All Forum Posts by: Freddie Taylor

@David Karcz

I haven't been in the house yet.  I just found it online this weekend, and I e-mailed the owner my contact information, so that we could set up some time to go through the property.  I planned on having a GC walk through the property to identify what exactly needs to be done to get the house rehabbed, as well as an inspection.  I've quickly looked using Zillow, but that can be inaccurate at times. I didn't check the comps using the county's website, but I will also do that prior to submitting an offer on the property.

Thanks for the input @Brian Flack.  I'll keep you guys posted on the status of this deal.

I have a 4BR, 2BA (1,960 sq. ft.) property that I am currently looking at, and it could possibly garnish some large returns if executed properly.  The property is located in a lower class neighborhood, but it's right next to one of the country's largest chiropractic school.  The students at this school are graduate level students, and are older than your traditional college student, and tend to be more mature.  Some of the students even bring their wives and kids with them when they move here to attend college for an uninterupted three year period.  The house is a completely trashed, everything has to be rehabbed down to the studs, but the asking price is only $5K; and Zillow has it listed at $72K.  My brother is a union electrician, and he's also able to do most major construction work, so we would be able to do most of the labor ourselves.  How should I go about evaluating whether or not this is a good deal?  I still have to research the numbers more closely, but I feel this could be profitable with a quick flip, or even a buy and hold. 

Thank you @Glen Smith, and the same to you.

@Riley F. Thanks for the suggestions on websites. I'll get on those sites and check this piece of property out. Also, I heard REI's echo your sentiment about not wanting to own in the ghetto; I've also heard the opposite. I guess it ultimately comes down to whether or not the numbers make sense. Thanks again for your input Riley!

@Andrew Dunham I appreciate you taking the time to respond. The numbers on this property demonstrate that it should cash flow pretty well, even with shorter amortization schedules. One of the tenants in there has been in there for 19 years, and he doesn’t plan on going anywhere unless he’s forced to by death or eviction. I realized that’s not a guarantee that he’ll be around tomorrow, but I would prefer to start of my ownership of this property (if purchased) with a good tenant, rather than having to get the unit ready to rent out. Thanks again for your response.

@Rob Donovan Thanks for your response, and I agree that running my numbers based on speculation is very risky; and it's a risk that I am not willing to take at this point in my REI career. However, the current income from this property seems to look pretty solid to me, based on my preliminary research. Thank-you for the recommendation on utilizing the rental property calculator on this site. I've only been a member for about five days, and I haven't had a chance to explore all of this site's resources. I will be checking that out today, and running the numbers for this property on it.

Thank you @Andy Mirza for the clarification.  I have never heard of these neighborhood classifications before, but they will definitely be useful down the road.  

Best of luck with your situation @Glen Smith, I hope your situation works out well for you.

I founda two-family conversion home that I plan on eventually placing an offer on, but I first wanted to hear some feedback from the members of BP.

DISCLAIMER: For the unscrupulous folks out there who plan on using this post for ulterior motives (i.e. trying to undercut me, and get the property for themselves)…I have the right of first refusal for this property, and contacting the current owner will only oust you as a “not-so ethical” RE investor; so I would recommend not going that route.

Here are the details for the honest/ethical REI's: The property is located at 1346 Christie Street in the City of Davenport, County of Scott, State of Iowa; which is also my hometown; and it's also the RE market that I am most familiar with. The current owner purchased the property via contract in 2000 for $281,000. However, the contract included other properties, so the purchase price is not solely reflective of the abovementioned property. The property is currently assessed at $38,070, and it assessed for $36,470 in 2014. I realize that these assessment values aren't necessarily the equivalent of the fair market value of the property, but I need to at least get an idea of what the property is worth.It was also very challenging to pull accurate sales comps on the property, because of the unique situation of the property (very small 3 BR unit/very small 1 BR unit). The 3 BR unit rents out for $375, but easily could get $400, and the 1 BR unit rents out for $250. That's $625 per month in total rent received, with the potential for $650 per month. The good news is that the tenant of the 1 BR unit has been there for 19 years, and has no plans of going anywhere soon (the good lord willing); plus he's willing to barter his handyman skills and pickup truck in exchange for reductions in rent.

