All Forum Posts by: David C.

Welcome! I'm in Lancaster a few times a month, but I'm also just learning and starting out. Maybe we can meet to discuss our findings?

The Obituaries?

So... on that deal - am I doing it right to say:
rent / (purchase + rehab)
2200 / (217000 + 27000)
= 0.902%
This is around what a local 'flip and resell' company is trying to sell. I'm having a hard time deciding if this guy is overpriced or appropriately priced.
It looks like he's selling very close to his comps - but you are getting a freshly rehabbed property. If the rehab is good, you should have lower expenses for the first 5 or 10 years, right? if its has a new roof, new heating, new floors, etc... ?

Thank you

Just heard some horrors from a friend who's building a custom home:
contractor incorrectly sized his elevator shaft - now its impossible to put in an elevator.
elevator 'pit' is full of water - no sump drain set up
cracked septic tank installed with quick-fix patching to serious cracks.
plus the builder was drawing from the construction loan(not sure of my terminology here) - faster than in the contract for his general contractor fees- plus 'early' for materials before they were procured.
dumbwaiter shaft incorrectly sized.

House is 75%+ there? and friend is likely to fire his builder.

No thanks - I'll take cookie cutter any day!

I thought 2% rule would say:
to cash flow properly - a 200k house must rent for $4,000/month.

the 50% rule says expect to pay $2000/month on:
property management, maintenance, taxes, insurance
leaving $2000/month for debt service(P+I) and net cash flow.
So in your case $2000 - 1074 = net cash flow.

But that's assuming you could ever find a property for $200,000 that you could rent for $4,000/month. Which sounds completely INSANE to me.

This works OK for a $40,000 property in a big city 'hood - where you have some chance to rent it for $800 - but for any nice property in a decent area - I just can't imagine pulling it off.

However - I'm brand new and clueless and basically completely scared off by the math above.

I think a $200,000 house around me is goint to rent for closer to your $2,200 guess - maybe even only $1800?

checking zillow near me: a 'zestimate' of 191,000 3 bed 2.5 bath condo has a rent zestimate of 1268/month or 0.6%

Michael Quarles says:

I agree - it's a bias I have fought most of my career. I recognized it early as a weakness and fight it all the time. I've gotten a lot of business through referrals in my 'real life' - by doing good work, being easy to work with, and taking work that others don't want. Those same clients who only want one little thing now often later have better work or bigger projects later - and I'm their 'guy'. I know that my growth is slow this way - but its been enough for me.

Thank you for taking the time to respond - I know marketing is your business and I respect it - its necessary - it helps businesses grow and helps people find the products and services they want and need.

So Michael Quarles : do ethical operators use squeeze pages? Is it just a fact of life for building a buyers list?

or are squeeze pages only a tool for finding 'tools' ?

Basically - I'm concerned that my distaste for marketing is going to turn me away from valuable partners who have chosen to play the marketing game.

I've been on here a couple weeks. I'm not a Real Estate investor yet.

My primary motivations are: to diversify out of 100% financial instruments, to take advantage of depreciation expense on my taxes with rates due to increase, and to build wealth.

I am willing to suffer lower returns to eliminate hassles.
I am very suspicious of gurus and get-rich-quick schemes.
I'm trying to find someone I can trust to help me find properties and someone to be my Property Manager. It does not have to be the same person.
I'd prefer to stay local to Central PA - I realize that being passive would allow long-distance investing and that would allow for greater diversification - but I may want to take over management of the properties myself at some future time, so I want them to be local.
I don't have a strong network where I live - I did not grow up here, and I'm self employed as a computer programmer - so I have little interaction with the industry.

Thanks for all the excellent info that is posted here.

How do you get a list of absentee-owner SFR's.

Why are so many of them motivated sellers? are they all upside down on their properties?

Are today's buyers lists tomorrows motivated sellers? with the wholesalers making money off the churn?

Can I bring this back around to the OP's question? If you bought this place - with the 'do not disturb' / 'as-is' - how do you get the residents OUT?

Are these cases always renters? or could it be the original foreclosed owners? I have one of these near me and its currently at 168k with an ARV of 270k.

If I were to buy this - how do I take possession?