All Forum Posts by: Michael DeVowe

Your question sounds somewhat like a person at the mechanic:

"Hello all, I just agreed to get a car.  I need help fixing it and making it drive nice as a whole."

Do not expect other people to do your leg work and answer vague questions. Here is what I suggest: Find a wholesaler near you and collaborate. Learn from them. Offer to help others in the REI world. Meet investors, real estate agents, hard money lenders, title companies, etc.

Agree with @Account Closed Are you planning on doing the rehab yourself?  I am assuming this property is in Kansas, where your profile indicates you are located.  What is the rehab budget based upon?  Did you get a GC in there?  Are there foundation issues, ancient plumbing & wiring, asbestos and lead hazmat issues?  

The property looks like a SFH, but the title in the report says "Dewey Duplex". Are you intending to convert it to a duplex? If so, make sure the city is okay with this.

Also, it appears you intend to BRRR, yes?

@Tom Gimer  Interesting.  Thanks much!

Great work analyzing.  I would stick to the numbers and not offer more than what makes sense on paper.  If you get emotional ("really want this one!"), you will end up over-paying, stressing over the rehab budget, and making less than you hoped and projected.

@Joshua Feasel Using hard money would put the property at ~$100/mo cash flow after all expenses and 15% vacancy.  I am not comfortable with that.

@Jay Hinrichs  "so your just trying to make a commission selling it"  I would not actually own the property, I would be assigning a contract.  I know a lot of people have beef with people assigning contracts, but there is nothing wrong with it.  As a newer investor, I actually am not too concerned about getting "cut out of the deal".  I want to build my reputation.  Either way, the investor is serious about it and would do good whatever the outcome (whether that means an assignment fee for me, or simply a "finders fee" if he buys it under contract directly from my friend).

@Tom Gimer  Thank you for your professional feedback.  How would you partner with the buyer?  I understand 50/50 profits for flips, but I am not quite sure how that would work with a rental.

I will assume you are certain about the numbers on the property itself and you are obviously inheriting tenants.

• Is there anything outside of the tenants' leases that I should be aware of (i.e. - verbal agreements between seller and tenant)?  For example, you want to know if the seller has been doing snow removal for the past winter because one tenant broke his leg, even though snow removal was the tenants' sole responsibility.
• What issues, if any, have you had with the current and past tenants?
• Are there major repairs needed that you (the seller) are aware of?
• Are there any liens on the property? (I imagine your title company would take care of that, but good to ask before you even submit an offer.)
• Do you have any other properties for sale? Even if you are not interested in more than one property, you could potentially get a better deal.

Yes, he knows what "wholesaling" is.  I explained I would either buy it with financing or assign it.  I would love this deal for myself, but I do not have the funds for a down payment currently.

I am interested.  Count me in.

The investor is aware of my position and mentioned he would like to make sure I get something out of it as far as the contract assignment fee.  I am more concerned about the seller wanting to skip me and go to the investor.

Would you be concerned about putting it under contract if you have limited investors interested in the area?  (The numbers make sense for a buy and hold rental, assuming 15% vacancy rate and other conservative numbers.)

I have an investor that is very interested in a mixed use building that my friend owns. The investor wants to speak with the owner to "get more details". I want to make this is great deal for everyone, but am concerned my friend (the owner) will want to do the deal directly with the buyer, find out the desired sale price, etc. Do I just get the property under contract first, then find an investor? I do not want to ruin my reputation (esp. my friend who is very skeptical of my REI endeavors) and have to back out of the contract.

Your feedback would be great.