All Forum Posts by: Cassi Justiz

https://soonerhomeinspection.com

This is who I use for the majority of my inspections now. His reports are interactive and really easy to follow along with if you aren't able to be physically present for the inspection. 

Thank you @Levi Ballard! 

@Timothy Young Please feel free to reach out! I'd be happy to chat! 

Some lenders are great for owner occupants but totally not competitive for investment properties. The two lenders that I work the most regularly for investment properties will do 20% down and a flat origination fee under $1000 with no points.

Lending is very market specific, but that seems steep to me. I would definitely try to find some investment friendly lenders that are local to your market. 

@Kingsley Edemidiong, 

One thing to keep in mind is that generally highly distressed and super cheap properties are that way for a reason. People can have success in any area, but it really just depends on your comfort level. Rehabbing properties in distressed areas can help turn areas around, but you need to look at the current picture of the area to decide if it meets your goals. Like any other speculative investing, you need to make sure you are okay holding the properties if whatever you are expecting doesn't happen. Some examples of these kinds of speculative investing could be home values going up, crime going down, hoards of hipsters moving in and increasing market rents, etc. Buy based on current hard data and that way any improvements or appreciation to the area is just a cherry on top of a solid investment. 

Basically what @Joe Villeneuve said. :) 

If the property is going to be tough to rent, then sell it and use the profits for down payments on solid cash flowing investments.
Is it possible to sell just the SFH? If so, I'd sell that and keep the duplex.

There are a lot of options for you! I personally wouldn't hold a property for appreciation alone, but it can certainly be a great bonus on a property that is already cash flowing. 

With that much equity, you could definitely leverage it into a handful of cash-flowing rental properties in the Midwest. You won't get California appreciation, but you could get stability and positive cashflow. In my area, 200-250k would get you a nice new or new(er) construction home in the 'burbs with high end finishes.

I'm originally from Lubbock and live in Edmond now. I have rentals in OKC area and in Lubbock.  I'm not super familiar with the other markets that you mentioned. I think either market would be great for A or B class rentals. I would personally stay away from the Midland/Odessa area right now. It's a lot more boom and bust based oil economy than the other markets that you mentioned. Edmond (OKC in general) is generally thought of as a major oil economy, but it has diversified well over the last few years and isn't nearly as reliant on the oil economy as somewhere like Midland would be. Lubbock is also a solid rental market and has a fairly diverse economy. 

The taxes in Lubbock are a little higher, but the insurance is a little cheaper when compared to the OKC area. I've found that the rents in Lubbock tend to a little higher than the rent in OKC for similar priced homes but the CoC ends up very similar when you factor in the slightly higher tax rates.

@Tracy Streich, @Scott England

Any insights?

Do you have anything in your lease about it? My lease has it written in that tenants are responsible for winterization. I send out reminder emails at the beginning of the season to remind everyone to put on the faucet covers, disconnect the hoses, etc.
But with it only being $65, I would go ahead and take care of it as the owner so you know it's done correctly. 

Generally we comp out SFH homes using the price per sq ft metric. That's how most appraisers are going to assign value for lending purposes. However, we also look at total cash on cash return. Cap rates are tough on SFH because everyone runs their numbers differently. So someone may be selling a "10 cap" but they may self manage and not account for any property management or reserves.

I would say most of the investors that I have worked with are looking to hit a specific CoC return on their purchases rather than a cap rate.
So we will run ballpark price per sq ft comps to make sure our offer price is still in line with market and appraisal value, but the cash on cash return is what drives a lot of people on whether a deal is worth pursuing or not.