All Forum Posts by: Greg Baker

@Chris Garzino  Start by digesting all of the free resources. 

1. Listen to the pod casts -http://www.biggerpockets.com/renewsblog/category/p...

2. Go to your local library, sign up for a free library card, and start reading free books  http://www.biggerpockets.com/renewsblog/2013/04/14... .  You will find even more great titles based on the recommendations from the podcasts

3.) @Brandon Turner writes tremendous starter blog posts and e-books.  I'm not exactly sure how, but if you can find a chronological list of Brandon's blog posts by title, that'd be tremendous.  I've been trying to find this myself.  There are many other great free blogs hosted by BP, @J Scott is another that may interest you.

4. Search the site - At the top right hand corner or via your BP phone app, you can search by keyword.  If you search wholesaling, you'll find tons.  

5. Once you are through 30-50+ free podcasts, 5-10+ free high quality books, Numerous targeted blogs, targeted threads based on your searches, THEN you can really start reaching out on an individual basis either through messages to respected members or by purchasing specific resources.

6. Find wholesalers in your area, it's really not hard, go on craigslist or check your local newspaper in the classifieds, you will see WE WANT TO BUY YOUR HOUSE.  Call them, let them know you'd love to dedicate your labor and time to whatever they need in order to learn.  Even if it's just weekend hours, they may be interested in having you stuff envelopes, paint, whatever.  

If you've read through all of that, I will do my best to answer your original question, although I've never wholesaled anything myself -> 

Step 1 - Market to find motivated sellers - search for threads such as Driving for dollars, Direct Mail, yellow letters

Step 2 - Determine fair offer price - search for threads such as 70% rule, rehab costs, after repair value, talking to motivated sellers

Step 3 - Make offer, get house under contract

Step 4 - Find/Communicate with end buyer - Determine fair final sale price - search for threads such as buyers lists, there are differing philosophies on buyers lists.

Step 5 - Close - search for threads such as double close

Within each of these steps there seem to be numerous, near endless, rabbit holes of information that you must learn.  Combine the research aspects with my #6 from above and you may find success!

@Anthony Deringer

Full Disclosure: I do not own any SFH or Multis at this point-

A few things I would consider though: 

Management 8% - Have you found someone to do this for 8% or are you counting your own time?  The PM may have additional cost charged every time a unit is turned, with 4 units, that could be costly on an annual basis.

Maintenance 5% - This seems low, I was listening to a few recent podcasts where Brandon Turner, Ben Leybovich  and some others were referencing their maintenance costs being much higher on multis, I think they said something along the lines of the "65% Rule" rather than 50% meaning only 35% was left for Mortgage.  I also do not see a "capital expenses" listed anywhere.  There is more plumbing, more HVAC, etc. to plan for.

Misc. Grounds, Well, Septic - $50 - May want to check on this, how often does the septic need to be pumped?  I assume grounds alone would be $50 a month.  Are there any common area utilities that you pay for?

Taxes - I am jealous, I pay that on my $90,000 personal home lol.

If I were doing quick calculations I would say 

Gross Income - 3073

Operating Expenses

35% - Vacancy, PM, Cap Ex, Maintenance - 1075

Insurance - 100

Taxes - 384

Misc. Grounds/well/septic - 50

Total Expenses - 1609

Debt Service - 1273

3073-1609-1273 = +$191 pre-tax cash flow per month with 25% down.

Cap Rate - 5.6%

Cash on Cash - 2.9%

Re- Garage - Any chance you can "rent" this quite simply as garage spaces or storage?  Maybe you offer it to your senior two tenants for an extra $50-75 a month or something along those lines they can park?  The other gentlemen addressed the city issues.

Once again, I'm purely in the learning phase here, so please provide feedback on my numbers.  

Joshua McGinnis I recently read @j Scott's guide to flipping houses. Within his book, he actually had checklists of questions and scripts to assist with the conversation. You can find his book here on BP and on Amazon. Good luck!

How do closing costs work on raw land? Steven Butala mentioned buying for $1,000 and selling for $2,000. Closing must not cost a couple thousand on each end?

@Dave Toelkes 

Hi Dave, sorry, my joke/sarcasm did not translate well!  My comment was, until this point, I've just done my taxes myself using Turbotax, but moving forward, I'll definitely have to utilize a tax adviser.  Thanks again for your expertise.

Thanks for the advice everyone, that definitely clears a lot up for me.  It sounds like this will be my last year (week) to have TurboTax as my tax expert...

Hi everyone, few questions, I'm in New York if it matters. I'm in the process of researching to purchase my first buy and long term hold. I'm considering partnering with someone 50/50 to make the first purchase less impactful on my family's finances and also in the event that we learn some hard lessons it will not be as financially painful. The properties I'm considering would be in the $60,000 range, conventional 25% down, with property management. I'm really trying to determine if partnering to "save" $8,000-$10,000 is really worth it with the additional costs I'm going to ask about below: 1. Any estimated cost to have an attorney draft up the legal contract between my partner and I covering everything including all the "what ifs?" 2. I was not planning to form a LLC, would this be more of a requirement with a partnership? If so, estimated cost to set up the LLC and annual cost? 3. How do the tax benefits of depreciation work when there are two partners who both put in 50/50 and are both listed on the mortgage? #3 is really important to me because I'm paying my six figure school loans back with income based repayment (IBR) and will utilize public service loan forgiveness in about 8 years. I'm hoping the depreciation will help offset annual raises at work and keep my monthly income based loan payments from spiking. Thanks, Greg

Originally posted by @Shane Waller:

Thanks for the comments, I would love to buy the property but his payoff is a little much for me right now. I am sure he would settle for payoff. In a few years I may consider if he don't sale it. I was just looking at how to make some $ off of it and have him to be happy also. The more I think about the management the less I want to do it. I don’t mind my own but others for a few bucks a month hmmmmmmm. I may come up with some other ways to help him bc he is desperate to move asap. He was lucky enough to talk to me last week before my old evicted tenant tried to wiggle his way into his house. I intercepted that and nipped it off. Karma came quick for my old tenants. thanks again

 Have you considered purchasing it through seller financing?  

Wow I just google imaged hog wire fence...when done aesthetically, that looks great.

Help!  I wanted to check out tax rates within some nearby areas and started out here: http://www.osc.state.ny.us/localgov/orptbook/2012t...

I was quickly baffled by the differences between counties, municipalities, class, school district, etc.  

After doing some reading here http://en.wikipedia.org/wiki/Administrative_divisi... and also googling images of county wide municipality, town, and school district maps I THINK, I have created a list of "truth" statements, and sketched out a visual to represent the relationship between counties, towns, villages, cities, school districts, and the term municipality.  

Please let me know if these "truth" statements are true.  I am working within the filter of New York State only, EXCLUDING New York City.

"Truths":

• Municipality is a governing unit, not a physical boundary
• States are the major division of the country
• Counties are major divisions of the state
• Towns are major divisions of the county
• Villages and cities are located within a town or towns
• Villages and cities are located within a county or counties
• All towns in NY are within a single county
• Cities and villages may or may not be named the same as the town(s) they are located within
• School Districts can span multiple counties, thus they can span multiple cities and villages

Visual Sketch:

Thanks!