All Forum Posts by: Account Closed

@Steve Vaughan Well funny enough the appraiser made an error.....he did not look inside the comp that he compared this house to and if he had he would have realized that the comp was completely gutted inside....to the studs...

The expenses include my loan payback amount which would be $972 in order to pay off in three years...otherwise the expenses would be closer to 1K ( including fixed & variable expenses)

This house is in a C+ neighborhood.....SFH get 1000 to 1200 per month...two families get 600 to 1000 per month....so I had to change my rents to 750 per unit rather than 1000 just to be safe.....these units are larger than most and there are a lot of very large closets in each unit.....each unit also has 2 beds, 1 bath and kitchen and dining area.....The kitchens are sizeable too....killer basement and new 2 car garage....private fenced in yard in the back.....

Still a good deal.....if I want to pay off the loan in 3 years then it would put me in the negative for the first few years....

Thanks for sharing! Will let you know how it pans out.....

Hello BP!

I found a Multi-Family property that was obviously priced way below market value at 20,000. This is a bank owned property and it is in good condition! All it really needs is some minor updates, paint and flooring. I am anticipating multiple offers....

Here are the numbers based on a purchase price of 35K     These are very conservative numbers

I used the BP rental calculator to estimate:

ARV: 70,000

Monthly income- 2000.00

Monthly Expenses- 1900.00

Monthly Cash Flow- 58.00 until year 3 or 4, then it will be 1,083.00

YEARS 1-3

ROI-4.25%

YEAR 4

ROI- 80.06%

FINANCE TERMS:

I plan to mainly use credit cards to purchase this property. This would be at 3% simple interest and then 0% for 12 months. Which means after the 1st year I would have to transfer balance and pay another 3% transfer fee in order to maintain 0% interest for an additional 12 months. 

I believe my debt to income ratio would be too far out of whack to get approved for a home equity line of credit on this property. I currently make a very modest income on purpose while attending college to acquire a degree in Business. 

Any input would be helpful:) Thanks in advance!!

@Chad U.

Funny enough my boyfriend and I were debating on adding the second bath.....I have a couple of friends that have been flipping for the last couple of years and they ALWAYS add a second full bathroom.....Thanks for the confirmation....that just goes to show how critical it is to have that second full bath.....

TO ALL : The hud house I was looking at sold to owner/occupant right before bidding was opened to investors....however it was good to experience some of the anxieties that play a roll in making such a big investment....and it was awesome to reach out to a community of knowledgeable investors for some help!!!

Until next time....

@Mason Snyder I know a good real estate attorney located here in Ohio....PM me if your interested!

Good luck!!

After much consideration and lots of number crunching we have decided to try to buy and flip this one...

As  tempting as it would be to buy and hold carrying the weight of that much debt for an entire year makes me nervous.....

Thanks everyone for all of your help with this one:)

@Dave Foster SIESTA KEY BEACH is my favorite place to vacation!! I was just there last April for a week....you really can't tell someone about the sand on that beach. They have to experience it themselves....

I have thought about doing just that.....I didn't know the allowable amount so thanks for sharing that information with me....This particular neighborhood is on the edge of being a C neighborhood....some people may say it is....so this girl who lives in the bubble would have a difficult time adjusting...especially since I watch the ID channel often....My boyfriend is a true urban boy...me not so much...we currently live in an A neighborhood and I love it....it is tucked away from the freeway so it requires a bit of driving but the community is safe and absent of any riff raff......

We do both share a love for ethnic foods and culture which we don't have to much of where we currently live....we are constantly driving into the suburbs right outside the city.

My house would easily rent for 1800.00 a month. Which would be great cash flow!!

I just am not sure if this is the house to do that with.....even though the numbers say to do it....

I am taking the weekend to mull it over and I will make a decision by Monday.....everyone here on BP has given me a lot to think about!!

Thanks everyone for all of the great advice!! You guys have been extremely helpful!! I actually estimated the comps in this email this morning because I had not requested them from my agent yet. I have a better idea now that I know exactly what they are and I have adjusted the numbers for calculation purposes.....

