All Forum Posts by: Brandon Roof

It could depend how confident you are in the ARV. It might have some BRRRR, flip or wholesale potential, but from the direction you are approaching it from, it sounds like a walk away to me. The deal is already too slim to begin with as your maintenance and capex are likely too low in your initial projections and generates little cash flow. No need to change the goalposts now. Stick to (or possibly tighten) your criteria and move on.

Unless you hate money, don't buy this property.  Your assumptions on expenses are likely reasonable.  I can't really attest to the income so I'm going with the assumption you're in the ballpark there.  With this property, you are losing over $300 a month, every month, for as long as you own it.  Forget this one and move on to the next.  Best of luck in your search.

Scroll to the bottom of the screen.  First column on the left.

Thank you so much @Natalie Kolodij & @Ashish Acharya for the concise and timely response.

I purchased a home in 2019 to flip. Rehab began in 2019 and ended in 2020 and the home will likely sell later this year. In regards to year end taxes, what, if any, expenses from the purchase, rehab or carrying costs will be addressed on my 2019 tax return and what will be addressed on my 2020 tax return? No purchases were within an LLC and were made by myself and/or my spouse. Thank you for your guidance!

That's an FHA requirement that the owner must occupy the residence for a minimum of 12 months.

As others have already stated, this likely ends poorly if you proceed.  If for some reason you are compelled to help your friend, pay a couple hundred dollars to have a lawyer draft a contract and get your friend to put up as much collateral as possible to secure your loan.

@Katrina Cebrian This may not be the case with your applicants but many charges may never become convictions when the victim chooses not to proceed, which happens frequently during quarrels when one partner holds a significant amount of power over the other or illegal substances are involved and they're both not in their right mind.

As you've stated though, their income is nowhere near the minimum requirement making any past charges moot in this instance.  They need to meet or exceed the income benchmark you've established in order to potentially qualify as your tenants.

There are some HOAs that only allow owner-occupants which would certainly bring things to a screeching halt.  I'm hoping the fees take care of lawn maintenance and snow removal but that could be an additional expense.  You may also be held to additional standards which could cost you more money than intended (i.e. some shingles come off or some of the vinyl siding gets cracked.  Maybe you wouldn't immediately remedy cosmetic items that they would require you to fix or face fines).

HOA expenses can be a killer and your "Mx/Mgmt/Vacancy/Capx: $1400" is likely much too low. Doubling that figure likely gets you in the ballpark. Still likely cash-flows more than $100 per month but may not be the return you're hoping for. Best of luck!