All Forum Posts by: Jay Dewberry

Hi Kocsen. You own a potentially 300k asset outright. I can definitely understand NOT wanting to sell that. Also you’re getting $1300 in under-market rental income a month. I am a proponent of keeping assets that are performing well.

Here’s a thought…since you seem to be leaning towards keeping the unit, perhaps consider getting a reputable property manager in the area. Many times they have the resources, forms and knowledge of the area and can assist with getting that new lease in place, as well as, obtaining contacts for repairs and also how to slowly increase rents back up to market. Have the P.M. put the house on notice of new management and an in home inspection to review who’s currently living there, v/s who should be there. Perhaps you can contact your acquaintance to see if he/she has a copy of the lease to compare.

In my opinion 13K+ in repairs is a minor bump in the road for a $300k asset that’s pulling in over 15k/year. Heck…a bank would probably give you a Line of Credit or Rehab loan for the repairs. Repay it in 1-2 years and see if it can be claimed on your taxes along with the depreciation to offset your taxable income. Just thoughts…hope it works out.

Good info

Hi Tim. I tend to agree with @Timoteo Guy as far as the repairs. Your repair costs can get out of hand very quickly if you’re not prepared. If it were me, I would definitely get some GC’s out there to give me some estimates as well as general advice on your major expenses such as that HVAC system, electrical system, and siding. You may find that it may not be worth it after a thorough estimate has been drawn up. The last thing you want is to have tenants and a fire occurs only to find it was due to faulty/old wiring.

What is the ARV? What kind of neighborhood is it in? Is that market stable, declining, or improving? Financing numbers? Just some thoughts. But if you feel this could work for your particular goals, get the property under contract. Make sure to include your contingencies in case you discover it's a nightmare property and want out. Then analyze, analyze, analyze.

Hope it all works out. Keep us posted as I would love to see the before and after in the success stories forum.

Hmmm...sounds like getting this property under contract will be a big deal. Sounds like she's fairly motivated in which, perhaps, paying her price will be a good thing. I've even seen deals where it was even beneficial to pay MORE than the asking price. Definitely keep open communication with the owner. Try and lock the property up and follow up on you contingencies. Keep it calm, professional, and collective. The hustle will come after the property is locked up at her (or your) price. Good Luck!

Welcome to BP Andrew and congrats. It's great to see potential success stories in the making and I hope to add this one to the pile. The first thing that comes to mind is to make sure you analyze...analyze...analyze. From the initial numbers, this does indeed appear to be a good fix and flip in the making. However, make sure to try and build some rapport with the owner. Perhaps you can get an idea of her motivation and why she wants to sell. You want as much info as possible. If your initial visit to the property works out, perhaps try and get the property locked up(contractually). Still try and negotiate a lower rate if possible. MAKE SURE YOU HAVE CONTINGENCIES IN YOUR CONTRACT. Once the property is under contract, get some rahab guys in there to estimate the costs. This could be a good tool to justify a discount...OR...a good tool to justify backing out of the deal. You'll never know. IMMEDIATELY shop the deal after you contract...If it's the deal that it seems to be, buyers will jump on it immediately. Use the BP Calculator...it should help. Just thoughts...either way congrats and keep us updated on your progress.

Dennis,

What I would do is compare similar criteria such as the following:

Square Footage

Number of Beds/Baths

Garage(2 car/3 car)

Lot Size

Age/Style/Condition of home

Proximity of homes(ideally you'll want the comps to be as close to the target home as possible...preferably in the same neighborhood)

Age of Sale(You'll want your comparables to be no more than 180 days old(90 days or less if possible))

Other amenities

A combination of these features will give you an idea of the price that buyers will consider paying for your home in move-in ready condition. Considering it as an average is fine as well. If your home meets these conditions, it's reasonable to guesstimate that your property will fall somewhere near that average. If you want to take it a step further, you can take that average dollars per sqft(minus any inaccurate comps) and multiply it by the sqft of the home you're interested in and this will give you a good base price. Hope that helps.

Wow. Thanks for the heads up @Stan Sugarman. I think I may have to drop by a meetup and check you guys out.

Hi Henry,

A good place to look for REI meetings is meetup.com. I think the two largest on there are Atlanta REIA and GA REIA. I've personally attended the Atlanta REIA and had a pretty good experience. It's also a good place to network and learn. You'll likely have to pay each time you meet if not a member of the organization. However in my opinion it's worth it even if its just to be around like-minded individuals.

*edit*...double post

Perhaps I'm missing something. There was a lease violation...correct? If so, is this not grounds for eviction? Perhaps consulting a couple of real estate attorneys to determine your options. Noncompliance and property destruction seems to be good reasons for either an fine/fee or deduction from the security deposit for the costs to restore the property/land back to the original status. I know it may seem harsh, but if tenants aren't made to respect the lease and/or property that you own, they have to go.