All Forum Posts by: Chris Vail

@Dave Hall I would be curious how you came up with your 30,000 plus reno budget. My guess is you will need to go pretty deep on this reno from the sound of things, all new plumbing, all new electrical, more than likely new just about everything. Of course IF (and its a big if) your ARV number is 190,000. Depending on what you plan to do with this property you have some room to play with. 190,000 *.7 = 133,000 - (Rehab, holding costs, and closing costs) = 75,000 (what your seller wants + tickets to see star wars) Which means you have around 58,000 to play with for all of your unknown costs if you are sticking to a standard flip formula.

Do you know what you want to do with the property? Flip, rent?

If you could do seller financing on a limited term, meaning small down payment (so he can get a new place to rent) with cash flow to him as payments while the rehab is going and then either sell or conventional refi to pay him off so he could get the lump sum payment and be happy (to cover his future rent payments wherever he might be) would be the best and least out of pocket expense for you and seems like it would solve the owners problem.

I myself lived in a house in that area 12th and Chestnut.  Love that area down there, mostly good sections but there are some areas that are not the best.

@Gary F. Just as an FYI I think you will be hard pressed to find someone that will loan on an investment property at 3.25%, you will more than likely be looking at 4.75% or higher.

2000 rent - 160 (8%)Vacancy = 1840 Gross

Then you have all of your other stuff to account for CapEx (two houses worth since they are separate units), Maintenance costs, Water Sewer Garbage, PM, and then anything else that might need to be accounted for. Let's say 300 a month for Cap Ex, 100 for maintenance, 200 for WSG (100 x 2 not sure if this will be double since it is one address but since it is separate building maybe), and 120 for PM (6% which is fairly low) 1840 - 720 = 1120

Now you need to cover your mortgage costs, taxes and insurance. 

This "deal" does not make sense at the 250k price if you are going to account for everything.

I attend the BP meetups that happen about once a quarter here in Sac. I went to CSUC and was up there for 10 years (4 in school and stayed around for 6 more after). I love the area, my wife was born and raised there which was one of the reasons she wanted to leave, had to spread her wings. However I know the area is great for rentals, I mean I rented for ten years while I was up there. Generally I am looking for anything that I can get conventional financing on first, 3 bed 1-2bath (I like 1.5 so I have the option to convert the .5 to a full), and needs some work. I aim to BRRR my properties, so if you have something that falls in that category I would be interested in talking to you about it, or even if it doesn't fit that model and you just need someone to look at the numbers as a second opinion let me know.

@Mansoor Fazel I have a rental in 95838 and would pick up another if it was the right price.  There are both good and bad parts of 95838 so you need to drive around and find a location you will be comfortable in.  Yes some areas have chain link fences and bars on windows, then again some areas do not.  You just need to find the area that you are comfortable with.

@Dave Hall Welcome to the site, Chico is a good rental market due to the college.  Keep in touch I will be in the market for a deal in the near future and would consider Chico as an option.

@Jay Hinrichs The Sacramento Weather should treat you pretty nice today as you are moving around.  @Derek Daun if you can make it work there is nothing wrong with getting a second set of eyes especially if it is from Jay, and like Jay said sometimes chance meetings are just that and they become potentially your only chance. 

Then again @Jay Hinrichs might be an even faster option :).

@Derek Daun When I purchased my rental I got a pre-approval from iMortgage, they might be able to help you.  Sandy Tupper

@Gary F. In your above example you are forgetting about your rent that you are not factoring into your return.

2,400 rent (3/1)

-2,800 costs 

+2,000 for the 2/1(what your side would rent for if you weren't in it)?

=what the property will do as an investment

You also need to make sure you calculate all of your costs (vacancy, maintenance, capex, PM, ect.)

You will just be forgoing some of the profit by living in the unit but if you have a house payment now I would continue to act like you do and plow that into an account that you will use to purchase the next one or another investment.