Any halfway decent REI has probably already figured out that this property is located in the ‘hood, based on the numbers listed above; but that was one of the things that was appealing about this deal to me…the low investment costs associated with this piece of property, as well as the ability to possibly cashflow an amount equal to the house payment (including principal, interest, taxes and ins). I believe that there's still money to be made on this property, even though it is situated in the ghetto. In fact, some would argue that there's potential for higher cash flow margins in lower income neighborhoods. I'm curious to hear a sidebar discussion on this topic as well.

The current owner of the property is a co-worker of mine, and she is also one of my real estate mentors, which is how I acquired the right of first refusal. She is approximately 55 years old, and she is simply tired of the property managementheadache; but she’s not desperate for a dollar, and won’t just give me the property for next to nothing. She has stated that she needed to do some research in the Recorder’s and Assessor’s databases, before she could determine an actual asking price. She was thinking somewhere around $30,000, but that was without her doing any research. I know that she’s not hurting for money, plus she’s extremely busy, so I printed out that information, and gave it to her on Thursday (4/2) to help expedite the process.

The reason for me posting this situation on here is to hear the feedback (both positive and negative) regarding this potential deal. One of my questions is how long should I wait before I follow up with her? Does the relationship that I have with her affect the way in which we execute the deal; in other words, how does a transaction that is not arms-length affect the process? Could this deal still be considered as an arms-length transaction? If she doesn’t provide an asking price, how should I go about officially submitting an offer to her, and when? I want a great deal, but I also don’t want to offend somebody that I look up to, so how low of an asking price should I present to her? I’m sure I have more questions concerning this deal that I just can’t think of right now, but I will post them up as a discussion ensues.

If you’ve made it thus far through my post, I want to first say thank-you for taking the time to read my it. I reiterate that I appreciate all feedback, and I look forward to reading all of your responses.

Thanks again,

Freddie

I'm a newbie to BP and to RE investing in general. Can someone please explain to me the term "war zone" that is being referred to in the posts on this thread. I assuming it's a generic term for a high violence area. How much violence has to occur within a specific area for it to be classified as a war zone? Is this term a BP term, an REI term, or a term that's universally used? Who designates these areas as war zones: a government entity or the general public?

I will make an offer in the next five days.

I recently purchased my first investment property last year, and I have been working as a Realty Specialist for the Federal government for the last ten years.I am very familiar with the land records searching process; the drafting and issuing of easements, license, permits, leases, consents, etc.; and I am also familiar with the historical, environmental, archeological and cultural laws associated with real property transactions.

The reason for my post is that I am looking for a mentor to provide me with guidance on how to optimize my time spent investing in real estate.I am looking for a mentor who is successful in this industry, and has a passion to teach.

I am a realist, and I don’t expect the mentor’s motives to be solely altruistic.I understand that he/she most likely didn’t get to their level of success by strictly operating with philanthropy as the primary driver of their business.

Like I said previously, I am looking for somebody who has previously relied upon a mentor themselves to obtain their success, and they would now like to sincerely pay it forward by being the mentor, instead of the mentee.This person must be honest, reliable, and willing to educate me on their lessons learned throughout their time in the real estate industry.

In return for the mentor providing the above stated services, I will be coachable, dependable, and willing to do anything (legal and ethical of course) that it takes to achieve my “why”…I’m that passionate about my “why”!!!

If you feel that accepting this offer (provided that you’re qualified) will mutually benefit both parties involved; then I encourage you to contact me, so that we may further discuss the proposed arrangement.I appreciate you taking the time to read this, and I wish you all the best in this exciting journey known as real estate investing!

Very Respectfully,

Freddie Taylor