All Forum Posts by: Steven Barr

Are you allowed to fire property management mid-lease?

Or does this have financial repercussions given that they placed the tenant and you signed their contract?

Would it be possible to get a business line of credit from a bank for, say $200,000, and use this line of credit to purchase and rehab a single family home?

Thanks BP!

From my understanding, there are banks that will provide "in-house mortgages" that will offer rehab loans. These loans will roll the costs of the rehab into the loan, allowing you to cover the entire cost of the rehab through the loan, with a down payment based on the full amount. 

**I am not referring to hard money, as I know they offer this type of financing as well

Also, not sure if this matters for reference, but I am based out of Atlanta

Thanks BP!

@Jason Bott I imagine you can’t use hard money to buy fire damage properties then? As they would want insurance coverage

What do y’all think about flipping properties that have a sizeable amount of fire damage?

Are there too many unknowns? Does it require pulling permits?

Thanks!

@Marcus Auerbach what do you mean by 45% expenses don’t make sense? Are you saying that’s estimating too much? Or it’s a bad property if it’s that expensive

my breakdown of 45% is as follows:

Property mgmt: 14% or roughly $350/mo (assuming 10% of monthly rents and a fee of 1 months rent for placement with tenant staying for 2 years…. So 250 for monthly rents plus 100 for 2500 placement fee spread out over 24 month period)

Turn cost: 3% or roughly $75-85/mo assuming $2k of repairs necessary to turn it 

Vacancy: 4% or roughly $100/mo assuming 1 month to locate and place tenant in 24 month term 

Insurance: 4% or roughly $100/mo (using one of my properties as example here)

Property taxes: 9% or $225/mo (using on of my properties as examples)

Capital expenditures: 3% or $75/mo (amortizating roofs, hvac, water heater, etc… over their useful lifespan)

Operational expenses: 10% or $250/mo

So technically 46% in total. Somewhere between $1100-1200/mo roughly is the estimate

@Sam McCormack can you provide an example of a creatively financed deal and how it would provide better cashflow than 20% conventional?

@Eliott Elias do you mind sharing your numbers?

(I also just realized I pressed wrong number on my calculator for expenses. Should have been $1125. So my example is actually more break even. Still not great and no cashflow)