All Forum Posts by: Nuhan Demirkan

No shame in that Page. Go for it, hope you get it... Just make sure it pencils out... with the new roof and siding (Just curious why won't you do that in the beginning while you are rehabbing?)

Page, I don't see how you are getting $1,358 NOI. Is that annual? If you are collecting $2125/mo in gross rent and your expenses are $1,188/mo plus R/E taxes ($200/mo probably) I come up with $737/mo. with no maintenance or other expenses figured in. From the seller's point, if the property is worth $325,000 and he is collecting $1700/mo in rent x 12 mos = $20,400 annual, minus insurance and taxes - $3600.00 = $16,800. That is a 5% return on $325K. But you want to give him 4% on $225K . I don't see how this is a good deal for either of you? I'm probably missing something...

I guess the question is are you partnering in the business or the deal? If you are partnering in the deal each deal can be structured differently. If you are partnering in the business it is a little more involved and more consequential. Be careful!

I do see Robert's point though. One partner is risking his capital the other is his earnings. If Robert did not do the work and they hired a contractor how much more would it cost to rehab the house? The money partner benefits from having free labor thus a bigger profit (hopefully). If the deal loses money they both lost. If the money partner is made whole on the next deal when does the technical partner become whole? Never? Unless the other partner is also bringing expertise in selling, marketing, lead generation, closing, etc., my suggestion is go at it by yourself. Borrow the money from your would be partner at a reasonable rate and pay him back.

Bill, please explain, I have no idea what you just said?

Thanks Wayne,

Hello,
I am planning on doing wholesale and retail deals. One question I have is who gets the profits from the wholesale deal, me or my broker? Any R/E agents out there who experienced this?

Keith, I am actually pondering the same question myself. I currently have 10 homes with decent cash flow but not yet enough to surpass my employment income. I guess the short answer is when you can replace your income comfortably. However, I am assuming you will be either wholesaling or rehabbing to sustain yourself. Have you done either successfully so far? I have not. My plan is to do a few wholesale and retail flips while I'm still employed, which would give me the experience and the cash. I will most likely lose my ability to do fannie backed cash out mortgage strategy which I've been doing so far due to my employment income. Ask yourself "Why Do I Want To Do This". If the answer is convincing, plan your move and execute. It is a marathon not a sprint...
Good luck,

Thanks guys, it would be interesting to know where in the US you can rent a $100K home for $2000 mo.
I am not so sure about the 50% expense ratio either. But that's a different discussion.

In the latest podcast as a rule of thumb it was stated that the monthly rent should be equal to 2% of the purchase price in order to ensure the property will cash flow. I'm not sure this works, especially in my area (Wash DC metro). There is no way I can get $2000/mo rent from a $100K house. Any thoughts?