All Forum Posts by: Joseph L.

Thanks for all the advice. I have seen two of the units which were just signed/renewed a couple months ago for $1250 each and they are really nice. He is going to do a walk through of my place today and give me advice of what he did and also the cost. He hired contractors to do all his work but because I will be living/fixing it I can do most the work myself with your guys help and google.

One thing: downstairs there is living,dinning. 1 bedroom and hallways with 1 certain tile. In another bedroom there is ugly *** carpet that needs to go. Upstairs there is carpet that also needs to go. But I dont think I can find that tile to put in the bedroom downstairs. I want to lay laminate wood flooring upstairs thought. But I'm kind of confused on the bottom cause everything is different.
Options would be
1. Replace all floors(living,dining,hallway,2bedrooms)with 1 uniform tile. (too expensive probably)
2. Have laminte floors in upstairs and 1 bedroom down stairs.
3. Put carpet in that 1 bedroom downstairs?

Any thoughts?

Hey guys sorry it's been a while been busy.

I am sorry I forgot to clarify in my original post but I am currently going to live there and the renters moved out. I plan to live there about 6-8months while I save for my next place and fix it up. Currently I could get 950 a month for not doing any major changes. The difference between a remodeled place is ~300 a month. I am looking at spending around 8K in remodeling as I would be doing just about all the labor myself.

Hey guys,
Just purchased my first Condo property and wanted to get some thoughts about putting money in and upgrading.
Currently the unit is rented for $900 and they know this is under under market value so they are willing to go up to $950-$1000.  Lets say $950 to be safe. The unit is in fine working condition and does not need anything new, but the problem being it has not been updated since it was boughtand looks like its 1979 when you walk in there.  Another investor in the area with the same 2 units is renting out for $1250 each but they have been remodeled.
Main things that need get remolded are 
1. patio deck needs new roof and floor boards.  size is 8x8 was quoted $600 for roof and thought I could just go buy wood at lowes and do floor myself and apply finish/coating.
2. Carpet in upper level master suite is old and blue.  Around $400 sqft including open loft and halway and stairs.  Was thiniking of replacing with carpet or with fake wood floors, would install myself but haven't checked around prices. - I am assuming that normally carpeted stairs are wood underneath?  Can this just be painted to match hallway to look nice if I decide to go with laminiate wood or carpet?
3. Carpet in anothe bedroom downstairs is also blue around 10x12 room.  Will replace with same as above(carpet or fake wood), don't know if thats tacky/wise to do.
Now things that could use updating
1. the cabinets and counter top kitchen and two bathrooms (good workign condition but is it better to buy used/new or can they be refinished/painted?)
2. Tile throught bottom floor in dinning room/living room guess I could upgrade to carpet/wood but they don't seem too bad looking they are the big size tile's like foot long.
3. Loft in upper level could be extended out to create additional 6x8 space was quoted $600 for basic floor and railing and to add 1 outlet.
4. Can screen in patio as my friend might give me his hot tub and this is florida so  lots of bugs, also previous owner loved plants/trees so very jungle looking in backyard this will be cleaned up by me.
So basically my question is to raise rents by ~$250-300 which I know is possible in this area how much would you be willing to put in a place to achieve this? If I can get $300 more a month it would be worth it to put in $3-5K with just about all of it going towards supplies and not labor?  Do you think this is possible, I would do all the work I can and my gf's dad is a contractor so he would help me with the hard stuff. 
 Also what type of payback period do you guys look for in a place? I am looking around 5.9yrs for my payback = Total inital investment if I make no changes at all to the place, 75% in financed.

@Lynn M.
The bank actually offers to pay up to $5K of CC, but the loan has to be at least $50K, while my purcahse price alone is below this. So in future deals where the property is worth more this won't be a problem.

I believe I am leaning towards the cash is king theory the people above say. Hopefully the market will be good to me and I can make the CC back in less than 6 months.

Seller won't pay for my closing cost(fees for loans,title)

Bank won't do any lower than 25% down for a condo. Found a broker that will do 20% but I would be paying more on CC so the total would be same as putting down 25% with the bank.

Been averaging like $2-3K every 4 months in day trading so probably could make more than the closing cost will be.

Hello,

Looking for some insight/thoughts, I am buying a 45K condo and was going to go with OO mortgage 25%down 3.875% interest and prob $3-3.5K in closing cost.

