All Forum Posts by: Cody W.

Cash flow would be $4,000.  I did finance with 25% down and would have another $5000 in rehab.  If I sold I would put that towards other debt or try to find another deal out there to buy and rent. 

Just purchased a property under market value. Option 1 is to flip immediately not touching the property and make $15-18k profit after all done.  Would pay short term capital gains so more like $10-$12K profit. Option 2 is to sink $5,000 into property in rehab over the next 3 months when I'm not doing my W2 job and rent it out. Preliminary rent numbers after rehab showing about a 11% cash on cash return after year 1.  Purchase price $88,000 I have offers for $110,000 now. 

So I have a private sale contract on a SFH. For this example I will use the agreement price of $100K. I'm financing the property so my bank requires an appraisal. The seller and his wife will also require an appraisal as they are going through a divorce and that's what their attorneys have requested. I think the appraisal will come back 10% higher. The sellers are good with the $100K, but they think the attorneys will want appraised value. What advice would you give to own it at the agreed price? Obviously no commission fees would be involved so that should save them some. I've been advised to talk with my lender and have them talk to whoever does the appraisal, but I feel that that's not right.

Compared**

Small town (40,000 pop)…what is a fair offer? I have a house I have looked at and asking price started at $85k. It’s been on the market 1 year and is now at $75k. It needs a roof and has some bathroom foundation issues that need addressed. I figured on $15k in rehab and think it would rent for $800-$850/mo. I would like to offer or be in it for $60,000 purchase price, but don’t want to offend the seller. What would your advise be?

Here’s the story…

Looking for single family vacation home and found a place. We offered full asking price on day one and went under a signed contract contingent upon appraisal. Appraisal came back well under signed contract so we began renegotiating. We agreed on a price and the new contract was generated, but not been signed yet when we heard about another potential property coming for sale. We decided to hold off and we looked at other property. The other property was a better fit for what we were looking for so we made a deal for full asking price on property #2 and got a signed contract. We then went and talked to property #1 sellers face to face and told them we were no longer interested as appraisal was low and found a better property.

A couple days go by and property #2 sellers call us and say they are backing out of contract due to property #1 sellers saying we were dishonest.

Arguments….

-We never had an updated signed contract with them.

-they relisted and sold in 48 hours.

Could we go after seller #2 in court system since we do have a signed contract and did nothing wrong?

What kind of interest rates are you seeing on SFH rentals? My local bank is quoting a 4.025 for 30 year fixed selling it to Fannie Mae. Credit score of 800+. What is everyone else seeing?

@Michael Plante

Was thinking the same. Plus a 30 year is only .03% higher, so really a no brainer.

Looking at buying first SFH rental. I've been advised that I do not need a LLC at this time, but looking for recommendations on where to get the best mortgage rate. My local bank has quoted 3.975 fixed for 20 years. 20% down. Selling to Fannie Mae. Is that about standard? 800 credit score no other debt besides primary residence mortgage.

@Matthew Reid

I fixed what was found on inspection. I did not remodel anything major. My thoughts are if you dump money into a remodel in a bad neighborhood you will not get your money back out. Tenants can still trash it and your next buyer will still consider the property in a bad location, even if the property is updated.