All Forum Posts by: Jaysen Medhurst

@Jeff Petsche, yes I always go for actuals. Too many variables from town to town on taxes.

@Jeff Petsche

10% vacancy

8% CapEx

8% Repairs

10% PM

@Evan Farren, how long until the outside is done? 1st thing people are going to see and you want to make a good impression. IF the outside clearly looks like it's being painted/new landscaping, you might be okay, because prospective tenants will see that your improving the property. Just be sure to assure them that all will be finished prior to move in. Good tenants aren't going to want to deal with the stress of an in-process property as they're going through the stress of a move.

@Dean Boyer, shop around. You do not need a commercial loan based on what you wrote. You may not get terms as good as owner-occupied, but better than what you mentioned.

Start making some phone calls. Since you're at it, I would dangle the idea of refinancing your entire portfolio under 1 blanket loan. That's a good bit of business for the bank and puts a lot of capital in your hands to do more deals.

@Gary Grimes, your mortgage payment sounds very high. Even with PMI, I'd expect you to be <$600/month. What are the terms?

Not much sense in selling at the moment. I don't think think you'll see any profit. Even if you get $110k (which is unlikely, since 15%+ appreciation in 2 years is A LOT) you'll be lucky to walk with $5k after paying the RE agents, closing costs, and renovation expenses.

What would the house rent for? That may be an opportunity. You'll just have to do a very strong analysis of what the home needs and your expenses going forward.

@Clayton Crawford, I assume you've done all your analysis on local rents, etc. 

I'd get a solid list of what you want the inspector to check out. One thing I learned the hard way is to check every single water valve to make sure it works properly. 

For older homes it's also worth paying the money to scope the sewer line. They can settle and break over time and thats a very expensive job.

Will you be testing for asbestos, lead, or mold? Probably worth it if you have any suspicions.

Good luck!

@Mitch B., Hmm...I don't think you're missing anything, but the terms sound more like what you'd get for a commercial loan. Are you looking at properties with 5+ units?

I think you just need to keep looking. Have you tried local credit unions?

@Kelli Berg, you may have a good deal, if you're willing to take on the due diligence now and stabilization later. I would calculate a new offer based on what the place is ACTUALLY worth--i.e. NOI x Cap Rate. Then start subtracting based on how much additional capital you'll have to invest and how much time/effort that will take.

Back of the envelope says ~$45k NOI your initial offer is just shy of 10% Cap Rate, which is above average. If you could get it for $350k and put another $100k into CapEx, you might have a real winner on your hands. Forced appreciation close to $100k. And if you can submeter the utilities...that's an easy $180k in forced appreciation on top of it.

Good luck, let us know how it goes!

@Nich J. your mortgage may require replacement cost be covered. I think that's pretty standard. I don't see the point in nickel-and-diming on insurance, the cost difference is minimal.

@Ryan Truong, I say house hack with an FHA. If you can force appreciation over 12 months, you may just be able to get out from under the PMI and move on to another opportunity in a relatively short amount of time.