All Forum Posts by: Jon Catterson

Originally posted by@Caroline Gerardo:

IF you find a hard money lender who will give you a construction loan of $140000 expect monthly payment to be $1440 plus tax, insurance  and costs $10000 to set up and may have a prepayment penalty. You plugged in a way too low rate for a conventional long term loan and costs. 3.75 30 year with $2500 on a cash out 4 plex investment loan you need 2-3 points or more to buy down to that rate so add $2400 + to your $2500. No way to predict what rates will be when you are complete. You will pay loan costs/title/escrow/tax/recording and and and twice.  A 1926 building needs everything. 

Thank you for replying, Caroline. The hard money loan would be for $103,500 as there is a hard money lender that will loan 90% of purchase and rehab with that totaling $115,000. This assumes a $60,000 rehab which is just a guess at this point. We'd pay closing costs and 10% of purchase and rehab. The interest rate would be high. I guess my main question is how to insert that into the BP calculator. 

Thanks again for responding. 

I did the linked BRRRR calculation, but I don't know how to account for the hard money loan I would use. Entering it for the loan part in acquisition doesn't seem to fit or at least I don't know how it fits. Any help would be appreciated.

View report

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

Hi Jeremy, 

The third Thursday is June 17. If the meetup is on June 24, we'll have to miss our first one as @Delia Washington and I will be in Hawaii. :) Hope it's a good time at Out of Bounds if it is on the 24th. We can make the 17th. 

@Kevin Summer This property? https://www.realtor.com/reales... I gotta say it doesn't look like a typical BRRRR property pre-rehab to me. What repairs did you project into it? I was going to do a BRRRR calculation on it but I couldn't see what to put for rehab.

Our search caps at $200,000.  

Our search is open to a lot of areas but most of the properties we're looking at are in North Linden, Franklinton, Southern Orchards, and Driving Park for single family and Hilltop for multi-family. I don't know if multi-families are just not common besides in Hilltop or if they're common elsewhere but out of our price range. 

I like to do basic "research" (not real bona fide research), so I went through all the markets that are listed on BiggerPockets as having sub-forums. I chose to look up: 

1. the median home value from Zillow
2. the Rentometer average rent
3. the resulting price to rent ratio
4. the property tax
5. population growth since 2010
6. change in income since 2000
7. change in home value since 2000
8. unemployment change since 2010 to 1st Quarter 2020 (which was not helpful due to rebound from the Great Recession)
9. crime percentile for the country (also not helpful since most metros generally have relatively high crime)

I started out going through all the markets, but quickly saw that I could not afford some. So I started to eliminate any market higher than $180,000 in median home price. Then I eliminated

1. any market with a price to rent ratio above 12
2. property tax above 2%
3. population growth lower than -3%
4. change in income lower than 20%
5. change in home value lower than 4

That cut out a bunch of markets and reduced my workload. The markets that made it through were:

1. Tuscaloosa
2. South Bend
3. Des Moines
4. Kansas City KS
5. Columbia

I thought Tuscaloosa was the best on the matrix. I can provide a link to the Google Sheet for anyone that wants it. Keep in mind I eliminated many markets and did not pull all the data for all of them.

In the end, after all that work, I decided to invest in Columbus with my girlfriend as she has a sister there and my best friend's three sisters know the city. LOL. But if we move on from Columbus I'll be running this again. 

I think the difference between the assessment and the market price could be due to Proposition 13. In CA, the tax assessment value of an owned home can only rise a maximum of 2% per year. The market price is set, of course, by the market. Someone who is more familiar with the law may be able to shed more light. 

View report

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

Any feedback is appreciated. 

The West Sacramento one? It happens every month on the first Monday except perhaps when there is a holiday and it's re-scheduled for later that month. I sometimes have a hard time finding it, so I would search Sergey Tkachev's profile on BP and you will find it there. Next month there will be a presentation on Airbnb.