All Forum Posts by: Mehran K.

Smoking deal! Maybe you can share some information on how the negotiation went down with the lien holder?

I would definitely keep it as a rental! 

• You own other property in the area
• Tax free ability to pull out your initial capital + some extra
• It is line with your long term goals.

At the new ARV, does the number's match with your other rentals? Does the property cash flow well even after the cash out at the ARV? Obviously the deal is smoking and has a potential for a "theoretic" infinite return when you pull your money out. I still like to consider the 2% rule in terms of the appraised value on the cash out. In this case, $90k-$100k. Even with those numbers, I'd still do exactly as your inclining to!

Done! Seller financing opens up so many creative doors for acquisitions. I'm on board!

You can check to see if there's other 4 bedroom homes similar to yours that have sold within the past 6 months and are in the same neighborhood boundary, preferably less than half a mile radius away. If there are, you can probably see the difference that extra bedroom (and hopefully more square footage) typically makes as far as value.

Appraisers will basically do the same thing, adjust for the extra bedroom among other thing based on what their "opinion" is of that bedrooms value, which is usually based off comps mentioned above.

That adjustment will be different all over the country, it's all local. An extra bedroom could be an extra $10-$15k in Milwaukee, but be an extra $75k here in Los Angeles.

You can try going to some local investor meetings and see if anyone is actively purchasing there. You can also check to see if there have been a lot of purchases in the area by the same person or the same entity recently with the county registrar. You can also try networking here on BP to see if there's any active investors living around you. 

Welcome to BP @Michael Johnson ! 

TX is not my neck of the woods but maybe @Jon Klaus can steer you in the right direction. Glad to have you on the site and good luck.

I'm no accountant, just to be clear.

My understanding is that all your acquisition costs and "make ready" (before tenant moves in) are depreciated. Certain new items like a water heater or furnace are always depreciated on their own schedule as well. 

Property Taxes, Insurance, PM Fees, any Utility bills, Interest paid on the mortgage(if/when you get one) are all real expenses of your business. Any actual repairs you'll make will be deductible as well (fixing the faucet, leaky toilet, light fixtures, etc.) as long as it's after the tenants move in. 

I've never done this before, but if it were me, I'd do the first option. It makes more sense to me to be contacting the actual decision makers to make the best use of my time! Again though, no experience with this :)

I would say for your first rental, you'd definitely want to take advantage of a conventional fixed 30 year loan (non-owner occupied/investment property) that you can get with pretty much any lender.

Expect to put down 20% for a SFH or 25% for a 2-4 unit property. These loans are available for 1-4 unit properties only.

Welcome to BiggerPockets @Gautam P. , thanks for introducing yourself to the community. It's awesome that you've decided to take an active role here on the site, it really helps with the learning process.

6 years looking for a house? Wow! Hopefully you're really happy living there now! Looking forward to seeing you more around the site Guatam.

This has to be one of the coolest charts I've ever seen. I like how the data is laid out. 

Seems like investors are slowing down this month in my market. Time to ramp things up!