All Forum Posts by: Frank B.

Hello I found a seller that' has a townhouse they want to sale and need to get advice on if this is worth working a deal out of?

House zestimate $61,784
3 bed 3 baths
Rent in this area would go for $850

The houses comps in area only sold for 44-56k

Repairs none but back deck need finishing
Could use updated kitchen but it's rental ready

Seller owes bank mortgage 60K
She pays $620 month

I spoke with her about seller financing she is open to it but she wants some type of cash to move

I rarely ever see anyone talk about amortization. So I'm trying to figure out how I should be thinking about this. In the first years of a loan you pick away at the principal very slowly. Is it worthwhile to use cashflow to pay principal directly for a few years? Part of me says yes, but then I say if I had that extra cash I should probably be getting more deals and multiplying the effect.

So does it simply boil down to risk or is this part of a strategy people use?

Hi Everyone,  Hoping to get a second set of eyes on my first set of calculations.  This is a TK in Indy, good B neighborhood.  I still need to talk through all the details of the rehab but it will be thorough.  

Quick thoughts?

Cheers and thank you!

Ben

I have an opportunity to acquire this property in the Waco, Tx area.

I'm looking at purchasing my parents' house outside of Waco, Tx and renting it. The house was built in the late 70s and is about 1800 sq ft. Seems going selling price is about $115,000.

Rents in the area for houses like this seem to be around $1,300 per month.

Any thoughts on the key things I'd need to think through to check the match on this property and if it's worth purchasing?

TIA

I recently bought a house from two brothers who had inherited the property as part of their deceased mother's estate. I paid them what they were asking for it; almost the cost of the land only. The 90 house needed a full gut rehab since it had been vacant for almost 12 years. I converted and expanded it from a 2/1 to a 3/2, with an entrance foyer, new master bathroom, master walk-in closet, a laundry room, thereby adding 255sq.ft to the original house.

Location: Rapidly changing area with new commercial development less than 1/2 a mile away, and older houses being rehabbed. A sought after charter school. Huge swathe of land in 100's of acres 1/4 block away ready for a developer to swoop in and start building. Very stable neighborhood in transition. 3 exits away from downtown.

The numbers:
BP: $15,600
Rehab cost:$49,000
ARV: $110,000 as of right now
Market rent: $1050

The house sits on a 10,000 sq.ft lot that I intend to get te-platted into either 2 lots, or get permission add a mother-in-law's cottage/structure in the back to be rented out separately.

Following the BRRR principles, I started inquiring about refinancing the house. I was informed the lender will base his loan on the buying price and not the appraised value of the house as it stands.
My point: it is my business savvy to finagle a good deal, create value out of something. This seems like getting penalized for being smart.

Please help me figure out a way someone else has come across for a situation similar to this, and how they were able to get their cash out. Why is the improved asset not being regarded as the product against which to do a cash-out refinance. I intend to keep the house for the long term. I intend to buy more houses and lots in the area.

Thank you.