All Forum Posts by: Jeremy Peters

I have a 3 bedroom and 2 bathroom house that I’m planning on remodeling the smaller bathroom. What’s everyone’s opinion about installing a new tub versus a larger shower only? This will be my first rental property in the future so I’m not sure how important it is to keep a tub in the non-master bathroom which is what a family with kids would primarily use. Thanks for your advice!

I'm hoping to acquire my first rental property in 2015.  

I did some research about upcoming foreclosures in my area near Dallas, Texas.

I found a property that is scheduled for auction at the beginning of February.  I did some research and should be quite a bit of equity assuming the house is in decent condition.  I did some research and found a mechanic's lien on the house.

I just typed up a letter and dropped it in their mailbox asking them to call me so I can buy their house before it is foreclosed and auctioned.  I was sure to keep the theme of the letter that I want to help them and can put cash in their pocket fast.

I was hoping to hear any ideas or tips about how to navigate this process.  In Texas, can a mechanic's lien foreclose on a property similar to a second mortgage?

Her cash flow projection didn't include vacancies, property management, repairs or her payment to the seller.

@Tufan Andrew Arikan 

Welcome to BP! 

I was at the NTAREI meeting last night also and won a printer/copier.  I just did a quick analysis of Robyn's owner finance example on this post.  

http://www.biggerpockets.com/forums/79/topics/1132...

I signed up for her 2 day course already, but I'm significantly less excited about it now after researching her on BP and crunching the numbers on her example.

Best,

Jeremy

I attended my second meeting at the DFW REI group in Richardson last night. Robyn Thompson was the featured presenter. As a newbie, I think she was informative and good at public speaking. She mentioned she is on the road 180 days a year presenting. She promoted a 2 day workshop with her mentor Thad in two weeks for $89. I'm guessing a portion of the 2 day workshop will be used to promote her 5 day boot camp (~$2K) which offers the opportunity to apply to be personally mentored by her for people who completed her boot camp.

She spent some time walking through two examples of recent deals to highlight the benefits of seller financing.

Florida property example 1:

Purchase Price $220K

Down payment $40K

Balance $180K

Rent $1,700/month

Taxes $3,335/annual

Insurance $1,000/annual

T&I $361/month  (I don't know what T&I stands for but I'm assuming this is capital and maintenance reserves)

Cash flow $1,339

Repairs $0

Owner finance option 1: $1,000 per month for 180 months (0% interest)

Owner finance option 2: $1,200 per month for 150 months (0% interest)

Her slide claims if she keeps the property 5 years the profit will be $60K or $72K plus appreciation.

I just reviewed her numbers this morning (I took a picture of the slide with my phone).  Her "cash flow" number doesn't include her assumptions listed (property taxes and insurance) and doesn't include an assumption for vacancy or property management (even though she uses her 6'3" boyfriend as her property manager).

When I plug her assumptions into the financial model I created, I calculate her cap rate at 3.6% which doesn't seem great in my opinion.  Granted, the picture of the property was very nice.  However, it appears as if this property would be cash flow negative $267/year just using her assumptions which excludes vacancy and property management.  When I add in 10% for property management and 10% for vacancy the annual cash flow is now negative $4,347/year and $21,735 after 5 years.  

It appears she was only looking at the debt reduction in her returns assumption.  This seems pretty careless for a multimillionaire real estate investor.  I'm significantly less excited about signing up for her class next weekend now.  

I hope this post is beneficial to someone else.

The email I received has the starting time at 6:30p which is probably for the networking before the presentation.  I look forward to meeting some BPers tonight.

@Kevin Auyong 

DFW property taxes vary by city and usually range between 2.5-2.8% depending on the city.  Dallas is 2.74% and Ft Worth is 2.84%.

@Christopher McGuire 

That's a solid budget.  What you can get really depends on which specific neighborhood you decide on.  Highland Park is probably the most expensive area.

Make sure you factor in our high property taxes in your budget. Dallas' property taxes are 2.74% of property values.

@Jason Bott 

@Hattie Dizmond 

Thanks the for the info.  I will combine the central heating and cooling.  I think my AC/heating guy mentioned they were separate units, but I didn't get into a detailed conversation about the cost of replacing each section individually.  

@Jason Bott

@Jason Bott 

Thanks for the info.

Just to check my understanding, if I had to replace a roof due to hail then I would pay my deductible which I think is 1% of the property value and my insurance premiums would double or triple?  So on a $200K house with current insurance of $1,200, I would pay $2K upfront and then an extra $1,200-$2,400 insurance cost for 2-3 years?

If a roof lasts 10 years between hail storms, then the total cost for the new roof is up to $9,200 out of pocket ($2K deductible plus $7.2K for increased premiums [2,400 x 3 years]). That averages out to saving $920 every year to fix the roof.  Ouch!