All Forum Posts by: Randy E.

@Casey Miles, check out rentometer.com.  There are a couple of others, but I can't recall them offhand.  Keep in mind, the numbers are not necessarily spot on, but at least you'll get a ballpark.

One thing I like to do is call the numbers on For Rent signs in the same neighborhood and ask what the rent is.  It's quick and easy.

Welcome, @Dominick Hayes.

You and your fiance have a great opportunity to do something I wish my wife and I had done many years ago.  Before you two settle down and buy that dream house that going to consume a substantial portion of your credit, take a look at House Hacking.

Basically, you buy a duplex or triplex, live in one unit, and rent the other units for income. You can get an FHA loan for this, which means you can start of with a down payment of only 3.5%. You're obligated to live there for one year, but after that you can move. At that point, with a year's experience of being a landlord, the smart move would be to buy another multi-unit property via FHA, live in one unit and rent the other units. Repeat this three or four times and you'll be on your way to being set up.

Search the forums and BP in general for "House Hack" to learn more details.  

Good luck to you!

 Isn't that the hard truth?  If only I had the money to chase every deal I saw.  One deal hypnotizes me into thinking I have to have it, but it's not the right time financially.  Then, after that one is sold to someone, another deal materializes to mesmerize me all over again.  And so it goes.  

Man, I really have to look into a portfolio loan.  That's the "deal" that I'm obsessing over lately.  As soon as I complete this current rehab and rent it out, I think I'm going lender shopping.

I agree with @Brian Ky. First, check to see if the property appraises for more than the $120K purchase price. As I understand it, the requirement by the lender for you to carry PMI is if you are borrowing more than 20% of the value of the property. If the property appraised for $150K, and you put down 5% of the asking price, you will not be borrowing more than 80% of the value of the property. Thus, you will should not be required to carry PMI.

It's worth a shot.

 It may come to that.  I just wasn't using the nuclear option as the starting point.  To each, his own.

 That's fantastic.  If you have been pre-approved, I would just use the bank loan and your savings.  Since I've been on BP, I notice some people prefer hard money loans over traditional lending or cash deals.  Personally, I'd rather keep it all on me, if at all possible.  That way all the skin in the game is mine.  Knowing that makes me focus more intently on all the facts and numbers and making extra extra sure I don't fail.  But maybe that's just me.

If you are pre-approved for a certain amount, just search for houses in that range.  I say this only because you mentioned seeking hard money loans.  I think hard money loans may be a good idea in the future, but I think you'd be better served putting your skin on the line in the beginning.

@Steffan Daus, you are on your way to being an "overnight" long term success.  You sound like you want it.  You sound like you're ready to work for it.  You sound like you're ready to try to crunch the numbers and make sure they work for you.  And you sound like you have the financial wherewithal (or credit) to pull the trigger -- a lot of people just have a dream, no savings, and bad credit, but you seem to have your ducks in a row.   Now you just need to do it.

Go do it.  You're at a great age and point in your life to start this.

Good luck!

I would definitely replace old galvanized pipes.  In fact, I don't even wait for a leak.  If I buy a property and the plumbing is old, I just replace everything, from the incoming water lines to the sewer hookup at the edge of the foundation.  Leave nothing to chance.  It's easier to do it before you start renting the house than to do it while tenants are in there.

 Before you can become an investor, you must have some money to invest.  Go to a bank and apply to get pre-approved for a mortgage.  Then you will know what your ceiling is.

If you prefer to use your savings, then your ceiling is whatever amount you have saved.

If you want to pursue a hard money loan, you have to be realistic and ask yourself why an experienced hard money lender would loan money to someone who has never rehabbed a house before and admits he doesn't know the first thing about estimating the cost of repair.  On the other hand, maybe you personally know someone who will loan you the money for this project.  If that's the case, maybe you don't have to worry about your lack of experience and lack of savings impeding your chances of acquiring hard money approval.

Calling the list agent may not result in actually seeing the properties.  When dealing with new clients, some real estate agents require you to present written proof of funds to prove you have the financial wherewithal to actually purchase the property.  The agent doesn't want to waste his/her time showing houses to people if the customer can't actually buy the house.  But again, if you know a real estate agent personally, maybe you can get around the Proof Of Funds request.

Same deal with convincing a contractor to go with you.  If you know someone personally, that's probably your best shot.  Ask them to visit the property with you and give you a rough estimate of the repair total.

Oh yeah, as already asked: How did you calculate those ARV numbers? Miscalculating that (and the repair costs) is a surefire way to come out of this at a loss. Instead of setting the ARV slightly above the comps, set it slightly below. That will be a safer estimate.

Good luck, but take your time and read up on this process. Jumping in before you have half an idea of what's going on isn't what you want to do. You don't have to know everything, but you need to know a few things about REI.

Welcome to BP @Abdul-Rahman Lediju. Good luck in your future REI endeavors. I have no doubt you will succeed.