All Forum Posts by: Jon Catterson

@Andy Sabisch

Thanks for your response, Andy. Briefly, 

1) I entered the year built of 1968 into BP's report. I don't know why it keeps getting deleted from the tool. 

2) The roof needs to be replaced. Bowing and expanding in different areas. Per the listing agent, the conditioner/compressor needs to be replaced. I'm not sure about plumbing and electrical, but I'm assuming some work. 

3) Great question. I do not know. 

4) I don't want to over-landscape. Scott says to make it presentable when a buyer drives up. Beyond that is probably a waste of money. Good to know about windows, insulation, and carpentry. The flooring of $8,200 was for laminate wood throughout. Too low? 

5) Yeah, I talked about it with my agent. I'm not sure either. He thinks the counters are too far gone. 

6) I'm using an agent. I just asked Grok for closing costs, adjusted for the purchase price, and eliminated anything related to loans.

7) Good to know. 

8) I have talked to one via my agent. He utilizes a few more. I would get bids from several when under contract. 

9) Thanks. Sacramento County is bad when it comes to permits per my construction friend. 

I appreciate the questions for me to ask and the feedback. 

Hello all,

I live in Sacramento, CA. My wife (then girlfriend) and I purchased a long-distance SFH in Columbus, OH, in 2021 and sold it in 2024. It went well. Sidenote: @Zeke Liston is a great realtor there, and Donny Thompson was a great property manager. Both provided numerous off-market leads. Donny had contractors he worked with for his landlord clients. 

Now, I want to fix-and-flip locally before perhaps doing long-distance BRRRRs, which I believe do not work well here in Sacramento. I have read The Book on Flipping Houses by J Scott and summarized it for myself, have listened to The House Flipping Framework by James Dainard, and am now reading it and summarizing it for myself. I have utilized J Scott's The Book on Estimating Rehab Costs to estimate renovations. Since the latest edition was published in 2019, I am using the upper end of the ranges due to inflation. I also have a good friend who knows everything there is to know about construction, who corrected some of my rehab estimation mistakes, though he is not a flipper and has some blind spots for what is needed for flips. 

I have a realtor and am searching the MLS. I've made three offers. They were all lower than the list, and the properties went to someone else for list. I think my rehab estimates are high, but I hesitate to go lower since I'm a beginner to this. I will use a general contractor for sure on this first flip, which of course adds to expenses.

My money comes from a self-directed IRA. I am using all cash, no financing. My plan is to flip one or two properties within the self-directed IRA, gain experience, and then utilize hard money or, ideally, private or soft money, outside the IRA. I don't want to do too many flips in the SDIRA to avoid UDFI tax.

Below is an analysis I did on a real property I visited. The rehab estimate is itemized to a certain extent. The one I did was more in the weeds, but what's in the reports gives a good idea of what I thought. 

I would REALLY APPRECIATE any feedback IN GENERAL and on the REPORT. Thank you!

View report

*This link comes directly from our calculators, based on information input by the member who posted.

@Calvin Schmeling Based on your reply, my advice for you is to jump into action. If you've read multiple books on overviews of real estate, LLCs, property management and other topics, it's time to get a buyer's agent or connect with wholesalers (I recommend getting a licensed buyer's agent for your first property), look at a bunch of properties, analyze the ones that look promising, and offer on the ones that look good after your analysis. 

The right team is important but the team members you mentioned (CPA, attorney, bookkeeper) are secondary. I would find a good buyer's agent from using BP's agent finder tool and cross-referencing the people you find with Zillow's Agent Search database. Your agent(s) should have recommendations for hard money lenders, property managers, and general contractors. Those are the team members you need to concern yourself with right now by the way. As someone else said, the work of a CPA and bookkeeper is doable on your own for your first property. I don't think an LLC is terribly necessary early on and therefore an attorney is not necessary either. Your mileage may vary on that (as well as the mileage of others).

Bottom line, it's time to briefly refer to your books and take the actions those books tell you to take. 

@Avinash Dongarwar, I second reading that book by J. Scott. Even if you don't know construction, you should be able to get a ballpark figure. Then you can give that to your contractor who will walk the property and see where you got it wrong. It will be good practice in any event and you should be able to ask good questions on why the contractor thinks this or that is such and such price. 

I have a good friend who knows everything there is to know about construction. Retired former contractor. He reviewed our own estimates on three properties using that book. We were low by about 10% on the first and second then just about right on the third. 

I use Donny Thompson of ERA Real Solutions Realty in Columbus. He has a big business, managing 1,500+ doors. He has a lot of people working for him. In house maintenance guy and in house contractor. He's done pretty well by us. If you can't find his number on the internet, message me. 

Hi @Zander Deckinga,

It's awesome that you're intentionally pursuing FI at 19 years old. Keep at it!

You said you are in a comfortable spot with regard to your income. That's great. However, I understand that Austin is a very expensive market as far as raw price points. You probably like Austin and want to househack there. I'd just float the idea of doing that for the first one, but for some future properties maybe go 1 hour and 15 minutes down the road to San Antonio for some more affordable properties. Just something to consider. 

Best of luck!

Hi @Daniel Sanchez,

I am not sure what you mean by data even though you provided an example. I used very simple data to help me determine my out of state market. 

I went through all markets listed in the BP forums networking sections and narrowed it down to those that had $180K or less median home price on Zillow. Then I looked up Rentometer average rent for a 3 bed 1 bath for each general market. From that I calculated the price to rent ratio. I eliminated markets above 12 P/R. For the remainder I googled their property tax. I eliminated those above 2%. I googled the change in income from 2000 to 2017. I eliminated any that were below 20%. I googled change in home value from 2000 to 2020. I eliminated those lower than 40%. That left me with my markets to choose from. 

City-Data.com is a good place to find some of this info and other info. 

Hope that helps. 

Hi @John Mucilli

My first and so far only buy and hold is in Columbus OH. I live in the Sacramento area and lived there when I purchased it last April. 

I read Long Term Real Estate Investing by David Greene. That is the LDREI bible imo. But you asked how we got over analysis paralysis. I'm afraid I can't help much except to say know your destination: a long distance rental. Then go ahead and imagine the steps but realize it's a destination you're going to but the journey may take you on very variable routes. Then, most importantly, focus on the very next step you need to take. Once you've been paralyzed for a while, that last step is exceedingly important. 

If you've already read LDREI, that may mean go to BP Agent Search and find three agents to write an email to. Then the next step is to draft your email you will just mail to all three agents changing the agent's name. Then respond to each agent as they respond. Etc. etc. etc. Focus on the very next step. One step is not that hard. 100 steps is. 1000 is impossible. 

Hope that helps. 

Hi @Taylor Steenburgen

In response to your first post, you may want to consider short term rentals or a traveling nurses rental. The income potential is higher of course. I do not know the laws on short term rentals in CA or Sacramento as that is not my strategy, but I do know that is is hard to find a Sacramento purchase that will cash flow as a traditional rental. 

Capital expenditures should depend more on the property I would imagine. Sacramento has somewhat favorable weather (no winter), so it may be better than the national percentage. For vacancy, I would consult your property manager. 

In response to your second post, I would go to Google and search for "Sell my Sacramento home now." The search results will be websites saying they buy houses. Most of these people are wholesalers. So you can start with a Google search. I would also attend REI meetups and ask for referrals.

I invest in Columbus, and my agent @Zeke Liston is with Reafco. They seem to be on the Columbus real estate investor market like white on rice. You may want to check them out.