All Forum Posts by: Kenneth Garrett

@Ian Dale Ibrado

Shared laundry is ok if you have a common area that each tenant has access to.  Ideally in a two unit building having each tenant with their own laundry is ideal and you might be able to charge a higher rent because of the convenience.  Of course, this is based on your market.

@Ian Dale Ibrado

When I have a multiple occupancy building, I hire a landscape contractor for those services.  If you are determined to have one of the tenants take care of that you should select one and put it in the lease and they would get a credit or reduced rent for taking care of this.  I don’t think it’s a good idea to try to have each take care of it as a shared responsibility, just to many issues and disputes.

@Henry Adewale

It means money out of your pocket. Down payment, closing costs, rehab etc. If you recoup all of your money when you refinance then you have no out of pocket money in the deal. You essentially have a property that didn’t cost you any money, just your time.

@Kera Takacs

Maybe it’s just me, but I prefer to set up my own units even when they’re long distance.  I think furnishing your unit if need be and any other improvements you should do yourself or at least oversee it.  Test the unit by staying there a few days so you know what your guests will experience and you’ll find out quickly what your missing.  Learn the area, so when guests have questions you can speak first hand about the area.  It’s only 2-3 weeks of your time, but I think the benefits out way any negatives.  Of course, this is all based on self managing your units.

@Caleb Scott

So here is how this works.

1. The purchase is $40K plus $20K for rehab. Total $60K.

2. You need $40K to buy the property plus any closing costs.

3. The rehab is 20K.

4. If the private lender is funding 100% of purchase and rehab there is no down payment. If the private lender will only fund 80% then you have $48,000 from the private lender. You will need to fund the balance.

5. Each lender is different. Some find 100% while others might only fund 65%-80%. This needs to be agreed between the two of you. Remember there are closing costs on each closing (buy and refinance).

6. The repayment of the loan is based on borrowed amount, interest rate and length of loan.

7. At 10% for 6 months at $60,000 would be $3,000. This can be paid back monthly or at the refinance.

8. These concerns must be discussed with the lender and agreed upon.

9. At 100K appraisal if all goes well, yes you may be able to recoup all of the lenders funds or combination of you and the lender. Keep in mind, many times there is a little money stuck in the deal. That’s ok if the numbers make sense. I for the most part was always able to recoup all of my money in 6,12 or 18 months.

10. A first time investor seeking 100% funds for purchase and rehab is not likely. After the first couple of deals that go well that could be the result in the future.

Best of Luck.

@Mei Li

That is a very difficult question to answer.

You can look at the quality of the materials.  For example pine trim versus oak trim, solid core doors versus hollow core.  That only addresses the materials not the craftsmanship.  Remember saying that the construction meets all building codes is only saying it meets the minimum standard of the code.  The building is only a minimum standard.

1. Was the work performed by licensed contractors.

2.  Was a permit pulled and did all inspections pass.  If not, what deficiencies were identified.  You can FOIA that information at the city/county.

3.  References are probably your best bet on quality.  Call the references you be surprised what people will say even though they were happy with the work.  Example; project took an extra 30-60 days to complete.  The reference had to call the contractor numerous times, which means pretty poor communication.

Good Luck.

@Frankie Betancourt

If the bank truly owns it, then they have already foreclosed on the property. Instead of going to auction or they could not get there minimum price they sell It on the mls. Owners still living in the property will be your responsibility to get them out.

In general, REO's are in rough shape and are difficult to finance. Many are without kitchens and other improvements. I have bought many directly from banks before they start to market them so you can get good deals, but you'll probably need cash. It could be a private lender or hard money. In some cases, the bank will finance it for you.

You really need to know what your getting into because of cost of repairs. Like everything do your due diligence. These are great for BRRRR and flip projects.

@Todd Kime

There are a few things to consider;

1. Have you calculated the ARV, you understand the appraisal value you need, but what is your ARV number.

2. $10,000 is really small. Are you sure on the rehab? 3. What is the rent going to be and will it cash after you calculated all expenses; PITI, vacancy, maintenance, etc?

4. The above info is needed to make a good decision.

@Katie Miller

I found Zillow works best for single family rentals. Apartments.com works best for multifamily.

@Cory Anderson

They are a great product for using the BRRRR system where you have forced the equity through the rehab. You will need at least 25% down or in the case of a BRRRR, equity after all work is done and a tenant with a lease is in the property. My first BRRRR was a purchase of $85,000 + $17,000 rehab. Appraised for $125,000 almost got every penny back during the refinance. It has to have a positive cash flow typically at 1.25, but that varies per lender. It can work with a straight out rental purchase as well.