All Forum Posts by: Deano Vulcano

Joel and Salvatore, after 26 years of doing flips my numbers are pretty solid. But I agree with you guys, the deal is still a bit skinny. I think a good question to ask is, "would I do this deal if we weren't at record low inventory numbers"? And I think I would honestly have to answer "No".  Thanks for the feedback everyone. 

@William Neagle

Once again good points. You mentioned "outside deals", are you referring to those that are not "subject to" or owner financing?

@William Neagle

Great point.

Did you see if I were to go with the renting to traveling nurses model, it would be more like $815 a month in cash flow?

@William Neagle

Thanks for your response, I'm not looking to flip this one, it would be a long term hold. What do you mean by "I would not guarantee the debt"

I would like some input on this potential deal. 

3/1

1100 sq. ft.

Purchase price $75k

Renovations $35k (Everything would be new: HVAC, roof, electric, plumbing, concrete patio and sidewalks, vinyl siding, fencing, kitchen cabinets, sink, faucet, new tub and tiled surround, vanity and LVP flooring, it also includes a stove, dishwasher, refrigerator, washer and dryer, so basically a new build).

All in: $110k

ARV: $130k

Refinance with $20k down

Loan amount $90k @ 4.0 % for 30yrs = P.I. $430 + taxes and Insurance $150 = $605/month

5% Vacancy $90

1% Cap Ex $20 (low because everything is new)

1% Repairs and maintenance $20 (same as above)

Straight rental.....$1,000/mo - $735 expenses/mo = $265 cash flow

Renting to traveling nurses(2 hospitals in a small town).... I could get $1800/mo ( but would incur utilities and cable expenses around $250/month)......total monthly expenses $985. $1800/mo - $985 = $815/mo cash flow.

As a long time flipper, I`m used to MUCH bigger spreads of equity, so I`m vacillating on whether to do this deal or wait for one that has similar monthly numbers but more equity. This small town doesn't appreciate much in the long run, maybe 5% on average.

I would be interested in getting your thoughts.

Ciao

@Joe Cassandra

I agree 100%.

Millions of households are in forebearance right now. They just kicked the can down the road until the end of the year. Many people don't understand that they are going to get a big bill for all the payments they missed. If they can't make their mortgage payment now how will they pay this big bill coming.

The only reason the economy and the stock market is staying afloat is because of the trillions of dollars the fed has infused.

Not to mention we have a presidential election coming up in which both sides have already declared that they will not accept the results.

Throw in evition moratorium, less office space needed, jobs not coming back, Covid uncertainty, and the the eventual end to the free money handouts and you have the potential of a major disruption.

Samuel Pentowski Well said! Everyone should read his post (4 posts back), that`s what we`re dealing with here, stick your head in the sand if you choose or start making preparations to survive and then thrive.

The pandemic is not the issue, the collapse of the world's economy is. You don't shut down the world's economy all at the same time because of a virus without dire consequences. This virus will end and another one will emerge, but there is no vaccine for what is coming to the world's economy. Death is with us every day, if you don't believe me go to this website and prepare to have your mind blown...worldometers.info 

Deaths TODAY...43,124...at least 3 deaths every second,  by the time you go to the website this number will be much higher.

Doomsdayer?....nope...just a realist.

We are in uncharted territory. We have never shut down the economy....worldwide. We have no playbook for this. The only thing keeping this boat, with a thousand holes, afloat is money being printed and the federal reserve pushing their magic little buttons transferring trillions of dollars in the blink of an eye. The housing and mortgage market got crushed with this latest bailout bill(please don`t call it a stimulus package), and we have yet to feel the affects. Call your mortgage broker tomorrow, they will tell you what`s really going on behind the scenes. The rules to qualify for a mortgage change everyday. Here in Charlotte, you cannot physically show a home. Renters don`t have to pay rent, landlords can`t evict, homeowners can get a 6 month or more forbearance plan (no payment to the servicer) and the lender cannot foreclose. Large companies and restaurant chains have told their lenders they will not be paying rent and it goes on and on and on. I`m no expert in anything, I`m just a regular joe with common sense and street smarts....this is unsustainable! 

Now having said all that, am I sitting in my house cowering in fear, binging on Netflix or obsessively watching news channels? Nope, I get outside with a pad and pen and try to envision what the new housing landscape might look like when this cat 5 hurricane finally clears, and it will eventually. The one beautiful thing about real estate is, it will always be here, it will always be needed and there are a 101 ways to acquire, hold and sell it. Take a three day fast from watching the news or reading endless articles from so called experts, and just use your common sense. The storm is coming, we`re not sure how bad its going to be, but prepare for the worse and be ready to pivot.

Go to Lowes or Home Depot in the morning, catch Contractors coming in for materials. You can see how their work truck looks, you meet them personally, shake their hands and exchange cards. You get as many as you want. They come and go all day. But I have found that the go getters get there early.