All Forum Posts by: Nicholas Jackson

Hello!

I recently had a conversation with a homeowner in my local area. They own a property around the corner from me that is vacant, and they are willing to sell. The seller made it clear that he does not want to go below 100k as he has made it clear he has come down quite a bit with other people and he doesn't want his time wasted. I would love to take on this deal, but it would be the first deal that I would not use a traditional loan on. It is a fairly large home at about 4.5k sq ft. It has a main floor, basement, and upstairs area with each floor having its own kitchen 2 bedrooms and a bathroom with the top floor having 3 bedrooms. Entrances are pretty awkward, but it could easily be made into a triplex. My concern is that some of the renovations will be more expensive than I expect. The comps in the area I estimate to be around 240,000 to 280,000 from my analysis. Rental comps would be about 1100 to 1200 per unit within this area.

 I believe with my financial situation that wholesaling this property would be what's best for me as I really would like to have more capital on hand. I estimate that renovations would range from 50k to 150k depending on what work someone would want to have done. I am hesitant to get it under contract because I am unsure if this would be a good deal with these numbers. I have not done a wholesale deal before, so I am nervous to jump in and find out the numbers won't work. I do not have pictures as I only have description of the property and the inside from the seller. With the seller out of town I am not sure I would be able to get access or pictures to potential cash buyers. My question is, would it be best to still try to get it under contract and look for a cash buyer, or possibly look to partner with a private lender and take the deal on myself, or is this just a bad deal at this price that I should avoid.

Thanks for all your guidance and assistance! 

 Feel free to reach out if you want to discuss any St. Louis specific deals. I would love to check over your numbers and help out any way I can with finding a good deal in a good neighborhood. Just closed on a duplex in St. Louis and have done a lot of market research in the area and living here I am pretty familiar with the neighborhoods. Happy Holidays! 

 Thanks this is helpful information. I only paid half upfront so could possibly cut the end price if I do find other windows. Something I should ask about

Luckily the current bedroom windows work fine. Do you know if its a violation for boarding up kitchen windows? 

 Sorry to hear that. I feel this shouldn't be an uncommon thing as I am sure people get windows replaced all the time and to have to wait for 4 months for the replacement seems kind of extreme. I will try some work arounds to keep comfort that way I can still get a tenant in as soon as possible.

 Thank you for the suggestion. I already paid for the custom window replacement, but it might be worth to see if I could get a quicker replacement for some of the windows and save some money on the total cost. Thank you!

 That would be good but some of the windows are stuck in an open position. If I manage to get them closed then this should be fine as heat and cooling have been replaced and work fine now. 

 Thanks for the advice! This was my original thinking but wasn't sure if it would be a good idea or if people would be interested considering that work still needs to be done. Aside from the windows all else is livable. I think reducing the rent until it is fixed is a good idea too. Thank you!

I am having an issue where I just ordered new windows and was told the windows may not arrive for 16-20 weeks. A couple of the windows are pretty damaged or stuck in a certain position. I would love some advice on things I could do in the meantime in order to cover them up or do a quick fix as I would like to put a renter in the unit as soon as possible, or should I just wait until the windows have been replaced. Thanks for the advice.

There are a few things to consider. If it is an occasional airbnb are you living there fully occupying. Its possible to consider buying a multi unit to live in one and you can use another unit as an airbnb freely. If its a single family home it would be a bit more difficult unless you had an ADU to use as the airbnb while occupying the main unit. With NACA you can sell or refinance at any point but NACA puts a 25,000 dollar lien on your home that doesn't fully come off for 5 years. If you sell or refinance in this period they can claim this lien on your home. This can only be lifted in matters where it would be necessary for you to sell or refinance i.e. job moving, death if family, divorce, etc. so while appealing from a low interest rate stand point, the program is designed specifically to prevent investor usage. Best is to analyze your situation and see if the program still offers what you need while helping you reach your goals financially. Hope this helps!