All Forum Posts by: Ryan Schuler

Hey guys,

I have been basically non-existent on this platform for almost a year, and the reason is because I have been working on my first home that I bought in December 2014! I wanted to document and share my experience a little as to how everything has transpired and the steps that it took to get to where I am today. We aren't finished yet, but we are much further along than we were a year ago. Nothing has gone as planned, but luckily I did a good enough job in pricing the home that I am ahead of the game now and already have improved the equity in my home by $70,000 with $35-40,000 in rehab costs.

Here are the details of the deal:

-Memphis TN Home built in 1922 in the midtown area. Area is very eclectic/artsy. It is growing and houses are appreciating in value. Mix between retirement age group and younger 20's-early 40's. LGBT friendly (center is right around the corner). Good area.

-Home sold via Realtor. Previous home owner died in the home of old age. She didn't have any family, so she left the home to neigbors who had been taking care of her.

-Home had been on the Market for I think 45-60 days, I am not sure.

-Listed for Originally listed for $135,000. Purchased the home for $120,000 with $26,000 down to avoid the MIP. Initial appraisal was $126,000.

-Nothing had been updated since at least the 1970's. Structurally there were/are some unlevel floors, but nothing dangerous or that would compromise the integrity of the home. Some old termite damage but it had been repaired and no new termite damage was noted by the inspector.

The things that I knew I needed to do when updating were:

- Update electrical Service to 200amp service coming in (to run all needed appliances and computers, etc)

-Add outlets

-update plumbing (originally planning to just add new hot water heater and add new plumbing features.

-new kitchen

-update bathroom fixtures and retile.

-Refinish the existing wood floors

My initial thinking when I bought the property was that it would only take a few months to rehab the home, and that it would be in move-in condition in 3 months, tops. Well.... I am now into my 13th month and well... everything is still not finished. We have learned that contractors take their sweet time, things break unexpectedly, things cost more than initially thought, and spackling/drywall repair and painting gets old after a while. 

I will upload the photos of the initial condition of the home another time (unforunately I don't have those with me at the moment), but I will now go into detail with the improvements that we have made...

Lori,

As a former college foreign exchange student I like the advice from some of the others to contact the international department at the local universities and try to work a deal with them on a short term lease for their international students. They typically can have a few different options for their students (homestay/own apartment/group housing) and might be looking for someone to partner with for some short term stays (fall, spring, summer). I have not rented any properties yet, but I think you might be able to find something there if you contact the schools. It might help offset some losses if you are looking for someone in the short term till the regular renting season.

Hello Everyone,

I am doing my research and I ran across a possible SFR on the HUD website (in memphis) that looks nice and wouldn't need much work at all, but the price is high for rental by my calculations and would need to be knocked down a bit before I would make any moves.

It is listed at $106,000, but by my calculations I would need to get it down to at least $95,000 for me to make the cashflow that I would want. Are the prices for HUD homes very neogtiable or do you typically have to offer close to the asking price? Any experience with this would be helpful.

A glimpse at the home if you are interested:

Jonathon,

I'm not sure if I could get a loan or not, I didn't realize there were minimum restrictions on the amount that banks would loan?

I have a question: What would be the benefits/drawbacks to purchasing one apartment in a long stretch of apartments?

I have noticed a few 2 bedroom, 1 bath apartments in a revitalizing area near me that are for sale for around $28,000 each. With about $5,000 in repairs this property could probably earn $530-550 a month. With a conventional loan, 20% down, at 5-7% interest, with my repairs taken into account, and 10%vacancy rate, my formula spits out a Cash ROI of 17-20% (J Scott SFH Rental analysis).

I have looked at one of these apartments before when I was looking around for myself to live in, however I didn't like the inside of the apartment I was looking at. If the numbers seem so good, what are the drawbacks to this situation? Would this be the same drawbacks as a condo or would it typically be different?

Thanks!

Thanks everyone!

I appreciate the feedback @Nazz Wang @Cameron Palmer @Darnell Kramer @Andrew Syrios.

I live in Memphis, TN and will be investing there. I am sure much of the information that you provided will apply there.

Hello everyone, this is my first post! 

I have done a fair amount of research in many different topics but I am still building my knowledge base (no deals yet). A question that I have is what the taxes and insurance rates for homes are primarily based on?

Are they primarily based on the value of the home? I assume there will be county/state/federal taxes, but I am wondering what the tax numbers are based off of, and the same goes for insurance.

For instance, within the same area would you typically find a $100,000 home and a $500,000 home with the same percentage of the value taken out for taxes and insurance, or is it more of a fluctuating percentage based on a number of different variables? Is there a generic formula you can use to determine these sorts of things or is it a very specific calculation for each home based on multiple factors that can't be generalized?

I am trying to get a better idea of how I can estimate these costs to put into my evaluations for properties, just looking for some direction.

Thanks!

Ryan