All Forum Posts by: Chris Calabrese

I would say never let anyone move in without paying the deposit and the first month's rent IN FULL. If they can't come up with the first month, the next 11 probably won't be any better.

I always try to advertise and show my property 30 days before the tenants move out, as stated in the lease. People looking a month in advance are much more organized and reliable in general. Always be wary of tenants who want to move right in. There has to be a reason that they're so desperate for housing, and it's usually bad.

I've used them for a few properties, and they usually exclude wind and hail, or require a separate policy. I'm not sure if that's considered wind damage, but your policy declarations should specify that. Definitely find out what your policy covers when getting a quote. They also offer vandalism insurance, but it doesn't cover theft from the jobsite! I don't know about Maine, but try to find a smaller local insurer that may write the policy.

Ophelia, I see this all the time. I think so many of these deals fall through that the realtors keep the listings active as long as possible, then they forget to change them until someone else looks.

Great job with the rehab, and very nice staging! Assuming you're priced right, this should sell quickly in the DC market. I lived in PG County (Laurel) for 12 years, before I was in real estate. Looking back, it seems like a good area for investment, especially with the relatively strong government based economy. I think unemployment is still around 5%. There are also a lot of older, but still desirable neighborhoods. Good luck with this one and future flips!

Your depreciation is based on your basis in the property, the tax assessment is just used for tax purposes. However, you should use the tax assessment to determine the ratio of improvements to land.

Ex: House is assessed at $100k, which is $25k land and $75 improvements, or 75% improvements. Let's say you buy the house for $120k, then you would depreciate 75% of that, or $90k.

Yes, it depends on the bank, but Fannie and Freddie have 15-day first look periods and HUD has a 30-day period for OO's, government, and non-profits. One annoying thing I've seen with HUD is that if a property doesn't sell and the listing expires, they might hire another listing agent and lower the price, but they reset the 30-day period. I just had one where they lowered the listing price below one of my previous offers, but I couldn't bid on it! Gotta love the government.

4 days is way too short a time to be worried. I don't know how big your market is, but in a smaller market there can be a lot of variation from week to week. You don't want to shoot yourself in the foot and lower the price when the right buyer would pay full asking price.

I use private financing for all of my flips, and below is the basic letter I use, along with a copy of the private lender's bank statement. Most banks and private sellers will consider this the same as a cash offer. I discuss the deals with my lenders beforehand and explain my CMA's so I don't have to worry about appraisals.

"My name is John Doe (“Lender”) and this letter confirms the availability of funds in the amount of $50,000 to Jane Doe (“Borrower”) for the purpose of purchasing residential real estate.

The Borrower has immediate access to these funds at his discretion, not subject to appraisal or other conditions. These funds are available for wire transfer as instructed or directed for disbursement by the Borrower.

Attached is a printout detailing the available balance. If additional information is necessary, please address any calls to the contact information below."

This is a good point. In SC, the seller has the first option to lower the price the appraised value, and only if they won't do that can the buyer then cancel the contract. Otherwise, they're in default and you can at least keep their earnest money.

You don't say where you're located. I know here in the "lowcountry", where it's very hot and humid, buyers are pretty concerned about having a quality AC system. Most 1st time buyers want to make sure that they won't have any major expenses soon after buying the home. With that said, our rule of thumb is if it's shiny and blows cold, we keep it.

I took the plunge just over a year ago, and have done well. If you can find good deals, you will always have a lot of equity in your flips, and you should be able to convince your lenders to loan at attractive rates. I find that at the low price points, it's pretty easy to find someone to put up $50,000 or so at 10% once they know that you know what you're doing. Afterall, they're probably not making nearly that much on their money sitting in the bank.