All Forum Posts by: Dustin Frank

I once had a child abusing, alcoholic mother, hoarder, living in a house I acquired. "One time she left the gas stove on full blast and passed out, upstairs tenants thankfully called the fire dept.". 3 calls to Social Service regarding the welfare of the child and no action taken. Took her to court and won..still haven't seen a dime. I had a lease that protected her more than me in that situation....lesson learned is don't skimp on a good lawyer and update your lease as situations arrise.

Everybody has their preference and tolerance of work involved. Another option is what I call a "slow flip" rent it out immediately so your not losing income, tenant moves out and you upgrade a few items and raise the rent, after 3-5 years you have a nice unit that rents for top dollar and can be sold for a nice profit.

Possibly a little off direction but as far as wrong ways to invest I can offer this ..keep your business separate from your personal finances and don't get into the wrong partnership with somebody. I had a business partner file for bankruptcy and since I personally guaranteed all of our debts, guess who now owed his defaulted balances? I'm still recovering and will be for a few more years.

there's only one reason for no inside pics and not wanting strangers walking through the house...classic hoarder case. Make sure you figure in the cost of new carpet before you make an offer.

You certainly don't need a license to find good deals or become a successful investor. With that being said, I am glad I acquired my real estate license for the simple fact that I see deals before they hit the market. It's not uncommon for Realtors to ask other Realtors how they should market a property or talk about how their current client is going to get rid of 10 rentals over the next year or two. I hear comments like that and think "cha ching$$$...wish I had the investors lined up to make an offer on all 10!"

So I have ran into a wholesaler who has shown me a couple of promising deals. Both deals are listed on the MLS for about $30,000 more than this Wholesalers cash price. The wholesaler is not the agent and the MLS info mentions nothing regarding the wholesaler. How is this Wholesaler most likely structuring and getting these deals with an already active listing?

Originally posted by @Matt M.:

It's late, but I didn't see taxes and insurance. 

 What do you usually figure in for ins? do you use a percentage or a value range, or do you usually call for quotes when figuring expenses?

I am very familiar with the neighborhood and area and know that renting it out would not be an issue.

It is not zoned for multifamily. So essentially it is an illegal duplex. Any way to get around the legality? perhaps join them with a connecting commons area?

I ran it through the calculator to the best of my abilities and came up with the following:

Purchase Price: $339,000.00 

Purchase Closing Costs: $4,000.00

Estimated Repairs: $5,000.00

Total Project Cost: $348,000.00

After Repair Value: $339,000.00 

Down Payment: $67,800.00

Loan Amount: $275,268.00

Loan Points: $4,068.00 

Loan Fees: Amortized Over: 30 years 

Loan Interest Rate: 5.000% 

Monthly P&I: $1,477.70

Total Cash Needed By Borrower: $76,800.00

Monthly Income: $3,100.00

Monthly Expenses: $2,263.03

Monthly Cashflow: $836.97 

Pro Forma Cap Rate: 8.19% 

NOI: $27,776.00

Total Cash Needed: $76,800.00

Cash on Cash ROI: 13.08%

Purchase Cap Rate: 8.19%