All Forum Posts by: Josh Dillingham

why would you give your 500k to him at 6-8% when you could lend it to someone else for 12% (which is what he is currently paying). it seems that you would be giving him a really good deal, what would you get out of it? the possibility that he defaults and you end up with his properties? you could be in the same position lending to someone else at 12% which is the same position that this guy's current lender is in now.

if you only have 20% with no reserves then it isn't likely the bank will give you the loan even if the seller carries 10 because with no reserve you have no margin for error if something goes wrong. if the seller is willing to finance 80% that could work, but you would still have closing costs and it is very risky to buy a property and have no reserves if something goes wrong. and if the seller is smart he will ask for proof of funds and when he sees you'll have nothing left after you give him 20% he'll back out of the deal.

congrats! I also got started with a 3-unit house hack 2 years ago. it has been a great experience and the money I have saved from not paying rent has allowed me to purchase 6 more units in the past 2 years. as far as finding tenants make sure to do a background check and call their previous landlords and their job to verify employment.

@Ericka Grant I have challenged an appraisal that came in about 40% low. I gave the appraiser different comps, he wouldn't move an inch. I paid for a new appraisal and it came in with the original number I thought it was worth. the bank wanted to split the difference between the two appraisals but I made my case as to why I thought the first appraisal was completely wrong and the bank agreed. I say walk away from this deal, then after 2 months when it is still on the market because someone else gets it under contract but it doesn't appraise again you can put in the offer for what it appraised at, they may be more likely to work with you at that point and you'll be a step ahead of the competition because you already have the appraisal.

a family member of mine has an Airbnb property. they had their house cleaner come in after their last guest had left. a few days later, before the next guest came in the cleaner returned to the house because he thought he had left something behind. when he went inside he found that someone had been staying there. the bed had been used, there was beer in the fridge, dog hair on the couch. this got me thinking about how easy it is for someone to log on to Airbnb and look at a particular property to see if there is availability that day, then you could just walk up to the house, knowing it is vacant and try all the windows and doors to see if the last guest left anything unlocked. this seems like a pretty clever idea for a vagrant looking for a place to crash. has anybody ever had this happen to them? I'm thinking these people got in through I bathroom window that the last guests had left unlocked and the cleaner hadn't noticed. .

that's a personal question only you can answer.  but you can think of it like this: what do you have more of, time or money?  For me I have more time than money and as an investor with less than 3 years experience I find great value in learning all the ins and outs of property management that I wouldn't otherwise understand if I wasn't managing my own properties.

lets assume you will pay a property manager 10% of gross rents each month.  How much money is that? and would you rather spend an average of 4 hours per month showing apartments, taking tenant phone calls, collecting rents and calling the repair guy and keep that money in your pocket. or would you rather pay the property manager?

so you will get $4800 in rent per month, $57,000 gross rents per year, assuming 50% expenses that's an NOI of $28,000? looks like you found yourself a 100 cap........

$5K to renovate the whole building? that seems steep, I think the guy is trying to rip you off.

if that 2 million cash is after taxes I would take that.  even if your goal is cash flow the 2 million will likely give you better cash flow than $120K a year.

lets say you invested $2 million in an s&p 500 index fund and you got an 6% that would be $120k right there.

you could loan that money out as a hard money lender at 12% and get $240K a year

@Erik Pfundstein you might want to get a copy of J. Scott's book  "The book on Estimating Rehab Costs"

https://www.biggerpockets.com/store/flipping-estimating-physical. 

if you really have know idea about estimating costs you could always pay a contract a consultation fee to walk the property with you and give you an estimate.  They would probably be willing to do it for $50-100 for 30 minutes of their time and a possible job.  After you give them a few jobs they would probably start doing walk-throughs for free because they will have confidence that it will turn into a job for them.