All Forum Posts by: Bob Razler

I have successfully predicted 10 out of the last 6 recessions.

Hello:

It will vary state by state as some states may have requirements for certain reserves, etc.

That being said, the developer will generally set up the community first with the amenities that they feel they want/need for the target market of the homes (clubhouse, community pool, gatehouse, tennis courts, etc.), then they determine the services that will be included to homeowners (lawn maintenance, trash pick up, gatehouse security, cable service, community activities, etc.). 

Once you have your community planned out in that way you generally work with a Community Management company who will take all the amenities and services you plan to offer and put together an annual budget based on the costs of operating such a community (not the cost of the construction of the amenities, that is part of the development), the reserve requirements, etc. and they determine an annual fee per lot/home.

You would also work with them to determine any initial capital contributions per buyer at the time of closing. Your management company and a good HOA attorney will be able to work all of this out.

Hope this helps.

Bob

Hello:

It is also a way for them to put less money into the deal.

Rather than you reducing the purchase price to cover the repairs, they will get you to pay for them after closing by effectively giving them $5k in cash from you.  It's a good tactic for buyers.

Let's say you have a home that is selling for $100k, and it appraises at $100k (or more).  I plan to put down $20k and borrow $80k.

If you do the repairs before closing, no change to the numbers.

If I do them myself after closing, I have to put in the $20k and an additional $5k after closing.

If you reduce the price by $5k, I am buying it now for $95k, putting down $19k, borrowing $76k and adding in $5k after closing.  My cash in the deal is now $24k.

If they run the scenario they asked you for, I put in $20k, still borrow $80k, they throw in $5k after closing, and my cash in the deal is still just $20k for the final repaired home.

As mentioned above, you are free to negotiate or just say no, the home is AS IS.  Also, not being a tax expert, it might be better for you to have the price of the home lowered (so now you are seeing less of a gain).

Just thinking out loud.

Bob

Hello Sandy Springs & Atlanta Community!

I recently relocated to the Atlanta metro area (Powder Springs for now)!

I am an investor that moved from Florida. I have 4 units down there.

I have also done some private lending as part of my REI life.

I am looking to meet other investors here in Atlanta and would love to connect with an agent in the area to help me find a 2-4 unit that I can house hack now that I am here!

Thanks,

Bob

Hello Sandy Springs & Atlanta Community!

I recently relocated to the Atlanta metro area (Powder Springs for now)!

I am an investor that moved from Florida.  I have 4 units down there.

I have also done some private lending as part of my REI life.

I am looking to meet other investors here in Atlanta and would love to connect with an agent in the area to help me find a 2-4 unit that I can house hack now that I am here!

Thanks,

Bob

Great meeting everyone!  So good to see everyone again!

Thank you Jon for running the meeting!

I am sorry I didn't have any cards.  If you would like to chat or meet for coffee feel free to contact me at:

[email protected]

561.316.7701

Right now, A.....looking for more deals!

Hello:

I wanted to get everyone's opinion on an issue - analyzing a standard deal vs. a prospective house hack.

Here is-are the hypothetical-facts:

Let's get say for the sake of this discussion, my target for a standard deal is 12% CoC return when running the numbers on a standard multifamily deal.

Let's say I currently pay $1500 a month in rent. However, I find a house hack duplex which has a $1200 per unit rent. 

Now, when considering a house hack do you generally revise your analysis based on the actual savings you will see or as if the deal were standing alone?

Do you feel I should impute rent of $1500 to one side (which I would be occupying) as that is the rent plus my $300 savings, or do you think it's best just to assume the deal is $1200 x 2?

Again, I know there is no RULE, just looking for everyone's thoughts on that method.

The savings for me are real and I will realize them should I buy that deal.  However, someday I will move on to the next deal and the duplex will revert back to $1200.

Clearly, the extra $300 boosts my real CoC return on that deal.

Thank you in advance for your comments.

Bob

LOL @Jon Huber !  Yes.  I had the bunny suit ready.

@Oscar Jacome I know....it's killing me!