All Forum Posts by: Chris Vail

@Bahman Ghashghaei Welcome to the site.  

While posting if you want to call attention to any of your collegues or anyone that has already posted on the thread simply type  "@" and then the first few letters of their name.  For instance I tagged you by typing "@Bah" and you name appears at the bottom of the text box I am typing in, then I just have to click it and your name is now tracked and tagged so that you can easily make your way back to this post.

Lots to learn on the site good luck.

We are also in a serious drought out here in California, not sure of the regulations where your rental is in SoCal but I know up here in NorCal certain counties are requiring a minimum 20% reduction in water usage or fines could be assessed. The drought is not going away anytime soon so might want to rethink the grass option and possibly replace (if you were thinking of replacing the grass anyways) with a more drought tolerant landscape option.

Congrats and keep us posted

@Justin E. 

Congrats on getting your first deal.

Have you given yourself a budget for rehab?

What kind of profits are you aiming for when everything is all said and done?

@Aaron Foster 

Not an expert but this is some of the stuff I have heard / seen around the forums

Figure out the After Repair Value (ARV) of the house, then take 30% off that price, then take out your estimated rehab budget (there is a lot of items that go into this and not just supplies), and you end up roughly where you want to be.

(ARV x .70) - Rehab Costs = Starting offer

Now there is a lot more that goes into planning out a successful flip I suggest looking for some posts by J Scott, or even buying his books that are offered through the site. I am told they are excellent and give a very detailed run down on the aspects around flipping.

@Account Closed 

In both of your scenarios you are counting on appreciation. This is neither right nor wrong but a gamble that you and your husband need to agree upon. There is no way to know what the house price will be in ten years, if you could every person on this site would like to talk to you about a potential property :).

If this is an investment you are looking to make you need to balance all facets of it with your expectations and make them realistic.

How would you feel if you purchased this property and in ten years it was in a down cycle and was only worth 40k? 100k? 150k? Would you still be happy with the investment you made? Not trying to scare you but want you to think about the downside as well as the upside, your co-worker has much less downside in his properties due to the timing when they were purchased. It is possible that the property will appreciate to 200k or even 250k but when looking at an investment you need to look at the downside as well and do your best to protect yourself from that risk.

That’s where the cash flow comes into play, if this property was cash flowing $0 to some positive number a month the fluctuations in price would be easier to swallow as the investment would still be cost neutral or making money and it would be less painful to wait for the upswing in the market you would be looking for to sell and make your gains.

Just my two cents

I can't tell from the Trulia listing as the pictures are not coming up, but the craigslist pictures are taken with no one currently renting the units, so either after the most up to date remodel or no one is currently renting the unit.  Just something I have noticed people doing lately on listings, using the best photos they have of places even though they are 2-5 years old.  And no lease in place is a sketchy item as well.  Verify everything that you can.  Its possible this is a good deal but its also possible it is not, there is a lot of grey right now with the post about this property. 

@Joshua Fletcherr 

In order to clear up the low ball discusion have you sat down with this agent and shown her what kind of return you are expecting?  Have you narrowed down what you are expecting?  When you say just blindly taking 10-15k off the listed price, it sounds like you have no end goal in mind other than buying a listed property for a reduced price.

On the other hand if you can break down the numbers to the agent, down payment, rehab costs, closing costs, what the market rents are in the area, expected expenses, and ultimatly what kind of return on your investment you are looking for it will paint a much better picture for the agent on why you are wanting to make the offers you are talking about.  After all of that I would then ask the agent where they think you can find properties that meet your criteria.  If they say not in the area you are currently looking at with retail buyers take the advise and search for either off market properties or find a new area.

Just my two cents.

@Sharad M. I know its been awhile but curious if you have finished pictures for this project?

As always thanks for sharing @Wendell De Guzman