All Forum Posts by: Logan Hassinger

@James L.

I was working on the initial stages of a deal a few months ago and came across Bay View lending. They specialize in investment property lending and have received some high praise from others at a local REI group. I spoke with an individual there who said they can lend with a 15% DP but at a higher rate obviously. I would recommend going the path you're on and continue to establish and build your relationship with the local bank.

@Ryan Dossey

The sellers numbers are typically lower on expenses and higher on income, therefor propping up the NOI. I honestly don't care what the cap rate is because it's not how I determine a value. To get a better estimate or just to verify what the seller is giving you, call some other property owners and property management companies and tell them you're interested in purchasing a building but would like for them to share what they see. Ask what the typical vacancy rate is, but know it will be much higher if you plan on doing any type of tenant turnover or rehab. Do a comparison of multiple properties and their expenses to determine, percentage wise, if they are reasonable with what you have been given. Is there any deferred maintaine? How are the roofs?

wise choice. Just continue to learn and ask questions. 

@Tom Webber Thanks for the advice on the NET number as well as a general % of Asking price to offer.

@Mike Hanna

I appreciate the great insight on duplexes in general. I live in Bedford, and am familiar with the duplexes in the area. This duplex is in a community of about 50 or so, and there have been 5 sold recently, which is what I'm basing my ARV on. But I see what you mean about the investors are usually the ones buying duplexes.

@Trevor Fritz

I assume you are referring to the cash put up by your investor to leverage into another home. The investors cash would not be able to be used on a conventional mortgage as a down payment, but would be able to be used in order to purchase a property not involving a bank. 

If you need further clarification, don't hesitate to ask. 

I have recently walked a duplex owned by HUD. The HUD inspection has been reviewed with no major issues found. What was found is that one of the unit's furnace isn't functioning, and that the kitchen sink has an obvious leak. The A/C unit looks to be serviceable but could be possibly replaced. I have factored in the cost of replacing the furnace in my rehab budget. Both units will need flooring throughout, which will be carpet in living room and both bedrooms. The kitchen and bathroom will receive vinyl flooring. Both units need minor drywall repair and new paint through out. All lighting fixtures will need to be replaced as well. Both bathrooms will need to be remodeled to the extent of replacing shower/bath area, faucets, sink and resurfacing cabinets. The kitchen will need new laminate counter tops, cabinets resurfaced, and appliances (stove/oven, and dishwasher).

The property is listed for 70k and I would like to offer somewhere in the neighborhood of 50k. The ARV in this community of duplexes is 105K. When submitting my offer, should it contain the list of repairs and estimated costs, which currently sits at a very rough, high estimate of 20k? Can anyone provide additional detail as to my rehab estimate?.

I'm looking to finance the deal with hard money and pay for rehab out of pocket, then refi at 8/12 months later.  This is a long term hold. Does anyone see any issues with this strategy?

@Phillip Gonzales

I prefer the longest term loan possible. Reducing your monthly debt service by any amount flows directly to cash flow. If you apply that additional cash flow from the debt service savings to the principle amount every month you would be surprised at the time it takes to pay it off.  Why tie your self down to the higher payment if you don't have to. 

Check it out dinkytown.com. They have tons of calculators, not just mortgage related. 

Here's a few:

http://www.dinkytown.net/java/MortgageCompare.html

http://www.dinkytown.net/java/MortgagePayoff.html

@Fernando Valenzuela

Redfin does a decent job of sold properties, but your best bet is to contact a few local agents. Get to know them and go from there. 

I'm sure you could easily find a few on BP in your area. 

@James L.

Good to hear

@Tony Hernandez

Using the BP calculator is definitely a good way to get started, but those rents don't support a purchase price of 95k. At 95k purchase price you need rents around 1200/month/unit. I'm from DFW and see deals like that all the time. You would need a unit price of 65-70k with the current rents. The expenses you see on paper aren't what will be leaving you bank account.