All Forum Posts by: Bram Spiero

Has he tried talking to the landlord and getting cold shouldered? 

Can he suggest finding an alternative tenant?

Do the other tenants have a buddy looking to rent a room?

As a flipper, you want a run down house in a desirable neighborhood that you can buy at enough of a discount so that when you add the cost of rehab you can still sell slightly under market value and make money.

Hi Hanan,

You're not wrong that there is a connection between the rent ratio and the class of property. In fact, it's been a while now that the 2% rule has turned into the 1% rule. In any event, it's a rule of thumb to allow you to decide quickly if a property is worth investigating as a potential investment.

Vacancy rates do not influence the rent ratio, nor do repairs or capital expenses.

There is another rule of thumb called the 50% rule, also used for quick and dirty analysis, that states that you should assume that half of your rent should go to expenses.

Even if a house does not seem to have issues requiring repairs and is in an area where there are no vacancies, assuming that both of these will occur during your analysis will ensure you cashflow rather than having to reach into your pocket to cover repairs or a mortgage payment.

Good luck!

Only with a-typical. Most people are lazy and greedy. When they zig, you zag.

Get a bank to approve you for a mortgage, use that as proof of funds to get the deal under contract and then finance through hard money rather than the bank including funding for the rehab.

Try talking to small local banks who keep their mortgages on their books.

Be sure to take @Joshua Dorkin with you, he seems to have a thing with the place.

;-)

Pick a target market. Get on the MLS or Zillow. Analyze every single house in that market, then do that again.

This will help you identify typical houses, prices, rent ratios, tax rates for different parts of town.

It will also help you to understand if a market you thought would be of interest is in fact relevant for you.

Now that you know what is typical in your market, keep on monitoring and start noticing the things that are a-typical, That's where all the interesting stuff happens.

If the deal doesn't work, walk away. You're not buying a house, you're buying a vehicle to make money.

Sounds like the lady would be better off selling to someone that's going to live there rather than someone that's going to flip.

Unless she's in a bind and needs the money, in which case what you think you are able to afford can solve her need for cash.

Are you going to invest time and money taking this guy to court?

If not, just let it go.