All Forum Posts by: Michael Lauther

@Jimmy Stewart your SDIRA should be able to get a seperate tax ID Number and your Custodian could help you apply for one.

@Michael H. apparently I misread the specific area in Akron you mentioned in your post, too much Christmas Eve wrapping I guess. I would check the demographics of the zip you are looking in and compare it to my observations. I believe they are still relevant to your situation.

Best of luck.

@Michael H. The analysis regarding the 50% rule is right on however at $40,000 you should be looking for $800 a month rent. I am not familiar with this area but it does appear to be similar to Dayton OH . In Dayton this property would be a bit above retail. Based on the demographics of the zip code and a number of properties in need of repair selling for $7,000 your return would not be enough for me to look at the property.

My Experience tells me that you may be able to pick up a similar property for closer to $30,000 even if you have to buy one in need of rehab. This price point would be more suited to a $700 anticipated rent. Remember I have no experience in the particular area you have chosen.

Vacancy in these areas can eat up profits very fast and the fact that you are financing means you are on the hook for the $170 a month mortgage plus expenses but the real cost of vacancy in the lower price point markets is the vandalism that occurs when your property is vacant. an $1100 bill to replace stolen plumbing and a $500 bill to replace stolen electric wires on top of normal expenses will quickly put you into the red.

I am an investor who believes this market can be profitable but if you spend too much on the front end and borrow on top you are in for a rough ride. My primary experience in Ohio is in zip 45403 and zip 45405 with all my property concentrated in one small area that I have come to know very well.

I see investors from out of state come into Dayton and spend $30,000 on properties that should sell for well under that but because the market they are use to is much higher they believe they are getting a buy.

The 2% rule works well in much of the Ohio Cities because investors need to be compensated for the risk of investing their capital in these areas.

Best of luck, I look forward to hearing about your success in Clevland

@Gary Dubovick

welcome to BiggerPockets. you will find a wealth of information on this site so develop a plan set your goals and take action.

best of luck

Michael

Ryan best if luck to you. I am a NY investor who has several properties in Dayton and see many opportunities to build a secure buy and hold portfolio. Make sure you have a reliable team to rehab and maintain property.

@Joshua Dorkin Email sent today.

My estimate would be $15,000 but the cost to have finished it quickly using a larger contracting company would be closer to $25k it remains to be seen if doing it piecemeal with local contacts will actually save me money. It certainly has not saved me aggravation and stress. Using a large electric, plumbing and heating company for pulling permits on that phase and local underemployed workers to complete demolition clean up, framing , drywall and paint for the rest. The ARV of this property is no more than $38K but there is not much of a retail market in this area. Rental value is around $650 a month from sec 8.

Re framing burnt out rear of property including roof , tear out damaged material and general clean up cost approx 6,000 plus $3,000 material. This includes new cabinets in the kitchen, rewiring damaged electric and plumbing. additional electric and plumbing remains as well as new flooring and carpet.

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@Bryan L. we tore out the most damage sheet rock and plaster on the first floor but the upstairs is cleaning up nicely. found some melted wires where we did not expect them and are still working on it. It is a difficult task to manage from NY and have experienced some unforeseen delays. Will update as we make progress. waiting for electric and plumbing inspection from the city before we can close up the walls.

@Mike Cartmell I am trying to understand the situation.

you are considering making a $5000 loan to someone who cannot otherwise get any loan. Given the legal and moral risks that are obvious I don't see why you would take the risk unless you believe that the individual would default and you could end up with the property. I am not clear.

Who owns the property now?

If he owns the property and went bankrupt could he still have been able to come out owning a property with that much equity?

Is the tax lean held by a private investor or is it with the county? In many jurisdictions it can take years for the county to come after the property .

When you say the owner wants to redeem a lien I take that to mean the owner of the lean has taken ownership of the property and there is some period of time in which the owner can take back the property.

I apparently have more questions than answers here but would like to see someone who is knowledgeable chime in.

@Andrew Olson i have learned that it is essential to become knowledgeable about the specific area in which you purchase real estate. Find someone you trust to research and visit the area thoroughly before you commit. Look at crime statistics but also have them visit the community at different times morning evening etc and talk to neighbors and business owners in the area. A difference of only a few miles can be critical in some neighborhoods.