All Forum Posts by: Josh C.

As an RE professional cost segregation is extremely nice benefit for the cost and for my situation better than 1031s.

But I can see if you can’t take the paper losses it being worth it. Most “cheaper” and “regular” rental places though don’t generate enough income to worry about taxes anyway so it’s a non issue for most people. I’ve only done it on medium sized apartments. The only reason we do a cost segregation is during the same year we sold something and are trying to off set that tax liability.

A president talked about rent control. Is a website about real estate not suppose to address that? It’s clear what politics are in favor of rent control and how that’s going for them.

“Is this a bad investment”

Yes.

Unless you see path with very little out of pocket to double rents in 12 months this is a terrible investment. It’s not 0%. It’s negative.

I feel we could do that for around 300k, but that’s Indianapolis. Unsure your market.

Thats ground up new construction prices just about.

@Brett Merrell

I know nothing about the deal or that syndication. But that area is a very nice area with a good tenant base and should rent quickly if priced in line and not reaching for the moon on rents.

The first comp all appraisers pull is yours, the house they are appraising. They will see it sold for 500k with all the pictures online, and appraise it for 500k. Also, the second lender will see you just bought the property weeks ago and ask why the value has went up 20% instantly. I give this plan a 1% of success.

A better plan would be buy it for 500k, fix the kitchen/baths and paint the exterior/interior and then try the refi about 8 months later. People have been doing this forever and proven to work.

Good luck!

Starting off having no money means getting your hands dirty. As said above go buy paint brushes and start painting tonight. 20 minutes on YouTube university is plenty good enough to paint a rental. A lot of us on here started off doing everything. I laid my own flooring, painted, set bath tubs etc at first. You need to make a ton of money at first to scale. If you are rich and want to park money with a modest return then hire everything out. If you are now broke and want 20 doors asap well then get to work if you have the ambition.

Ben Franklin said it best. “Most people miss opportunity because it’s dressed in overalls and looks like work.”

Good luck!

@Tim Swierczek

This must be local to you. This would be zero issue in Indianapolis and tons of normal conservative old school banks or credit unions would lend on this 75% of as is value and 75% of additional construction cost as long as not more than 75% after repair ARV. I personally have bought places and started rehab and then involved a bank before completion.

@Mike A.

Maintenance and vacancy happen. We manage a tons of properties and 40-50% expenses (not including debt) is very common. If you are really scrappy maybe 35%. But over a 5 year average these numbers are too optimistic.

Good luck!

@Deb S.

Great response. But just to clear for all the new people the formula is NOI / cap rate = purchase price. So lower cap rate the higher the price. Not higher the cap rate higher the price. In your case $130,000. / 0.11 = $1,181,818 is an 11 cap purchase price.

Also, pretty much throw out the sellers numbers and do your own based on market conditions. Sellers usually inflate the rents and deflate the expenses.

Good luck!