All Forum Posts by: Jon Reed

Sounds like you have $30K of available credit in your primary residence and $1k cash... You could do a lot with $31K. Figure out what your own personal goals are then start researching out ways of achieving them.

If you are financially able to buy now.. then I would say go for it. Purchasing real estate is a long term investment so even if you buy at the worst possible time you will still end up making money if you keep a hold of the property. 

Hello!

I would personally leverage as much as the repairs as possible to either reduce the price again or have the seller fix them. Here is what I would ask the seller to do/adjust the selling price for.

• Repair firewall between two units (this is usually set by local code that you must have a fire wall between the two units in case one catches on fire, the fire will not move through the attic space and catch both units on fire as quickly)
• Get a roofer to come out and do a full inspection and provide a quote for repairs... sagging roof and leaking roof penetrations can become a big issue.
• Have a electrician come out and provide a quote to secure wiring in electric box and a new breaker cover. You do not want to have open areas in a breaker panel where a tenant can accidentally get shocked while resetting breakers.
• Outside HVAC units look old but i doubt you will be able to get the price adjusted if they are still functioning well.
• All the concrete cracking/settling is normal... no worries 
• Railing missing is an issue. I would get a quote from a contractor for adding railing. It is a liability issue to not have railing on those steps.
• Brick issues... not 100% but this may be caused by water dripping on these areas... I would look up to see if the gutters are clogged and pouring water over those areas.
• Water staining on ceiling... the roofing inspector will make sure there are no current water leaks. 
• While the electrician is there have them add to the quote the adding of CO detectors. Most building codes require you to add in hardwired smoke/co detectors which is more expensive then just putting in battery powered ones.
• Dont worry about the baluster spacing... it is grandfathered in.
• Have the contractor who is bidding on the front railing add to his bid securing the indoor railing.
• Have the electrician add to his quote the adding of GFI plugs where needed
• Get a fireplace inspector to come out for both fire places.

Overall... make sure you either get the seller to reduce the house for the repairs that are agreed upon or that they use a contractor/electrician/roofer/fireplace inspector that you agree with. Sometimes they will try to DIY it and end up making it worse.

IMO there is just one question to answer to decided if you should get your Real Estate license or not.

Do you want to become a full time Realtor?

If yes: Get your license
If no: Don't get your license

A good realtor is way more important and valuable than trying to be your own realtor while being a real estate investor and (most likely) working a full time job as you build your portfolio. 

Remember @Jesse Hodges, termite inspection is just one of many issues you will have if you have a house that has utilities running in a crawl space that has no access point. Also, when you go to sell it one day you will have this exact same issue again but this time you will be the seller who is unable to find a buyer for the property. Focus in on houses that are discounted for a reason that you can fix like roofs, vandalism, poor upkeep, or just ugly... you will be able to improve those features and increase the value of the home... you will not see an ROI on jacking up the entire house 24" so that you have a crawl space.

@Rey Perez are you looking for a 4 unit that needs a full renovation or one that is turn key? If it is turn key then a seller shouldn't have anything to fear with a buy who has an FHA loan. Also, how many offers have you made and gotten denied due to only your financing?

This is always a fun thing to hear people brag about... "Ohh, I can renovated a whole bathroom for $3K"... then you ask them what do they mean by 'renovate' and you will soon find out either:

A. They are talking about painting it, putting in a new sheet of vinyl floor, and a new light fixture.

B. They are doing the cheapest materials they can find and doing all/most of the work themselves.

If you are to completely hire out the job and use mid to top tier products then a 2nd bath will cost at least $10K and a master bath can easily break $25K.

You can make a solid argument on any of the options you outlined. Each have their pros and cons... it is up to you to decided what works best for your own long term plan. If you don't have a long term plan then I would say stop worrying about how to expand and start thinking of where you want to be in 5, 10, and 20 years. Your future goals will drive your decisions today.

Well.. 1st... zestimates are worthless. Talk to a local realtor and find out the real value of the home.

2nd.... find out how much it is going to cost to renovate the home. Compare that to the real property value and see if it is still a good deal.

3rd... if the above is all good then offer the buyer $37,086 plus moving expenses. 

4th... if they reject your offer then buy it at auction and set your max bid to whatever your numbers tell you it is worth.

Depends... how much cash flow could you get by selling both properties and buying a multifamily and living in one of the units? Really, it depends on how much risk you are willing to take. You could go super risky and sell them both, take the equity that you get from them and leverage it as high as possible to buy the best cash flowing deal possible. Or... you could keep them both and just let renter's pay down your mortgage for you (in that case I would move them over to an LLC to keep the notes on those two homes from being counting against your personal DTI).