All Forum Posts by: Dale K Poyser

I'd use yelp to find different contractors. Tell them what you want to do with the different pricing options you want. After a few conversations you will have a good feel for rehab costs just by looking at a property.

Also, some regular trips to home depot to check out their packages for appliances and home renovations can be helpful too.

The benefit of this is that with that kind of knowledge you will pick up important info along the way and you will be able to develop your own system and standard.

For example I'm getting some flooring work done and by reaching out to different vendors I learned that SPC flooring is a lot more durable  and cheaper than WPC (SPC and WPC are both types of Vinyl flooring) - also by price shopping you will find one vendor is charging you $3.5 per sq ft for flooring and that same flooring is being sold elsewhere for $2.49. For a 1000 sqft house that is a $1000 savings.

Also by making those home depot trips and talking to contractors you will get an idea for what is best and what would be good selling points for your property like 20ml vs 12ml wear layers or SPC vs WPC.

my .02

I typically see cashflow targets starting at $200 per door from the more seasoned investors. That's after account for the things you mentioned like vacancy, CAPEX, repairs, etc etc. If you are not getting or able to get to $200 per door then it's not worth your time.

You can try to get a lower price which would also improve your cashflow situation. The lack of appreciation in rents is a negative but if you are more concerned about just getting some cashflow and getting your feet wet then just accept that going in.

Also, I'd get second and third opinions on the rehab. Make sure an inspection is done.

you could ask an agent to run comps for you. But if you are looking at the recent sales in the area and saying they are under water, there is a good chance the appraisal will come out close to that since comps play a huge factor. Unless you have a lot of upgrades in the property.

Personally, you are almost halfway through the mortgage and probably paying mostly principal right now. In a few more years you will have a property free and clear. If anything I'd say tough it out and keep paying the principal down. In a few years you will have a lot of cash flow. I don't think it's worth adding another 15years onto your mortgage.

I agree with @Tracy Streich it really depends on what the market rents are and what the value of the property is now and what it will be after the conversion.

If the seller is giving you a discount to remove the eviction clause that could be a red flag. Friend or not you could be inheriting a big problem if the tenant decides they are a package deal and don't need to move. Also, whether the reason is covid related or not it seems most courts are not hearing ANY evictions in most states. So you could have a hard time getting the tenant out legally.

If rents are 2k per month and the tenant stays there another year, the 10k was not really a bargain. You need some kind of assurances, or look for another deal.

Also, the cost of the inspection should be considered the cost of doing business. That inspection can unveil so many things wrong with a property and save you ALOT of money.

My .02

i thought with FHA loans the pmi was for the life of the loan?

if you can do  both the lump sum and the purchase of another property I would hold on to that lump sum amount and 

1 - consider picking up two additional properties 

2 - have that lump sum available in case of emergencies. I think cash will be king in the next couple months and having the capital on hand will allow you to take advantage of more opportunities. 

a good place to start 

enter the address in zillow to get a rough estimate.  you could also have a real estate agent pull comps (sales comparison data) for you.

Also an aspiring landlord - The issues you bring up sound simple but also sound like they could be expensive to the landlord. There is nothing wrong with hearing the landlord out and going over the contract. If the contract explicitly says no cleaning then you are kinda screwed and probably want to talk to an attorney. Also, when you meet, if you want stuff documented you can send a follow up email saying "thanks for meeting, per our discussion, we agreed to x and x and x by y date"

Tell your landlord you have a lot going on as you are sure they do as well so having emails is for your sanity (even if it so you can track what he is doing and not doing) and peace of mind.

I think worse case scenario if you have a strong case you should be able to break the lease contract and move out. It really boils down to what the contract says tho.

you could try a lease option contract - give him a down payment for the contract and then you have a couple years to buy the property at a certain price. To sweeten the deal you could also offer slightly more than what he is asking for.

If you keep the utilities in your name then your "renter" could be considered a roommate. If you are paying for this as a personal residence kinda thing Im pretty sure you're only obligated for a year or so.

You can consult a lawyer or alternatively talk to some property managers and ask what your options are. A property manager was the one that mentioned the utility thing to me.