull the trigger fast enough I decided that I need to nail down my finances and figure out how exactly I am going to finance my first deal. So I have a meeting with my father this week to discuss the best path. I'm getting closer by the day to finally closing my first deal and I can't wait!

Welcome!

Just realized I misspelled ADVICE in the title. Pardon my typo.

@Logan Hassinger. Actually this will be financed by the BOD (Bank of dad) which is the reason for the low down payment.

Hey BP!

I was hoping to get some input on a potential opportunity that has come my way. I have yet to see the property but I ran some very conservative numbers and am still showing decent cash flow. The duplex has already been renovated so it is doubtful that it will need $10,000 in repairs but I want to err on the side of caution. Rents in the area support $650/unit at the low end. 

Purchase Price:$78,000.00

Purchase Closing Costs:$1,500.00

Estimated Repairs:$10,000.00

Total Project Cost:$89,500.00

After Repair Value:$90,000.00

Down Payment:$5,250.00

Loan Amount:$72,750.00

Amortized Over:30 years

Loan Interest Rate:4.00%

Monthly P&I: $347.32

Total Cash Needed

By Borrower:$16,750.00

Monthly Income: $1,300.00

Monthly Expenses: $1,011.15

Monthly Cashflow: $288.85

Pro Forma Cap Rate: 8.53%

NOI: $7,634.00

Total Cash Needed: $16,750.00

Cash on Cash ROI: 20.69%

Purchase Cap Rate: 9.79%

Total operating expenses: $663.83

Mortgage expenses: $347.32

Vacancy:$78.00

Repairs :$130.00

CapEx:$130.00

Insurance:$100.00

Management:$130.00

P&I:$347.32

Property Taxes:$95.83

Income-Expense Ratio (2% Rule): 1.45%

Total Initial Equity: $17,250.00

Typical Cap Rate: 8.00%

Gross Rent Multiplier: 5.00

Debt Coverage Ratio: 1.83%

ARV based on Cap Rate: $95,425.00

Income-Expense Ratio (2% Rule): 1.45%

Total Initial Equity: $17,250.00

Typical Cap Rate: 8.00%

Gross Rent Multiplier: 5.00

Debt Coverage Ratio: 1.83%

ARV based on Cap Rate: $95,425.00

Welcome to the forum. Hope to see you around Atlanta!

Welcome Deep! 

Great job! Keep us up to date!