All Forum Posts by: Ryan Copeland

@Lydia T. Hmmm, insifhtful 🤔. What do you use for skip trading and how accurate is it?

I went to the PropStream website and checked out the features. They seem to have similar features as DealMachine. I did notice that they do not have skip tracing like DealMachine does.  I will say that the skip tracing with DealMachine does not return accurate phone numbers most of the time, but I have gotten some working numbers.

Also, PropStream costs $99 per month whereas you can use the DealMachine features for $49 per month.

I'll have to check out the PropStream app. Do they also have a CRM? 

@Jim Stanton I think for us to be able to give feedback, we need to know what you can rent the property for.  If that $351 positive cash flow does not include expenses, then it may not be a "great" deal.

Honestly I think the answer is going to be subjective. A "smart investment" would depend on what your goals, criteria and strategy are for REI. For instance, if you expect that property to appreciate 10% per year over the next 3 years , and you will sell it at the end of the 3 years, and you don't care about cash flow as much, then yes it's a smart investment for your strategy.

Hahaha, thanks @Corey Louton.

The property is in a class C neighborhood if I understand the how these classes are defined.  I think it will be trending more towards a class B neighborhood though, thus my interest in purchasing.

Yes, the properties are vacant. I guess since covid they haven't been using them for their employees.

No property disclosure.

The empty lot provides no value to me at this time.  Maybe some future value, but not right now.  I would buy if it has to be sold as a package.

Rehab budget is estimate per house.

Neighborhood is really good. It is a desirable location.

I can buy the properties cash, then do a cash-out refi on one of them to do the rehab.  The refi both once rehab is finished.

These properties can rent for $1,000 - $1200 each. Thus my reason for needing to buy them at a lower price.  If I'm all in above $100k, then I'm not going to cash flow at all.  I can live with minimal cash flow with no money in the property, but I own it.

I agree, the properties do seem to have been taken care of, but I don't know how well because I can't see them.

Thanks Dan, really insightful info. To your point, if $40k seems low then I really don't need to purchase at $80k and significantly go over that $40k mark. Another caveat in this deal is not really knowing the ARV. I couldn't find any credible comps in the area, so like you said what would my refi look like? If I'm all-in at $120-135k, then my ARV would need to be around $170-180k in order for me to get back most of my money. The max I would want to leave in the property is $20,000.

I agree that the deal is solid from a cash flow perspective. My primary problem is leaving roughly $36k in the deal even if I do a BRRRR. You make a good point about maybe waiting on the HVAC.

The $700 rent is in it's current condition.  I was able to find one other MF property that had been renovated recently and they are asking $825 per side. It was originally listed higher, maybe $900 or $850, but the owner has dropped the price.  

Hello BP,

This deal is for 2 SF homes and 1 empty lot. Both units were built in 1970, 3BR 1BA, 1350 sq ft each, are 4 side brick, have a car port each and both sit on about .2 acres.

Both houses are owned by a corporation and used to be used for housing. I walked around the outside of them and everything seems to look pretty good. Both of the roofs are good and one house has a newer looking AC unit, the other one looks quite old.

The properties aren't listed yet. I got in touch with the person who is in charge of selling the units and they said that they had just started working with a realtor recently, but are not under any contractual obligation to list them with him. The realtor told the company that he suggests an asking price of $98,500 for each house and $18,000 for the empty lot. They want to sell as a package deal for $215,000.

Here is a catch. The company won't let me go look inside of the properties. The lady I talked to said that there is one person at the company interested, but he made a low offer. Also, she feels like if she allows me to go inside then she needs to get the realtor involved. I told her that she's not contractually obligated to list with him, but she feels morally obligated that if she let me look inside the homes then she needs to get him involved. Of course they'll be hit with the 6% realtor fee as I would get a realtor too in that case. I was asked to send an offer via email. This is a bit weird to me, but okay....whatever.

• The homes are on a good street and quiet neighborhood.
• Roofs look good
• Windows are older
• Houses look structurally sound
• The homes are like "twin properties". They were architecturally designed to face each other and have a common place in between them.
• The lot for sale is small and I wouldn't do anything with it.

Estimates

• Asking Price = $98,500
• Rehab = $30,000
• ARV = $150k - $165k based on recent sales and rehab budget

I'm not sure what to offer on these properties. I would love to BRRRR them. Plus it's hard to make an offer if you haven't even seen the inside.

What should I offer? How should I approach this?

Hello BP,

I could use some help on determining what to offer for this duplex. I don't know if there is a rule of thumb for what to offer, I think I read in a post that an investment offer should be 30% off ARV - repairs. Below is the potential deal. My primary strategy is to BRRRR.

DUPLEX Analysis

This is a duplex built in 1953. It is 4 side brick, 2BR 1BA on each side. 1450 total square feet.

• Asking Price = $80,000
• ARV = $120,000 - $150,000?
  • It's hard to determine because there aren't many renovated duplexes in the area that have sold within a 1-2 mile radius in the past 12 months.
• Est. Repairs = $40,000
  • New Roof
  • HVAC - Currently has window AC units
  • Remodel kitchen & BA
  • Possibly new windows
  • Flooring
  • Washer & Dryer connection are in the kitchen, so I need to figure out what to do with that.
  • Owner says that there are no problems with plumbing and electrical, but it's an old property

• Recent Rents = $700 per side ($1400 per month)

My analysis per the BP BRRRR calculator says that I would still cash flow (see image below). I did not account for many expenses other than vacancy as I would be doing a lot of rehab and manage the property myself. The primary problem is that I would leave almost $36,000 in the property if I tried to BRRRR, which isn't a good BRRRR. My lender will only do 70% LTV cash out refi on MF properties and that is based on the lower of the appraised value or the total investment costs.

If I was to change my strategy to just buy and hold, make minimal repairs and keep renting the deal may look better. But the property could be a headache as I didn't do a lot of repairs.

Link to Analysis Image: DUPLEX analysis

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Background Info

I have spent the vast majority of 2020 reading REI books, attending webinars, watching REI YouTube videos, reading on the forum and have talked to other investors. All leading up to me knowing enough to learn my market, find deals, make offers, close the deal and follow whatever strategy was determined for that property.

I started driving for dollars a few weeks ago (even got Deal Machine) and I have now made contact with 2 owners. I like the properties, the city is investing in the area as sidewalks, lighting and new pavement are being put on the main street. The hard part for me now is, what do I offer?? I am so anxious to close my first deal. I don't want to be stuck in analysis paralysis, but I don't want to make a bad decision because I'm anxious to close my first deal. I keep hearing @Brandon Turner 's voice saying you just have to do your 1st deal.