All Forum Posts by: Kobus De Villiers

You should connect with @Brie Schmidt 

Haven't been to the meetup yet but it seems more active an promising than the other groups I know about in this area.

There are a few other regular meetings in the suburbs but that's a bit difficult for me to attend. http://www.careia.org/

I'm with @Jean Bolger on this. Take the 50% cost basis as a starting point. Rental income to purchase price seems like a good ratio to start looking into more concrete numbers. If possible get the actual current costs for the property. Be sure to always take the more conservative estimates for income so you don't end up on the wrong side of the equation. 

The deal analysis spreadsheet is a good starting point to work out costs and initial capital needed.

FHA is not a bad way to go but I'm almost convinced that having the 20 to 30% cash for downpayment is worth the wait before jumping into your first deal. Even if it comes down to a FHA loan then at least you have cash in hand for some of the unforeseen expenses.

One of the biggest mistakes I've seen is from investors that can't respond to the initial costs because of the lack in liquid funds. Set yourself up so that cash isn't the driving factor and then more options will be available that could turn an okay deal into a great deal.

@Brie Schmidt Would love to join your networking event when I have a chance. Might not be easy for me to get to Norwood Park but I'm sure I can arrange something. I read some of the posts on your website and found them very interesting and entertaining. 

Since you can invest your cash anywhere I think a good investment should probably have a 10% cash on cash rate to be considered favorable. Real estate investment has different risks but I do try to identify deals where the rate falls between 8 to 12 percent. Obviously the higher the better but anything below that is probably a deal that I can ignore.

@Wendell De Guzman 

I'll look at the podcast. I'm definitely not in the market for a 36-unit building. For now I'll concentrate on rehabbed 3 to 6 flats in stable communities but I don't see too many on the market that's within my price range. 

Hi,

I tried about three years ago to get into real estate investing but personal and work life got me sidetracked for a bit. I'm finally in a position to get involved in real estate investing. My goal is to buy multi-family rental buildings in the greater Chicago metropolitan area for long term income. Hope to be more active from now on and start to create a network of friends here on BP.

Yes, they are hard to find. I have one that I'm willing to spend some time on but private sellers are still my primary target.

Got this from a network contact so hope I can do something with the deal as it is around 40% of ARV. In the end this will not be my bread and butter.

Thanks for the info. Maybe I should explain a bit better.

Thinking if I purchase for 90k then I should make sure that the deed restriction will allow me 20% profit so that I can sell (double close) within 18k to my buyer. This assumes rehab time is over the 90 day restriction. In this case buyer should not have a problem to rehab and flip.

Other option is to add buyer as addendum to contract and then doing quit claim deed.

Or, as Will said, just walk away and go after something easier if this becomes too complicated.

Just trying to set my own expectations.

I'm putting together an offer on my first REO property to wholesale. Fortunately there is no seasoning problems but they do have a paragraph to state that I can't sell for more than $x.xx in a certain period. I'm trying to negotiate this to 20% of purchase price to give me enough spread for a wholesale deal.

Anybody have any experience with this and have some general guidelines to consider. I'm thinking 10% may not be enough to cover transactional funding costs for double closing and giving me enough negotiating ability.

This is on the deed so it would potentially impact the rehab as well. Should I include my rehab estimate and negotiate with that in mind to cover my buyer?

Thanks.