All Forum Posts by: Mike Morrell

Hey Jim, I'm also from PA, and currently living and working as a real estate broker in SC. I can tell you that the SC tax laws can be a bit tough for a buy and hold investor - the property taxes are significantly higher for investment properties. The good thing is, it's a level playing field, so rental prices are inflated accordingly. I'd be glad to help if you have any specific questions.

Mike

Thanks Michael - current renter is moving out tomorrow. The offer was at 70k - 15k down - financing 55k. So getting $450/month (at 50%) at new rent to cover $262. I'm pretty confident in the new rent amount.

Agreed that it's not the best deal though. Wish I could find one of those free houses that the guru's talk about! Maybe he'll take the 55k offer rather than holding financing - in which case I'll just have to scramble a bit to come up with the other 40k....but it would certainly make the numbers work a whole lot better.

Mark - you're right, I was low. Not sure what I was figuring here, but I had it right on my other worksheet. Offer was at 70k, so financing 55k - $262/month $3156/year.

Well - I made the offer, should hear back tomorrow. I offered:

70k sales price - 15k down - seller to hold note - 4% amortized over 30 years with a 5 year balloon.

OR

55k sales price

I was able to really check the home out today - and it turns out it's in much better shape than I thought. Doesn't need paint except in the soffit and facia - siding is aluminum, interior paint is good. Flooring is all either rolled vinyl or vinyl tiles - and relatively new. I'm definitely coming out of pocket for a fridge and stove - and I'll certainly be spending 4k on HVAC within a couple of years - but that's the big stuff. Pending a home inspection of course.

Anything last minute hints as I draw closer to getting this thing on paper?

Great stuff, Daniel, Thank you for taking the time!

Repairs will be out of pocket, and the mortgage rate will be at 4%. You're probably right on target with the 20k number - though the only exterior paint needed is the soffit and fascia - the rest is aluminum siding and a brick foundation and front porch.

Pro - great area with big upside - great schools

Con - price? Not sure if the deal makes sense.

1950 2 bedroom 1 bath - 1000sf in an older neighborhood, surrounded by like homes, but all well maintained.

Asking 80k

Currently has a long term renter in there at $650/month - but it should be rented for $800-$900 based on comps - long waiting list for rentals in the area because of schools.

Not a lot of investors in the area because it's SC and they're rough on investment property taxes - 3x primary residence. In this case - $1100/year. Only 5 miles from NC where the property taxes would be 1/2 that.

Home needs paint, carpets, kitchen appliances. Will need HVAC within the next couple of years.

It's being sold by a real estate investor who is now in his 70's and just looking to get out. Will likely purchase with favorable terms, he'll be holding the note, 15k down.

So - I've got potential rental income at $9600/year - with taxes, insurance, vacancy - that should put me at about $7000/year. less debt service of $2400/year.

= $4600/year

Less Maintenance at 35% of rent - $3360/year

Bottom line - cash flowing $1240/year?

So - with a $15,000 initial outlay - I'm at an 8% ROI?

What am I missing - does this make sense? If not, how would I have to structure it to make sense? Thanks for your help!

Thanks guys, glad to be here!

Hey all! I've been in real estate (new home sales) for about 8 years, and done some speculating in the crazy FL market in '05-'07 and had some big wins, and than lost VERY BIG. I'm finally recovered enough to start looking into real estate investing again and I'm trying to do it the right way this time - with defined goals and a clearer focus. I'd love to hear from anyone in the Charlotte market that has any advice or opinions that they'd like to share. Thanks for looking!