All Forum Posts by: Robert Williams

I'm a flipper in Washington DC and a good deal to me is one where I can net at least $50,000 upon exit. Frankly, if I used the 70% ARV - repair cost formula, I would never pull the trigger on anything. It's a good rule of thumb, but it's tough to find properties at that much of a discount in my market.

I've found it much more helpful to set up a detailed spreadsheet that covers all the costs of doing the deal.  If I'm netting at least $50,000 after plugging in my conservative numbers, then it works for me.  

As an example, my last flip was a property that was listed for $282,000 and I purchased for $250,000. It had an ARV of $379,000. I estimated repair costs of $33,000. If I had blindly abided by the 70% - repairs formula, I never would have bought the property unless it was at $232,300. I knew I could make it work at $250,000 so that helped me beat competing investors. I ended up netting $47,967 on the deal after all was said and done.

Yep...just to echo what Jon said, the first step for you is to establish the market value of the home. You want to establish the "as-is" market value and, if appropriate, the after repair value (ARV) if the home could use some work. Once you have those numbers it will be much easier to figure out if this represents a potential deal or not.

Sadly, the only sure way you have of making sure the filter gets changed on a regular basis in a rental is to do it yourself.  I've gone so far as to leave tenants with lots of spare filters so it would only take them 30-60 seconds of work and it still didn't get done.  

Hi Leland,

Since you still live in DC, there's no need to hire a management company unless you really want to be totally hands off.  It sounds like you've got a great plan, just make sure it includes registering the property with DCRA (which is separate from the business license).  

Finally, I would not spend the money to make it a furnished rental.  I've found that every time I've had a furnished rental in the past that inevitably I'd get a tenant who wanted us to take the furniture out and the extra rent just isn't worth the short term costs or long term hassles.  

-Rob

Hi Brian,

Wholesaling in DC is completely realistic.  I've bought DC investment deals from wholesalers and I'm starting my own direct mail marketing campaign to get more off-market properties.  I'll flip as many deals as I can manage/finance myself and will wholesale any excess.  I have a lot of investor friends who are always willing to pay a wholesaler for a good deal.

I know it seems like there wouldn't be, but there are a lot of motivated sellers who, for whatever reason, don't want to list their home for sale the traditional route with an agent.  People willing to sell their homes because they want fast cash or because of their circumstances.  The most common situations I've run across are estate sales and divorces.  The other common wholesale deal I've found are properties that are in just really bad shape.  

-Rob

Hi Jon,

Go for it!!  The biggest challenge most first-time flippers have is getting the cash together to do a deal.  You've got that cash being provided to you at a very reasonable rate (most hard money lenders would charge you a LOT more!)  

Just make sure you do your research on any deal before pulling the trigger.

Welcome to BP, Kene!  Good luck to you as you get started.  I'm always looking to buy wholesale deals in DC so keep me in mind once you get your first lead/deal!

Hi Jon,

Your idea is a great way to get started in real estate.  If you buy the right place, you could easily have your mortgage covered by your tenants.  The key, however, is buying the right place.  My suggestion to you is to buy something as close to metro/shops/restaurants as you can afford.  That will enable you to minimize your tenant turnover and maximize your rents.  Anytime you're evaluating a possible property, make sure you know exactly how much you would get in rent for each bedroom.  There's several good sites that let you check rental rates like padmapper and zilpy.  

Finally, yes, you should totally work with a real estate agent.  It doesn't cost you anything to do so as a buyer and you'll benefit from their knowledge of the local real estate market.

-Rob 

As a whole, there are less renters looking to move between November and March, but you can still rent a property out as long as its priced and marketed right.  Even within the timeframe you mentioned, there are easier and tougher times to rent.  It's really to find someone who's willing to move between November and December.  On the other hand, a lot more people move right after Christmas so January is a better month to have something available for move-in.  February and March also tend to be slow.

It sounds like the tenant is a non-profit or other business entity and that therefore this would be considered a commercial lease.