All Forum Posts by: Eric Blair

So I'm still new to investing. I have found a potential 2nd property. I'll list the details below

Owner died so it's an estate sale by the family. They listed this house at $239k, which is the going rate for any other house in the neighborhood. Upon further inspection I discovered that that roof needs to be replaced. It's leaking, which caused water damaged to the ceiling drywall. House smells like cigarettes, so obviously painting. 

I got a quote for the roof for $9500, which includes replacing the damaged OSB. The paint and minor repairs of the house I can do myself. I figure $3k - $5k for the repairs. So clearly the house is not worth $239k. I want to offer $215k.

Now because I do not have any capital (lost 35% in the market since Jan) I am getting a HELOC on my primary for $50k, which will be used as a down payment. Then either a conventional or DSCR loan, if that is possible.

Here is the house detsils

location is Prattville AL

$239k

1440sqft

$43k down

Loan was quoted at 8%

HELOC 7%

Up to $15k in repairs

House will only be worth $239k afterwards

Rent will be $1700 (could possibly be $1800 but that's a stretch)

Mortgage after PITA will be $1200 and then $300 for the HELOC (interest only payments for the draw period)

Cash flow $200

I'll profit nothing because any remaining money will be set aside for maint and CAPEX

So here I am asking you seasoned investors to roast my deal. I have not made any moves yet. If the seller rejects my offer then I move on because the numbers are much too tight. Thanks y'all

@Savannah Wallace thanks for clarifying this!

@Lindsay Davis thanks for the response. Really it's a mix of the 2. I don't have any capital (far less after today) to get a new property. Even if I could find a new property I was hoping to get in to multi door properties but those are so uncommon in this area 

@Ashish Acharya hello, I wanted to ask since you seem knowledgeable in this topic, a question about LLCs. Is it advisable to have an LLC already setup before purchasing a rental and then using that LLC to buy the rental?

I have the ability to assume a VA home loan. I am seeing several for less than 4% be advertised. Would this make a good strategy to securing a new property for a cheap rate?

@Wale Lawal thanks for this! I'll keep this in mind

@Ian Kiefer thanks for the response! When it comes to cold calling, how do you find your deals? Is this one of those situations where I should have the cash in hand to buy the property? I ask because right now I'm in the "saving my money for a down payment" phase

Take this with a grain of salt as I'm a noob myself, but I've had a few tenants in my property. I always meet in person. You get a real good feeling for people in person. Don't listen to sob stories. Don't believe them when they brag about how clean they are. Pay attention to how the dress, timeliness, how they speak to you and who they show up with. Also, get a sudo number. Google voice or mysudo. Use a business email, not a personal one. Everyone else already laid out the criteria. Also check local laws to ensure you don't accidentally commit a crime

I'm in the Montgomery area if you wish to DM me. I'm a new investor but I'd love to have the details on what you are wishing to unload. Thanks!

Hello,

I am still new to real estate investing and just looking to me local agents or investors in the Montgomery area. I'm really at a loss on how to obtain my next deal. I've only got one property so far. Thanks for any help!