All Forum Posts by: Jay Dewberry

Hi Terrance. Not sure how close this is to you, but perhaps this will help...and they meet in about an hour TODAY! Get going sir! Make it happen in 2017. Good luck.

Welcome to BP Josh. Good luck in your future endeavors and analyze, buy, repeat!

Hi Tim. From my initial look at your figures, I would have to agree with @Jim Adrian on the PM. You would want to include a figure for this even if you decide to self manage. In my honest opinion, I would want to see a higher number on the repairs as well. Based on the purchase price, a figure in the neighborhood of 7% or better would be ideal. I ran the numbers and even with a modest $5k for repairs, you will be approaching the break even point on this. Perhaps getting the property under contract at a lower purchase price would help...$77k makes the numbers seem promising. Just thoughts. Good luck.

Hi @NA Loraine Nielsen. Welcome to BP. From my initial review of your numbers, I will have to agree with @Kristopher Hanks. Your numbers for Repairs and CapEx seem low compared to the purchase price. I think you'd be in the ball park if you raised them to at least 5-6%. Personally, I would account for approximately 7-9% for each. Otherwise your analysis seems pretty solid. Good luck on the deal and keep us posted.

I would have to agree with many of the statements above. If you're dealing with someone that has a problem with your cut...get another end buyer. However, from what I've read and understand, the general consensus is if in the neighborhood of $6k or less...straight close. If above 6k...utilize the double close method in order to minimize the previous data on the HUD-1. But in my opinion, if a wholesaler has left enough profit tied in for the end buyer, there should be no reason to complain. If so, perhaps you're dealing with an inexperienced and/or greedy end buyer.

Hi Kinley. Question...you had $185,000 equity in your home to be able to acquire a HELOC?? How old is the home? Was it a cash purchase(i.e. was it free and clear up until then)? What are the scheduled payments for the HELOC? AS @Kevin Siedlecki mentioned, I think we'd need more numbers to make an educated analysis for you. But from what I'm seeing...even at $2k/month, I'd assume you would end up with negative cashflow on this one. This would prompt me to lean toward selling and trying to obtain the rest of the equity to use as a down payment on the next investment property. Just thoughts...hope it all works out.

Analyze

Buy

Repeat 

Hi Chris. Welcome to BP. Quick question. Is there any particular reason you’re choosing a 15yr mortgage instead of stretching it out to 30yr, to lower your monthly payment? Doing so would provide upwards of $3000/yr extra. Also, are you factoring 10% for each (vacancy rate, taxes, insurance, repairs, accounting, supplies, lawn care and pest control)? As it would seem to be very high. Or is it 10% total for all…which would seem to be a very low estimate. Just thoughts…I believe with a little tweaking and getting the property at a reasonable purchase price, you may be okay…but the numbers have to add up. Good luck.

Hi Dan. Welcome to BP. I will defer to more seasoned investors, however here's my two cents. House hacking can be a great way to pick up an asset with little cash invested on your part. With FHA, unless things have changed, you only need about 3.5% for the down payment and you would need to become an owner/occupant for 12 months. So this may be a pretty good opportunity for you and your fiance. When you run the numbers in the BP Calculator, perhaps run them with a 3.5% down payment v/s say a 5%, 10%, and 20% down payment. Perhaps the velocity of you Cash on Cash return may change depending on the income and analysis. As for best financing options, that may depend on your personal investing goals, strategies, and reserves. Hope this helps. Good luck and keep us posted.

Hi James. Welcome to BP. I will defer this to other more seasoned investors. However, here’s my 2 cents.

From what you’ve mentioned, it sounds like the owner is somewhat motivated to sell because he has become a tired landlord. This is common for many owners that self-manage their units. That would be clue #1 that for the right price, he may sell relative quickly. I would definitely run the figures in the BP Rental Calculator because what may seem like a deal on the surface can actually be a nightmare if not analyzed correctly. Also your analysis can be a justification/negotiating point to obtain a lower purchase price.

My next concern is the self-management. Many times landlords have deferred maintenance issues due to lack of proper repairs, maintenance, and skimping to save money instead of proper professional upkeep. This could be a possibility as to why the fire occurred. This is clue #2. I would absolutely get some contractors/inspectors out there to advise me on the repairs. If you decide to lock the property up in a contract, MAKE SURE to have contingencies in there in case you discover it’s not worth the costs to repair and bring up to standard.

Which brings me to clue #3…the title. Why is a property that’s “paid for” having title issues? Getting a title company (or attorney depending on the state) to check for liens/adverse actions on the property is a must.

As to your concern with re-metering the units, maybe get the advice of a General Contractor, Property Manager, and/or check local ordinances to see if its allowed…and if it’s worth it. However, these will be reflected when you perform your analysis.

Lastly, good luck. It looks as though once the two units are repaired that you’ll have potentially $6000+/month in Gross Income. As long as your overall monthly expenses remain below this, you may be in biz.