All Forum Posts by: Nick Connor

Richman,

Thanks for your reply regarding my post. This will work perfectly with what I'm trying to accomplish with the various contractors bidding on my job. I'll have to simplify it a bit for what I need to use it for, but this is GREAT. Also, one last thing, do you send this out via email or do you print this out and then give it to them?

My goals for March are as follows:

1. Sell my first Flip. This will continue to be my #1 goal until it is finally out of my hair or in my case scalp.

2. Put the finishing touches on the plans I'm going over on the new duplex I just purchased. If I can't get this done for 40k, then I need to make a decision within 2wks if I have to move on. Long story here.

3. Further my eduction on real estate investing by reading 2 more books. One of them is Cash Flow Quadrant and looking for a second book to follow, suggestions on this would help...

4. Look for another rental that my wife and I can invest in ourselves to get her motivated in OUR new investing career.

MikeOH and 702, thanks for the replies, it diffently cleared some things up for me and I'll have to get some comps in the area to see what duplexes are going for.

I'm looking for a contractor in the West Michigan Area, preferably in the Grand Rapids area, to use on a regular basis for all my remodeling needs. I'm a relatively new investor in the area and am in the process of starting my third deal. If anyone has a good contact in the area, please let me know.

I have a question regarding the Cap Rate formula that someone told me about today. From the information that I gathered on multi units, you take the yearly income on your investment minus the yearly expenses, then multiply that number by 10, which gives you your estimated value of your house. I know the Cap Rate formula is a little more complex, but I heard this was a simplified version of it.

I'm about 15 days away from investing in my first rental unit in Grand Rapids MI and starting to have second doubts about this place. I bought this house thru an auction and was given 30 days to close. From a cash flow stand point, this house will get me the 2%, but I was wondering if anyone takes into account this Cap Rate formula if they intend to sell the house eventually?

Can anyone analyze this deal for me and tell me if this is a good buy or not?

Purchase price=23,000
5% down= 1,150
auction fee=3,000
rehab=40,000
total investment=67,150
rent price=~680(based off 2% rule, this is a 2-unit)

No problem getting the 2% for a monthly payment in the area, house should cash flow, but the only thing that is boggling my mind is the Cap Rate formula. So based on this formula you get;

680 x 2units=1360
1360 x 12months=16320
16320 x 50%(approx. expenses)=8160(NOI)
8160 x 10=81600

Does this make sense to anyone if this is the way rentals work? If for whatever reason I want to sell, I'll probably have to pay 6% for closing, so take off 5k off the 81600, which won't leave me no where near the 20% minimum I must have to do a deal (20% is my rock bottom I need on a flip to pay for my time).

Maybe I'm making things more complex than what they are, but if someone could break this down for me I would appreciate this immensly on making my decision on continuing with the purchase.

Thanks!

Nick

P.S. sorry for any errors I've made through out this post, please ask me if you need any clarification on anything I've wrote.

Eric,

Thanks for your reply regarding my questions. All that makes sense to me and that's the reason I want to stay away from a LC. I'm trying to sell my flip at the moment and have had multiple offers on a LC and a LO, but I'm holding off at the moment in hopes for straight up sale. I guess what I'm trying to figure out is why would someone prefer a LC?

Hello,

I'm not sure if this thread belongs in here, but I couldn't find anything on this in the forum, so feel free to move it if I'm in the wrong category or direct me where to find info on this.

I have a couple of questions concerning Land Contracts. Being new to the biz and talking to other newbies, we seem to have different opinions on this and I thought this would be the most logical place for me to get my info from some of you real estate pro's.

My friend seems to think LC's are a better option than going with a lease option. I'm having hard time believing a LC is better only because of the foreclosure process if they default. You're talking about a minimum of 7 months for the redemption period and there's still court (if needed). This to me, seems like a high risk option for someone just starting out. So here are my questions...

1. What are the benefits of a LC compared to lease option?

2. Have you ever had to go through redemption period on a LC?

3. If so, did you ever buy another house and used a LC again?

4. Why to # 3?

Thats all I have for the moment and I'm sure more questions will arise as I read your inputs regarding this. I'm looking forward to here from some of you more experienced investors on this.

Thanks,

Nicholas

Ryan,

How do you know what the minimum acceptable offer is?? Is that the original asking price? I'm very interested in two HUD homes at the moment and I like to be able to make an offer on one this weekend, but I'd like to know how much I should offer. Previously, I tried to make an offer on another HUD home and just got a flat out refusal. I was told by the broker the way the system works is you just keep making offers until they accept one. Well, that's a little annoying and I start to lose intrest in the house b/c there's a ton of house's in distress in MI.

Thanks!!

Beachbum,

Thanks for your response on this topic, but I've tried searching for this prior to this post and got nothing. The only thing I get is the usual jibberjabber that I have to buy $400 of crap that I'll never touch just to see a template of the RPF they use.

I know the actual details of the project need certain job descriptions to fit the needs of each project, but all I want is something I can use as my base and make the proper mods when future projects arrive. Like I said in my previous post, all I want is something to use so I can quickly weed out the bad quotes from the good ones (and I don't just mean $$).

I'm yet to try my local office supply store and I'll have to do that today, but in the meantime, if you have any recomended sites to visit please let me know

Thanks!!

My goals:

1. The most important goal for me at the moment is to sell my first Flip. My monthly goal for this is to help with the marketing strategy with my realtor. I'll be doing this by passing out flyers through out the neighborhood, church's and around local business'.
2. Finalize the deal on my first wholesale.
3. Come up with an appropriate business name that I'm trying to build.
4. Build up my buyers list with more investors and mainly homebuyers.
5. Find a private investor in my area.
6. Lock in my next property.
7. Finish reading Rich Dad, Poor Dad.

Thanks,

Nicholas

P.S. Nice thread Andrew!!