All Forum Posts by: Paul Sorgi

@Matt Jorgensen  I always structured each deal differently depending on the investors needs and concerns.   For example I did a flip where I had an investor put up all the money.  I gave him 5 points and 50% of the profit.  Another deal I had an investor put up all the money for a buy and hold and I am a 50% owner in the business.  I do all the work he just collects checks.  I am sharing this because I think you are looking for your first deal and I apologize if my assumptions are wrong.  Even though I knew my partners before ever investing with them (friends and family) I only peaked their interest during normal conversations about "what are you up to"  and them showing interest in what I was doing.  As time passes and your deal flow and experience increase you can start to put together a portfolio of your deals.   I lean more to having a short description of your intentions such as a high level business plan versus getting down to how much you will pay or even expressing limits of how much you will "borrow". 

You should be able to find state specific lease agreements on websites like legal zoom.  I would speak to local landlords and see what they like to include that is not included in the state specific agreements.  Any additions you should run by your attorney.  

Set your parameters for choosing a tenant before you start taking applications and run that by your attorney too.  For example you may pull a credit check and decide up front that you are not renting to anyone who has a FICO score below 650.  If you have a solid list then your denials will be hard to challenge from those who feel you are discriminating. I am sure people with more experience will be by to post their suggestions as well.  Happy Investing !

Using your numbers and making some assumptions this is what your deal looks like.  I used the BP rental calculator.  I am not sure how you went from offering a top price of 30k with 5k for rehab to a total cost of 37k but the numbers are small enough that it does not  greatly impact the deal analysis.  

This assumption has you bringing 1500 to the closing table and I was just taking a shot at what it might be. Based on the numbers you have a deal. I don't know the area or how you determined ARV. I also don't know what type of tenants you will rent to so the vacancy, repairs, cap ex etc. might be more like 10% instead of 5%

If you are going to live there then go with the FHA loan. I can't speak to the laws in Illinois but in Mass private lenders will only lend on non-owner occupied properties.

@John Haines welcome to BP.  

Maybe work with other investors to buy homes and rent lots from you.  Might be a great opportunity for someone just getting started.   

@Corey A. have you found a deal yet?  Here is my perspective.  Do not expect appreciation, expect vacancy, evictions, repairs, code enforcement appears to be less stringent with locals than those from outside the area.  You have to be on top of your tenants all the time.  

It would not stop me. If selling in the winter is a concern be more conservative with your ARV and buy accordingly. I have rehabbed in the winter and sold 3 houses during the winter months. Being in the Northeast it does add to your holding costs.

Flipping.  My first deal was a flip.  It was 2011 and very easy to buy a house that needed repair.  

Just an idea.  If the owners medical condition is going to impact his ability to make those payments and keep up with the property maybe there is an opportunity to work with original lender.  

@Dean Boyer absolutely a great inspiring story.  Wish you and your sons the best!