@Account ClosedThanks for the info.....! I will keep that in mind if I need some guidance:) I am very fortunate to have an agent who is not only a friend but he is an inspector/appraiser/investor himself and he is born and raised in Cleveland Ohio....However I am all about gaining different perspectives....hence why the podcasts are so invaluable.....

Good morning BP!

After tripping over this sight a few weeks ago I am happy to say I am placing my first bid on a property this morning! Granted I know I am a ways from acquisition but I want to be sure i know what my best options are.

FIRST: THANK YOU @Brandon Turner and @Joshua Dorkin for giving me this amazing resource that has taken a girl who was trapped in the idea that the only way I could make a living is by working for someone else and turned her into a real estate crazed, entrepreneurial minded. all things are possible, freedom chasing girl!! I lost a job of 21 years back in 2014 ( loved my job and made great money) and now I am making half the money and the work quite frankly bores me. BUT I now spend my days listening to the BiggerPockets podcasts while I work. I spend breaks and lunches on my phone scanning real estate apps for investment opportunities. I consider going to work to be an investment in my education:)! So again Thank You both for all of your efforts and incredible insight to share the gift of possibility with all of us! You guys ROCK!!!! 

NOW here is my dilemma......

Originally I thought I was going to flip this house however; once I ran the numbers it seemed to me that holding onto it may bring bigger profits in the long run. I would love to get some feedback to see if I am looking at this the right way. keep in mind these numbers are very conservative!

Here is the scenario if I Buy and Hold:                                            OR Flip:

List Price: $28,900                                                                            $28,900

Estimated repairs for rental : $2500.00                                           $10,000/$5,000 for unknown's

Total cost of project: $31,400 ( assuming I pay list price)              $43,900

Monthly rental income: $1,000.00 ARV: W/1 bath= 65000 add/bath 85000

Cash Flow: $348.00                                                                           Potential profit: 21,100

NOI: $4180.00

PROPERTY DETAILS: This house has a new roof, brand new windows, new siding, 3 beds, 1 bath bungalow with 1.5 garage. Partially finished basement. Basement has been waterproofed. Driveway is in great condition. Bath needs light fixtures and that's it. Needs appliances and minor upgrades. This house was rehabbed in 2009 so little to be done.

HIGHLIGHT: This is a HUD property which means the property is currently on the market for owner/occupant buyers only. Which means If I buy the house within the first 20 days I have to wait a year before I can flip it. This allows me to potentially get this for a great price and avoid a bidding war between investors. I can hang onto it for a year or more and sell it when the market dictates.

OR I can wait until it is available to investors (in 2 days) and take my chances in a bidding war and then flip.

MY CONCERN IS: This would be a cash purchase (on credit card convenience checks at 3% simple interest). Zero interest for 12 months. If I go this route I will have all of my capital tied up in this house. And to avoid interest I would have to pay it off within a year.THE BRANDON TURNER WAY:) LOVE HIS DETERMINATION.....

THOUGHTS: Now in my mind, I would plan to keep going and figure out a way to buy another property to flip this year. Hard money lender may be the only option seeing my debt to income ratio will be out of whack if i choose to buy and hold.

I also considered lease with option to buy. However I feel that  flipping this property will be more profitable down the road.

LOCATION : This house is in a great location in a suburb of Cleveland Ohio. Parts of this particular city have been and will continue to be rehabilitated. I feel as though if I hold onto this property and sell later on the rewards will be greater. 

THANK YOU in advance for ANY input or feedback you may be able to pass onto me. It would be greatly appreciated......

Welcome Pete!

@Pete Grapentien

It sounds like you are on the right track....I am a new investor as well however I have listened to many podcasts and a lot of investors got there start by living in there first Duplex....great way to get your feet wet as a landlord plus your able to save money by living rent free and you can update the duplex in your own time.....sounds like a win/win to me!

Best to you!!

We are in a similar situation.....we are looking to fix and flip and do not have enough capital to feel comfortable venturing into an acquisition...

Maybe you can find someone to partner with on your first deal.....

Also, if you are a Discover card holder they offer loans to card members at a 5-9% interest rate....