All Forum Posts by: Dan Turkel

Hey @Joshua Mattson, thinking outside the box here but what do you think about this...

Your father continues to own the property and you continue to live where you currently do. You then rent out the house he recently inherited and manage it for your father. You two then split the cashflow each month. 

In addition to this, your father could also take out a HELOC on it and loan that money to you for you to either flip or buy and hold a property you're interested in. You could then take the profits from this newly acquired property and pay your dad back for the money he loaned you. Obviously, the numbers would have to work but assuming they did, you could make out fairly well.

Assuming you bought and hold the other property, you'd then have 2 rental properties under your belt which you could recycle the cashflow with to purchase even more properties.

This is all contingent upon your father actually wanting to help you begin investing in real estate, of course. If he is, I think this alternate idea is certainly worth considering.

I wish you all the best with this - let me know how it goes!

Dan

Hi @Brian Wert, I'm not familiar with the area but these people certainly are! I recommend reaching out to some of them and going from there. Good luck!

@Jack Barkow, wow - this goes into quite a bit of detail about the taxes! In my experience, I've been able to pretty easily find a single number clearly indicating the total amount of taxes paid in the previous year. If you want to PM me the address, I can certainly try and help you do this. No worries if you'd rather not. Also, who knows what that tax credit is for - you'd probably have to speak to the owner to figure out why they're getting it. 

From what I can tell though, your edit seems to make sense:

• Total taxes owed = $2,951.46
• But the max tax that can be imposed = $1,754.28
• It's paid in two installments throughout the year so 1,754.28 / 2 = 877.14 per installment
• First installment was probably paid late as you mentioned so they charged an additional 98.71 (plus a random additional charge of 90) bringing the first installment total to 1065.85. 
• Second installment was 877.14 plus another random additional charge of 90 bringing the total to 967.14

With all of that said, it looks like the total taxes for the year were 967.14 + 1065.85 = $2,032.99

@Cody Evans, I'd suggest getting to know some wholesalers before trying to do it yourself. Your best bet will probably be to find them on BP. Shoot them a message and try to begin a conversation with them. Ideally, you'd be able to meet with them in person by taking them out for a coffee or something. I also suggest going to a REIA at some point to begin developing your network/team to get your name out there.

It's all about providing value. You don't want to just say that you'd like to pick their brain. Offer help in whatever way you can and try to have a friendship develop. At that point, the person would ideally want to help you out.

@Jack Barkow, it sounds like you're missing a lot of important info that you really need to solidify.

• Check out the county tax assessor's website to determine what the taxes were last year. This is fairly easy to do and will give you an exact number to work with.
• You'd need to confirm whether or not there has been any deferred maintenance. It's possible that you'd have to put some money into it for repairs.
•  I don't believe you mentioned anything about closing costs. Try this website to determine a rough estimate for closing costs: https://mintrates.com/mortgage-closing-cost-calcul...
• You also need to get a better idea of the insurance costs... you've even admitted you could be way off. Call up an insurance company and get a quote from them.
• You also need to determine for sure whether or not the landlord is paying for any utilities. Try calling up the realtor and asking.
• You're neglecting to factor in savings for Cap Ex. I typically put aside 10% for this.
• You didn't mention anything about the expenses associated with the eventual sale of the property. On average, you'll need to pay 2.9% to the buyer's agent and another 2.9% to the sellers agent when the time comes for you to sell the property.

Assuming you don't pay for any utilities, the deal definitely looks pretty good. However, be weary of it being in a not-so-great neighborhood. This could make it significantly less worth it. 

I ran some numbers:

My CoC return and monthly cashflow come up less than your estimates but it still seems like it would make for a great deal.

Your top priority should be to address all of the points I brought up above and see if you can get some more accurate numbers to work with.

I wish you all the best - let me know how it goes!

Dan

@Cody Evans, that can certainly work in theory. In practice however, you'll undoubtedly face many challenges you (or anyone else first starting out, for that matter) could have never foreseen. 

I'm not sure if you've ever seen this blog post but it basically describes exactly what you're trying to do. I highly recommend reading through it if you haven't already. 

Since it will be critical for you to obtain properties at a discount, I think the most important person on your team will be a quality wholesaler. The problem is that quality wholesalers don't just throw their best deals out there for just anyone - they first share them with people who have proven that they're not tire kickers. They give them to people who consistently buy the properties they've gotten under contract. It takes time to develop this type of trust so be sure to keep that in mind. 

@Ryan Woodard: first thing's first: we'll need to know more numbers/details about the property to see if it's even that good of a deal in the first place. What do the expenses look like? Vacancy? Taxes? etc...

Assuming it's actually a good deal, I agree with Christi's advice above - you should probably try to take advantage of an FHA loan because 1) you'll meet the requirement many of us don't - you'll be living in the property and 2) the relatively low down payment is attractive for you because you don't have much savings.

@David Santore Makes sense - thanks for pointing that out! I'm not very familiar with the Boston market.

@Deangelo Mack You're very welcome. Do it up, brotha! 

@Cody Evans, glad to be of help! 

I actually meant to say "search for investors in your market of interest on the BP website." Since you pointed this out though, it's worth mentioning that there's nothing like an in-person meeting with someone. While you should prioritize networking with investors in your market of interest, it certainly can't hurt to also establish connections with people you can actually meet with in person. There's something special about face to face interactions... especially if you're just starting out

Can you elaborate on what you mean by "structuring your own deals?" What type of deals? What niche do you plan on pursuing? Do you plan on flipping, BRRRR'ing, buying and holding, wholesaling, etc.?

To answer your question directly: a location where no tenant is willing to live because it's in the middle of nowhere is too rural to invest in. As long as tenants are willing to live in a given market, there is potential money to be made in that market. And if there's money to be made, it's not too rural to invest in!