All Forum Posts by: Rodney Marcantel

Details?

• Purchase Price
• Rehab Costs
• Closing Costs
• Carrying Costs
• Is $125K asking or sold price?

Work on house looks fantastic. Are the counters silestone or granite? Great job.

Great post and comments.

I'm demoing this one. 

http://www.remodelcostspreadsheet.com/

Depending on current cabinet condition, you could refinish them and add new hardware and then update backsplash and counters. Depending on what you plan to do with the property (lease or flip). If flip, then granite counters and glass tile backsplash. If leasing, then cheap tile backsplash and either Formica or Silestone counters. Just my opinion on what I would do. Keep us posted and send pics when updated.

Welcome Colleen. We are pretty new in the business of RE investing as well but do have one single family home rental property. I like and agree with Daniel's advise as I've done a lot of research myself over the last 6 months on investing, and this was after we purchased our rental property. 

My input would be do be hyped by all the expensive trainings out there although I did attend FlipAdvantage training (Tarak and Christina El Mousa) and learned a lot, but the coaches there looked at our situation and asked "why did you come to this training, seems like you have a plan and the funding to move forward?". So we didn't attend their $20K Vegas training. We found Bigger Pockets right after that training and love the training and forums. Real people giving real input and advise.

Also, make sure you have a good funding source and cash to work with, although you can work this business with very little cash, but it's much more work and requires more creativity in securing and financing properties. We are using a HELOC since our house is paid for to tap into our equity.

We are looking into house flipping right now in the Dallas area (where I've lived all my life). Love San Fran. Great city. Spend many business trips there and Petaluma (Sonoma County). Blessings on your business.

Great comments on this post, Will. I have one rental bringing in net $1,600 monthly as the house was purchased with my cash. Our personal residence (where we live) was also paid for with cash and have no mortgage. We (my wife and I) run 2 businesses (Nutrition shop and Web Development) that brings in a enough to sustain us along with investment money that brings in about $5,500 monthly. I was forced out of my job as an Electrical Engineer in 2007 and been self employed ever since. We are working to get a HELOC now to do more investing (mainly flips for now).

Expanding into RE investing has been a dream of mine for many years. And now I have the opportunity to make it a reality. 

PS. The only flip shows to me that is somewhat accurate in their numbers is "Flip or Flop" and "Flipping Boston" as they always show their holding costs, realtor commissions and other costs when showing their numbers at the end of shows. "Flipping Vegas" is one I like for entertainment only because none of their numbers are ever realistic.

After looking through their website, I'd say no to the program. Looks like a lot of hype. May have some good things but to go through the process of getting leads and working them may be good for some, but today's technology gives you access (for a fee) to many online services that pull county, city and tax data to support enough deals for anyone. I'm part of 2 services that provide wholesale deals for rehabbing or renting and pre-foreclosure, foreclosure and REO properties anywhere in the US. Buying from a wholesaler presents the least amount of back and forth work but does come with some risk and higher cost versus foreclosures and bank owned REO properties but those require more work to negotiate and close.

My assessment @Darrin Carey was just quick input. I agree with your details on possible legal avenues for being sued as a landlord. Like you said, "many lawsuits never get as far as the LLC" is reason enough to not require an LLC for flips. And I would suspect that if you're not disclosing property issues, you shouldn't be in the business anyway.

LLC is only necessary with buy and hold properties (rentals) to protect personal assets against any potential tenant legal actions. LLC is not necessary on wholesale or buy fix and flip properties. But this is just educational information. Consult your CPA for more detail information.

My fist, I have to say, was my first home after 4 years of marriage. Paid $116K for a 1946 sq.ft home that was only 2 years old. Sellers were asking $129K but I negotiated it lower because the owners were relocating for work and had to sell quick. 10 years later I updated the kitchen with custom cabinets, open up floor plan, and hardwood flooring (and new appliances). Spent $27K on updates and had it appraised $50K higher.

21 years after moving in, we decided to sell. So I updated the bathrooms and laundry room from vinyl tile to ceramic tile, removed wallpaper, textured and painted walls and added slate tile to front porch. Spent about $800 on these updates and $1,200 on new furnace, and $1,500 on new A/C. Sold the home for $215,500 in 3 weeks.

$215,500 - $27,000 - $800 - $1,200 - $1,500 -6,500 (closing costs) - $116K (purchase price for home) = $62,500 profit. That's about 2,976.20 in profit annually (not including taxes and insurance).

With the market appreciation rate in our city the last 2 years, had I waited one year to sell, I could have sold for $280K or more. But that's ok, because we paid cash for next home that's valued at $480K now (3753 sq.ft.) that we paid $360K for 2 years ago. Used our profit on our home and my wife's parent's home (sold for $280K) to purchase this home with cash.

Now we are working to use the equity in our new home to get a HELOC and invest in more properties. Currently, we have one other property that we paid cash for and are renting for $2,000 monthly - expenses (about $1,600 profit on $227K investment = about 9.5% ROI).