All Forum Posts by: Landon S.

I was wondering if anyone had heard the rule of not spending over half of ones' savings on anything if you have no debt. I am graduating from college in May 2013 and already own one house jointly with my parents. I have been renting to three roommates for three years; their rent paying all payments and expenses. I want to see what BP members think about if I am in the financial situation to be able to invest half of my savings into another rental property at this time.
I can give more information if needed.
Thanks for reading and I appreciate honest opinions.

You found the right place Jeb. Glad to see another Kentuckian join the network.
Good luck!

Chris Calabrese Thanks for the input. I will for sure be going to all properties I make offers on for awhile. That 20-25K number helps; that's what I was looking for.
All houses except 1 are owner-occupied on this street in a very established neighborhood. The inside story is a previous flipper had flipped and sold 2 houses here (changing 70's fixtures) before and owned two more, but was over-leveraged and had to foreclose. I know a broker who works for Coldwell Banker and he thought I may be interested for a flip that hopefully isn't too overwhelming.
Sounds like my contractor will be getting a call in the morning!

I need some advice to keep me grounded. I truly think this property has potential. I have had comps run (similar houses selling for 105-115K) and have a relator ready to write up a contract if the house turns out to have no major structural issues. I have budgeted 20K in repairs and have a 6 month hold built into my financing costs.

I can share more info if anyone wants it, but am looking for experienced flippers' advice on how to vet a property through online outlets/common information given on sites such as Zillow/Trulia/MLS without driving to take my contractor to the property if its going to be a waste of time.

Hoping to get feedback so I can take the next step.

-Thanks-

http://www.zillow.com/homedetails/646-Laura-Dr-Winchester-KY-40391/115270603_zpid/

I am still fairly new to the real estate world, and have only done estimates for two projects previously. Before scheduling a showing I wanted to see how close my preliminary estimate should be to work it. Adding 20% to contingency and not adding in any major unexpected repairs that wouldn't be know as of now I used 20K in my ratios for the reno budget.

[http://www.zillow.com/homedetails/646-Laura-Dr-Winchester-KY-40391/115270603_zpid/]
Neighboring homes are selling in the 100-120K range.

I would like to learn any tricks or simple numbers people use to start the preliminary numbers to see if a property is even worth the next step of research.

I know I may not even be able to even get a good enough estimate from Zillow/realtor website without going to the property with my contractor, but I know some people make offers without even seeing the inside of the property. (I will go anyways for the first several times.)

Thanks for any help/advice

Absolutely!

I took out a loan (@5%) with a local bank that my family had a good working relationship with. I had little credit but in just 2 years my score has gone up to a 726! My grandmother loaned me part of the down payment; I covered the rest. Now my brother (civil engineer) wants in on the action so we plan to form an LLC and invest with our own money. I will find out in the next two weeks if I get into Grad school so things are on hold for now. Some big grown-up decisions to make in the near future!

Ryan Devin
I hear you there. Nice houses off UK's campus fetch top dollar, but the rent makes up for it. So if the numbers are right, its worth looking into. The house I own currently rents for $2,000/month and my expenses+mortgage are around $1,500.
I'm looking for a smaller property next that needs a bit of work so I can build equity, rent it, plus have it on the market.

Hey Ryan,
I'm in a similar boat like you. I would suggest to spend plenty of time getting your ducks in a row and then be prepared to pull the trigger when the numbers work for you.
This site has already helped me, but there is a lot more to be learned in the real world. I think the best way to look at investing is to hedge your risk as much as possible and prepare so you aren't eating Ramen in order to pay a loan payment.
How's the rental market off your campus?

Good Luck!

Jon,
I currently own a property off campus and rent to roommates. And am actively looking to buy two more this year. I can tell you that if you aren't a slumlord and take care of your tenants you will be surprised how well some college students maintain houses/apartments.
You also need to market to the right college students. Freshman and low GPA doesn't help an applicant. You can ask for unofficial transcripts when screening applicants. Good grades never hurt!
Also, I find talking to other local landlords that they have untraditional leases in some cases.
-2 yr leases (graduate students)
-cash scholarship for paying rent on time for full year.
-furnished can demand premium rent for international and out of state students.

My 4 bed/ 3 bath rents for $2,000 a month. We paid $230,000 for it turn-key.