All Forum Posts by: Cody Rosenbalm

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Would you do this deal?  It's in a fast-appreciating area with lots of population growth. It has decent cash flow, decent cap rate, and decent  coc-ROI, but it fails miserably on the 2% rule and the 50% rule. How does a property fail so bad on these rules of thumb, but still seem to be a decent investment? 

Help me analyze this deal. The calculator spits out a good positive cash flow, yet it fails the 1% rule and the 50% rule. Is it still a good deal? Any info is appreciated!

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I know that you can use an FHA loan to purchase a preexisting duplex (aka "house hack") but can you use the FHA construction loan to BUILD a NEW duplex?

I know that you can use an FHA loan to purchase a preexisting duplex (aka "house hack") but can you use the FHA construction loan to BUILD a NEW duplex?

Thanks. I'm in a 100k population city in Texas, so probably the worst neighborhood here isn't nearly as bad as some in say, Chicago, LA, or even Houston... but for my market it's just considered the "bad area" of town. 

That's a good point to consider... Incomes are pretty much staying the same as housing prices are rising. A $50k income is still going to need a $150k home, so they may be forced into less desirable neighborhoods.... I would just rather be in the middle of gentrification instead of being one of the first to take the risk. 

My philosophy when flipping houses has always been the classic "find the worst house in the best neighborhood." In other words, my goal has been to search A+ neighborhoods or great school districts and find distressed homes and bring them up to top of market value for the neighborhood. However, in this market, that strategy is getting harder and harder to accomplish. 

In my area, there are virtually no deals in these neighborhoods right now. However, I'm finding tons of deals in the "C" neighborhoods, on the "bad side" of town. Homes with bars on the windows. It's hard to imagine selling newly renovated homes in these neighborhoods, but right now, it's looking like all I can buy. I know there are flippers who flip in "C" neighborhoods all the time though. 

Can anyone help me wrap my head around the exit strategy in a less-than-desirable neighborhood? 

(There is new construction going on in some of these neighborhoods, but that's largely due to the City's new incentives for builders to build in these neighborhoods. Mostly, they still consist of slumlord shotgun houses with bars on the windows that haven't been painted in decades.) 

My minimum is $30k but my target is $50k. The flip I'm working on selling right now is what I consider a "slam dunk" and I'm profiting $65k before taxes. I try to buy at $100k or below and sell at around $180k-$200k.

@J Scott you said if you're "flipping" as a business... what if you are "BRRRR-ing" as a business? We buy properties and rehab them not knowing if they are a Flip or a BRRRR until the end. Are our costs on purchasing these properties and rehabbing them considered COGS or Expenses? Does it matter? TYIA