All Forum Posts by: Eyal Goren
Eyal Goren has started 15 posts and replied 46 times.
Post: Buy & Hold in DFW - can't make the numbers work - what am I missing?
- Investor
- Posts 47
- Votes 17
Quote from @Skyler Bissell:
Some markets just don't pencil. But it's also heavily property dependent. If the property won't work for that amount, offer less. Or look elsewhere. I'm in Seattle and there haven't been real BRRRRs here in years haha
Thanks. I guess you're right.
Post: Buy & Hold in DFW - can't make the numbers work - what am I missing?
- Investor
- Posts 47
- Votes 17
Quote from @Gregory Schwartz:
You're applying a BRRRR strategy to a turn-key rental house. There's no meat on the bone here. Heck, the a/c is brand new. The house in your example is prime for someone to put 25% down, have a $2000 month mortgage, and make $2400 in rent. That extra $400 covers maintenance, capex and vacancy.
So to answer your question, YES you are wrong. You can still BRRRR in this market but not when you're looking at a class A house that could rent for $2400 tomorrow.
Can you share numbers of a hypothetical deal that does work?
Buy - $X ??
Rehab - $Y ??
Rent - $Z ??
Post: Buy & Hold in DFW - can't make the numbers work - what am I missing?
- Investor
- Posts 47
- Votes 17
Thanks.
Post: Buy & Hold in DFW - can't make the numbers work - what am I missing?
- Investor
- Posts 47
- Votes 17
I guess that's true. But I think that as a whole, when you look
1. a market with more than 2% property tax
2. the current ~7% interest rate
3. the current 0.6-0.8% rent/(all-in costs)
any property is simply isn't going to work.
The only param you can somehow control is by increasing the rent by rooming/section 8.
Unless I'm missing something?
Post: Buy & Hold in DFW - can't make the numbers work - what am I missing?
- Investor
- Posts 47
- Votes 17
Hi there,
I've been researching the DFW metro in the past 3 weeks and running the numbers on many many deal opportunities, but nothing actually works out as a long term business.
We're looking for a standard home, nothing fancy.
Here's an example.
https://www.redfin.com/TX/Fort-Worth/9225-Nathan-Dr-76108/home/30994800#property-history
Since we were so frustrated from the numbers, we unrealistically said, that we'll get the property for 50% discount.
So instead of the asking price 300,000 we'll get it for 160k.
Rehab 55 + hardmoney interest + closing.
And the entire deal costs - $249,378
Here's the complete calc
The only way this does work is if I take a cash-out refi of 63k (which is 20% of arv) instead of 210k as my original plan (which is 65% of arv).
My conclusion from this is that you really can't invest in buy & Hold/BRRRR in this market if you want to role your money to more properties - am I wrong?
Thanks.
Eyal
Post: Low number of rentals in a neighborhood - good or bad?
- Investor
- Posts 47
- Votes 17
Quote from @Kiernan LaFaver:
It depends on WHY there’s no rentals. What’s the typical income in the area? If it’s a stable population with good roads, restaurants, schools, hospitals, etc…it’s very likely there is low turnover due to high tenant retention rate. Which is good from an investing position as you know you’ll have long term tenants. You can get top dollar likely, but it still needs to be reasonable and comparable.
if it’s a declining town with not many attractions or amenities, then it’s likely there’s no rentals available because nobody wants to live there.
mot sounds like you may be describing more situation #1, in which case it’s a ripe opportunity if you can get a deal on a property
That makes total sense. Thanks!
Post: Low number of rentals in a neighborhood - good or bad?
- Investor
- Posts 47
- Votes 17
There's almost no rentals in the neighborhood I'm searching in.
If our strategy is BRRRR - is it a good thing that there's a low number of rentals in the area?
From one side - that's going to be unique, so for the people who do want to rent in that a area there's not many options - will that allow a rent increase?
But, maybe there's just no demand for rentals in that area?
Was wondering how experienced RE investors look at that fact.
Post: Do you use interior designers when flipping a home?
- Investor
- Posts 47
- Votes 17
Quote from @Shawn Parsh:
Eyal,
I guess I'm the odd one in the group, but I have never paid for an interior designer on my flips. From my perspective, if you know your market well you should know what buyers like and are looking for. As far as colors go we always try to stay fairly neutral. In my experience if you have three people picking a color you will have at least two different opinions. The chance of me picking a color that every potential buyer would like is slim at best.
Having said all of that I have no idea what an interior designer cost so maybe by hiring one it would increase the bottom line, but someone would have to show me the numbers. I have a couple ladies on my team that pick our colors, cabinets, countertops and so on. They are not interior designers, but they seem to have a pretty good gauge on what looks good.
Thanks I appreciate it. Sounds very logical and simple.
Post: Do you use interior designers when flipping a home?
- Investor
- Posts 47
- Votes 17
Just to clarify - we're looking to flip our first house in Indianapolis. Our budget with rehab is around 150.
We do understand the value of professionals and I guess a great interior designer can actually pay itself (by increasing the ARV).
Just wanted to get the community's take.
Post: Is it common for a broker to ask a $500 fee in case we back off the offer?
- Investor
- Posts 47
- Votes 17
We're about to sign an offer. We're seeing an unfamiliar clause and wanted to verify that we're not making a mistake.
The broker asks for a $500 fee (they say they reserve the right to retain/charge in its discretion, in any non-closing event to cover for its services).
Is it common for a broker to ask a $500 fee out of the EMD in case we back off the offer?
**I understand the need for a fee for all the hard work they're doing - but prefer to have strict numbers and processes