All Forum Posts by: Kyle M.

Assuming the process goes: 1. home inspection (to find out all issues) 2. then estimates from a GC or separate contractors to get accurate cost of rehab? nice thread in BFI btw, thanks!

 yea making a .5 bath would be a good idea, the problem is that it would take years if I was to do it all myself!  I know very little about construction and work full-time, but I could hire my own separate contractors to cut costs.

 thanks for the advice. 1% like you said is not bad, but the taxes would make this negative cash-flow.  And with it not even being 1.5 ba its most likely as pass on this one.  At least this gives me a gauge of what a full renovation would cost when I look at future deals. thanks

 Thanks, I'd probably want to play it safe and assume $1200 or so as the rent.  What would your estimate be for the construction that you mentioned?  I would plan to hire a GC to knock this out.  10k,20k,30k in construction costs?

Hey guys, I am still looking for my first deal and back on the hunt! Buy & holding "average plus" properties in my area doing yield a positive cash flow in my area. My new strategy is to rehab a "fixer upper" and turn it into an asset that produces positive cash flow.

Below are some pictures of a 3b/1ba 1300 sq foot house. What do you think an estimate would be to do a full rehab to this property? The end goal is to rent it out so basically going low-end on a lot of things.

Quick Financials:

50K listing price *bank owned*

~$350 taxes per month ($4200 per year)

Median Rents - $1450 for 3br (rentometer.com)

Any advice would be appreciated, thanks!

Median Rent: 1400

So property rents for 2.5% of value.

More precise numbers are:

Mortgage: 290

HOA: 190

Taxes: 380

- I factored in the HOA fees into maintenance expenses because I dont have to take care of exterior/landscaping etc.

So I'm coming in with +30 cash flow a month on this property. Plus 55k is list price, I'm going to go in with a lower offer. This is a condo btw.

got approved by another lender! sub 5 interest rate and able to put 20% down. I have never purchased a property before and the mortgage guy seems to want to steer me towards buying this property as my private property, which I am against because I do not want to live in it.

He said it will give me more options in the future, obviously it would give me the option to do an FHA. But I clearly stated that I do not want to live in this property and seems to keep pushing it (saying we will talk about it in person). What angle is he playing?

I also clearly stated that the decision to purchase this property as an investment is a lifestyle decision (because I do not want to live in this area). I see how it makes financial sense though.

My guess is that he gets extra commission on FHA because of the PMI involved on it. Also, he has the ability to sell two mortgages if I live in this one and find a different investment property. But I am just a newbie and this could be wrong, thoughts?

The property in question is $55k, and I recently did NOT get approved for a loan and was really really surprised. I was looking for a quote with 20% down as an investment property, and they shot me down despite having a decent salary ~50k and credit in the upper 700's.

The reason was is because I currently rent an apartment for 1,000/month and I plan to still live there after I purchase this property.

So the view of the mortgage company - my expenses are (per month):

$1000 (rent) +

$400 (property taxes) +

$200 (HOA fee) +

$250 (mortgage)

= $1750 (too much to give me a loan)

They couldnt take it to consideration my bonuses from work or rental income because I dont have a 2+ year history in either.

How do I get a loan?

The mortgage guy said basically I have to lie and say I'm going to live there. My net worth would allow me to purchase this house cash but there's no point because it would be a huge part of my liquid cash.

Any suggestions would be great!!

absolutely, i will. Just contacted a different realtor that seemed more willing to work with me so we will see how it goes...

yes, I agree i would like a buyers agent since this is my first purchase. The Realtor that I contacted said he would send me the rental comps and didn't. I am a big proponent of "doing what you say you will do". So I am moving on and in the process of contacting another agent.