All Forum Posts by: Jon Kelly

@Carson Brown Buy it and hire a property manager. Make sure you don't tell your girlfriend you bought it and she never finds out you're the owner. 

In all seriousness, don't buy it. Why not continue buying in the market you already have the SFH since it's going well?

Price

@Bethany Shipman I'm confused why these "add-ons" would not increase your ARV?

Don't you think adding a bedroom and central HVAC increases your ARV?

Electric baseboard is typically fine, but it also depends on your market.

@Matt M. if you start this let me know. I can think of several people in the area that would pay you to walk through properties and come up with rough estimates - even I might take you up on the offer :) 

Your years of hands on experience is something a lot of people would love to tap into. 

@Craig Castro you've written into words what a lot of people think or feel. 

I'd suggest you shift your mindset to focus on "why" you want to get into real estate. It shouldn't be out of spite for your employer, but instead it should be to improve/challenge yourself and support your family. It's easier to focus and take action when it's necessary - you and your family depend on it. 

Sounds like you've taken a couple great first steps. Continue to focus on one market, find properties, analyze, send them to an agent, visit the properties and make offers. 

@Justin Dragon you mentioned market rent is $1,450, but is that for a renovated unit or the same condition as yours? You mentioned yours needs work, so maybe $100 below market is appropriate. 

Another thing to consider is if/when you will sell or refinance. If you are not selling/refinancing any time soon then any money you put into renovating the unit will be trapped until you sell or refinance. There's no rush to spend $5k on renovations if you can only increase rent by $100. 

@Hardeep S. take the $90k and buy your first property. 

The difference between 3% and 3.5% is minimal. Don't touch the student loans with this money. 

You said your goal is to "quit my job eventually" and "launch my real estate investing career." Assuming you've thought long and hard about your goal(s) and you believe in it wholeheartedly then anything you do to delay the goal is less important.  

@David B. you have two different things to consider: 

1. Can you obtain financing? - You will certainly be able to find a lender willing to lend. You already have a loan on your current home with a similar price. 

2. How much financing can you obtain? - This is the more important question. The appraisal value is more important than the purchase price. In this crazy market we've seen plenty of properties that appraise for LESS than the purchase price. You need to look at comps based on the properties current condition. Do not factor in its "potential" or future value from adding 2 beds and a bath

Kind of a silly post. Who does this benefit? 

That's like saying most people will not become fitness models, so don't bother eating healthy and exercising regularly... 

At the end of the day everyone has their individual goals and it's up to them to achieve them (or not). 

BP is a fantastic resource for gaining knowledge, networking and seeing the art of the possible. 

@Andrea Campo Closing costs are very high. Does $8,500 include 1 year of taxes / insurance? 

I typically assume 15% combined for maintenance/repair and capex. It SHOULD be less than 20% especially if you're rehabbing. 

Otherwise, analysis seems reasonable. Now you adjust the purchase price until you hit a target that works for you.