Would you rather do that or pay cash for it and then get a HELOC to get the money back. My bank says they will do a 75% 4.5% interest 20yr. heloc against recent comps. Recent comps have been REO's around 45-50K. I would have to wait 6months to do a HELOC and the bank pays the closing cost up to $400 for it.

Would it be worth to pay cash in order to save on the closing cost. Currently have the money in the bank and occasionly day trade with it.

Appreciate the responses as I just got a copy of the budget and YE financials over the weekend. I beleive the reason for the high HOA is because theres only 46 units utilities and misc repairs are 26% and 26% going to insurance for liability/property and 14% going to the replacement Reserves. All %'s are derived from total yearly income.

Fence and pool were just recently redone with Paving due next year and Roof in 13 years and painting in 4 more years. Budgeted Bad Dept exp is only for 2 units so I believe everyone is paying there fees which is why they decided to lower it but when I get the condo questionaire back it will give more information about people paying.

I think I will pull the trigger as the ROI of 22% seems attainable based on the current condition of the unit.

I am in Florida so I am not sure how much insurance is going to cost but I don't believe it should be much more than $300 as I am not in a flood zone and it only has to cover the inside of the unit. Is this a reasonable estimate?

thanks for the responses guys,

Joe

Hey guys bout to close on my first deal and just wanted to hear some peoples viewpoints.

Purchase price - $45K Condo 3/2.
Cash outlay - 20-25% down with $3K CC/fees - ~$14.250 out of pocket
Revenue - Currently rented at $1000 a month(other rentals around 1100-1200)
Expenses Yearly
HOA Fees - $4176 (includes structure insurance, water,sewer,trash,basic cable)
Taxes - $850
Insurance - $300?(Since I only need to insure the inside of the property? Don't know if this is reasonable or not)
Repairs/Maintenance - $1600(nothing needs to be replaced/fixed right now all appliances water heater/ac in good condition. Need to budget more?)

Total Revenue - $12,100 (1100x12-1100)
Total OP Expenses - ($6826)
Less Debt Service - ($2,000)
CF Before Taxes/Dep-$3174 - $265.5/month

CF / Initial Investment - #3,174/$14,250 = %22.27%

I will be buying as an OO cause I need a place to live for now while I look for a house to buy. So I won't move out till I can rent it out later down the line.

Have you guys who own condos would you reccommend to do this deal or to look for a SFH instead? I was worried about the high HOA but I guess I dont have to worry about replacing the roof, sinkholes or termites or anything like that because thats covered and my agent who owns 2 properties in the place says hes rented 1st day listed and they like that some expenses were included already. I am currently waiting on the HOA to furnish financials and a condo questionaire for my lender but if they approve the loan I shouldnt have to worry about any large assessments in the future coming my way which scares me the most probably? Also they just lowered theres HoA fee by $30 this year which I assume is a good sign.

Appreicate any type of feedback that can help.

Joe

I'm meeting with my agent today. I will ask that any commissions made be added to the partnerships profit and divided out since I do believe splitting profits/losses based on our equity contribution is the easiest way to determine a fair split and that we shouldnt get "paid" unless we actually make money.

Thanks for the reply's, I just presented a rough outline of our thoughts.

The agent didn't say he didnt want to put in his profits but he has only done the buy/sell of the property but has not put up any capital so he said he wasn't sure if he should get the commission from buying the property. I would want him to included all his commissions with the profits because I would not be taking a daily "fee" for managaging/doing any work.

The contractor would be responsible for doing all work he has worked with other investors in rehabbing houses so he knows what permits we need and would schedule any subs and get bids if we need. We are not looking for any project that would require us to really get any subs as he can do most jobs. I wasn't sure how we would come to an agreement on the contractors fees as he said he would be willing to do the work for much cheaper than his normal fee but I like your idea Jon and will bring that up.

By Capital I mean all of it upfront - Buy the house cash, pay for any closing cost/holding cost, and for the rehab portion (labor,materials,permits,fees ect) as well. We would be paying cash for the property and putting into an LLC with a JV agreement that will outline intinal investment amounts Profit/Loss split and also if we need more money a Capital call clause.

We are looking to get into a small size job nothing that requires the whole house to be gutted or anything. I wouldn't be risking all my money I have saved but a good portion and I work full time so I have my salary coming in.

Appreicate the feedback and constructive criticism. as I might have missed something I should dicuss with them and you guys can catch it quickly.