All Forum Posts by: Jeshua Patrick

I would definitely get an expert to inspect and test. I do wonder how others would know the property has asbestos but the owner does not. It’s possible but seems to me that either the owner could be trying to hide something or someone else is trying to mess with your deal by scaring you off. Either way, do your due diligence and you should be fine.

Josh Stack I walked through the unit and let’s just say they had a heck of a photographer. I know some of my math was a little hard to follow but that was more due to the app jamming all my stuff together when I create a new thread. Long story short, my realtor got back to me with comps and finally got the insurance quote back. At asking price the numbers would have been tight assuming no repairs and max rent on a LTR for both sides. Turns out the property’s ARV is a maximum of $225k and likely closer to $200k. Worse yet, the property needed somewhere in the neighborhood of $40-$60k in repairs. To buy it right I would have to get it for $100-$120k before repairs and, with the crowd that showed up, that’s not likely to happen so I decided to pass.

Eric a lot of that depends on the lender. I have one lender that will give me credit up front for 75% of the expected rent towards my DTI. I can increase the number of units by buying 2-4’s conventionally and those will likely offer better opportunities at cash flow currently. On market and REO SFH’s are what is really insane here at the moment.

I guess I should have been a little more clear. The SFH’s I was referring to that were 1.0-1.2% deals at 70% ARV all-in are often break even cash flow deals at best due to the extreme rise in values over the last few years.

Tyler Hull I would advise caution here. Don’t let yourself get so caught up in the desire to help someone that you take a deal that doesn’t work for you. It’s easy to get distracted and want to chase everything that seems like a deal. It very well might be and might be worth pursuing. It might also get you into trouble. Start by trying to nail down an ARV and a repair cost. Then, if it still looks like a good enough deal, focus on exit strategies.

Josh Stack I’m trying to vet out some of the options as fast as possible. The prices are per side. I’m trying to get some more concrete numbers on things like rental rates and insurance. As you probably noticed I’m having to estimate some fairly large swings in some places until I get better feedback. Some things such as STR expenses are going to be a little harder to nail down as quickly so I tried to play it a little safer. I have considered the possibility that Charlotte could change their position on STR’s which is why I want to make sure a deal cash flows as an LTR. I would love to get feedback from people in the Charlotte area with STR experience but there doesn’t seem to be anyone actively involved on this site doing STR’s in Charlotte yet.

Need help on a deal analysis. Looking at a duplex in Charlotte. House appears to have been fully renovated. Open house tomorrow. Some numbers such as insurance and repairs are unknown. I will update after I see the property and get final quotes. Total S.F.: 3020 Units: 3 BR/2BA List price: $250k ARV: $250k Estimated repairs: $5k Estimated rent: $1250-$1450 10% Property Mgmt 10% Repairs 10% Capital Ex 10% Vacancy NOI: $2500-$2900 Debt service: $1013 Taxes: $155/mo Insurance: ~$125-$170? Net monthly cash flow: $162-$402 Upfront expenses: Down payment (20%): $50k Closing costs: $5k Repairs: $5k Total: $60k CoC: 3.2% - 8.04% Here’s the twist (and why I’m considering). I want to STR one unit to start. AirDNA says I should be able to average $198/nt at 49% occupancy for a gross of 35k/yr. Also, a similar 3 BR/2BA unit nearby is about 50% booked from Jan 5 - March 31st 2018 and fully booked from April 1st 2018 - January 1st 2019 at 150/nt. 75% occupancy at $150/nt puts gross rent at $41k/yr. Adjusted numbers based on 1 unit LTR at $1400/Mo and 1 unit STR at $2900/Mo as follows: LTR (60% net): Income: $1400 Expenses: $560 Net: $840 STR (50% net): Income: $2900 Expenses: $1450 Net: $1450 Combined net: $2290 Debt Service (PITI): $1338 Additional upfront for furnishing 2nd unit: $10k CoC: $952 for a total CoC ROI of 16.32% NOI: $2290 or 39.25% I fully expect the LTR rent rate to be closer to if not higher than $1400/Mo and repairs/cap ex to be closer to 5% making the deal much better. Also, both units are large enough that I could potentially move into one unit later, sell my current house, and simply rent the second unit saving me about $830/Mo in personal expenses. Thoughts? Anything I missed?

Natalie Allen try searching on meetup.com. That’s where a lot of local REIA groups post where I’m at.

Natalie Allen I think the mentor thing gets blown out of proportion and is often used as a lazy person’s way out. Clearly you are not a lazy person as you are out there trying to make things happen. What many often overlook is that much of the information needed is already at your fingertips. There are lots of books, REIA groups, and even this forum with the information you need to move to the next level. All you need to do is keep working and keep reading and asking questions as you go. If you do that, eventually your mentors will find you.

William Lu DTI, credit history, liquidity (cash, 401k, IRA), employment history (2 yrs continuous or combined), tax records (2 yrs). Employment history can get a little tricky. For example, it’s usually ok to change jobs so long as you are moving up and not down and not changing jobs too often. The caveat to this is that you cannot switch back and forth between contract and W-2 employment as this resets the clock in the eyes of the bank each time you do. Credit history is also a little tricky. The basics apply, pay on time and keep your LOC utilization below a certain percent; however, length of history and a few other things come into play. One thing I’ve discovered is that having a LOC, preferably fee-free, that you can keep forever is extremely beneficial to bolstering your score and credibility in the eyes of the bank once you’ve held it for several years. You can use google to help find a lot of helpful advice regarding this. Tax records are used to make sure you aren’t wiping away all your income with qualifying deductions. Banks can, and will, deny you loans despite having high gross income amounts if your taxable income ends up being low or close to zero. DTI is just a measurement of your capability to repay. I believe the standard for most banks right now is around 43-45% of gross income but lower line item limits may apply. The only things that are looked at here are active debts that show up on your credit history. NOTE: This is not, nor is it intended to be, financial advice. Make sure you consult with a local qualified professional.