All Forum Posts by: Joshua Feit

BP!

I have a quad -- have had it for three years. On paper, it looks like it's going to cash-flow, but it doesn't.

I bought it for $73,500, put 25% down, and financed the rest.

Rents are a total of $1,900 (475x4). Tenants pay utilities. I budgeted: 

700 for mortgage (PITI)
190 (10%) management
190 (10%) vacancy
190 (10%) repairs
190 (10%) CapEx savings
100 for lawn service. 

That's $1,560 a month for all expenses, including the mortgage all-in. So that should show a net of $340 a month.

It's an older property, and it keeps having maintenance requests. Nothing major, but enough that I am either just breaking even or losing a little every month.

QUESTIONS:

1) Eventually, once I have fixed most things, will this property ever start making monthly cash? Or with an older property like this, are there ALWAYS more maintenance requests than I anticipated?

2) If I am generally breaking even on this property after paying the mortgage, is this a keeper? Or does the string of maintenance requests make this one a DOG?

Grateful for your perspective!

@Patti Robertson -- Sure thing! 978 Sims Ave NW Atlanta 30318. Mine is listed for $1195 as a 4/3. I think $1000 is very realistic, as I know that an identical unit just rented for that three doors down.

@Robert Gilstrap -- They are blaming the neighborhood, saying it is just an undesirable street. They are not wrong, but all the other units on the street are rented.

@Dan Mahoney -- You are right. The tenants (and Atlanta Housing) doesn't care about asking price. The tenants care about matching their voucher to the apartment size (number of bedrooms), and once the tenant is lined up, Atlanta tells you what they will pay.

BP!

I use one property manager for my rentals, and overall I am really happy with their services.

Last year, I bought a duplex in Grove Park. Nice newer building, and we rehabbed it well. We wanted to hold a property right near the Atlanta Reservoir project, and when this came along, we picked it up.

All kinds of potential in the future, but for right now, it is a struggle to get it rented. One side is still vacant -- has been for six months. Some of that time was working with Atlanta to get the housing approved, but mostly I think the problem is that the street / neighborhood is pretty rough (some noisy neighbors and a few shady characters). I would think that it would still appeal to Section 8 tenants, as most of the other houses on the street are occupied.

Here's the question:

Do you think this is more of a problem with the property management company not marketing it correctly? Or do you think that the location is causing this to be difficult to rent?

Bonus question:

If you are a property manager with Atlanta Section 8 experience, or if you know a good one, I'd love to connect with you.

Cheers, Josh

Hi BP!

I'm working on a first flip, and I need to raise $35K in addition to my own cash to make it happen. I have a potential lender lined up, but now I need some help with the brass tacks of the relationship.

Snapshot of the deal:
Buy for $65K (already closed)
Sell for $240K
Rehab/holding costs: $130K
Estimated timeframe 3-4 months

Questions:

1) What percent return should I offer on the $35K? (Thinking somewhere around 8%?

2) Should I offer any 'points' -- 1? 2?

3) Monthly payments? or just a balloon payment on this project?

4) Most importantly: Do I need to get a RE lawyer to draft a contract? Or do I use a third party company of some sort to put that together? Or just a standard contract that I can find somewhere? (In other words, how do I keep all of this legal on paper?)

Thanks for the help!

@John Claborn

Thanks John! Would you mind sharing the coverage numbers (amounts of liability, etc.) you recommend?

What's up BP!

My business partner and I are working on our first retail flip! We bought the property for $65K, it needs about $120K worth of work, and we hope to sell it for $240K.

My questions today:

1) What sort of insurance coverage do we need on the property itself while the project is running?

2) What coverage should we have on our partnership LLC?

3) Anything else we need to know about protecting our *donkeys* as we proceed?

Thanks for the help!

@Scott Lepore So the million dollar question is:

How did you find the good wholesalers? Trial and error? Or something a little more focused?

@Will Barnard

26 pages of posts in that thread! You, sir, are the king of working with bad wholesalers. Award granted. Wishing you (and me) much better experiences in the future.

Cheers,
Josh

@Brandon L.

Thanks for reaching out. Definitely respect what you and others are saying about the importance of working with licensed professionals. However, at least in my limited understanding, agents are mostly dealing with on-market MLS / FMLS properties, right?

In the neighborhoods where I am investing, on-market deals always have a swarm of people like me descending on them. There's too much competition, and the prices are usually inflated. The only way I know to get real deals is to find off-market properties.

I'd rather work with an agent any day, but it just doesn't seem to work out well in this market.

Glad to hear your counterpoints!

Great discussion here. Looks like we hit a nerve.

@Brandon Turner @Mindy Jensen I think this may be a good topic to address directly in a podcast. Thoughts? I know I'd love to hear some good debate about the merits and demerits of wholesalers.