All Forum Posts by: NA Jones

We have several checking and savings accounts.  There's automatic transfers set up on paydays.  A portion of next months bills gets automatically transferred into a checking account so that we can pay all the bills in advance in one fell swoop at the end of each month.  Also, each payday, a predetermined amount of money gets transferred into savings.  We don't carry cards for either of these accounts.  We then use whatever is left over for day to day spending.  It works for us :)

I've also used mint.  It aint bad :)

Anyone else reading this type @Andy just to see who pops up?

No? 

Just me?

Alrighty then :)

It's been my experience that commission is usually one months rent.. split between the two.  Or a set fee of $500 to whatever...

Did no one read the part about the OP talking about it being a cash purchase?

From what I can tell (not based on experience, just observation and education) the commission on a <30k purchase will vary by the property and the agreement made between the seller and the listing agent. That information is available to agents privately on MLS. I've searched alot of homes on MLS in the 30-50k, and the compensation is outlined as either a percentage (usually 2.5-3% each) or a flat amount.

As the BUYER, you won't typically pay your agents commission anyway.  If you did have to pay your agents commission, you would pay them what is outlined in the buyers agent agreement you signed when they locked you down as their customer.  You can refer to that to see what you will be expected to compensate your agent in the event that the seller doesn't pay them.

That said, I'm expecting - again based on my own research - the buyers closing costs on a 30k cash purchase to be 1-2k.

@Lynn McGeein I just reread your post.  This bit stuck out to me again:  But you'd need to make your decision early on as selling requires a different focus than hardening a rental for tenants.

 I hadn't really thought of it that .  Thank you  :)

@Elisabeth Hernandez-Madrigal what happened?

@Lynn McGeein  thank you for your insights :)  I have factored in the other agents commission (I'm licensed here in MD) transfer fees, closing costs etc and while we'd hope for more, a 10-15k profit would be more than acceptable for all the effort (aka experience :P )  

What I didn't factor in was origination fees on personal loans because I was more thinking along the lines of charging the cost of materials to our personal and business credit cards, and borrowing the cash from a private investor to pay for labor.  Guess I'm wondering if it's my inexperience thinking that that's a travelable road... :)

@Lynn McGeein  and @Aaron McGinnis   I thank you for your responses :)  I very much appreciate the insight and resources.

From what I'm starting to piece together, with a house like this it's not a matter of "is there" lead but almost certainly a question of "how much "....  and the cost to become lead free (or leadsafe) is entirely dependent on the answer to that question.  

One GC we spoke with suggested costs to go lead-free  could be $3000-5000 per room...  does this sound pretty reasonable for walls covered in lead from top to bottom?

Alright trusted and respected BP family...  I apologize in advance for the length of this.  I just realized exactly how long it is.  Much appreciation for anyone who actually reads this mini-novel and has advice to offer :)

I know this is a common theme around these here parts (please, evaluate my plan!) but I'm jumping on the bandwagon because I'm hoping those with experience will be able to point out risks, downfalls, or opportunities that I'm not seeing.

Current situation in a nutshell: steady FT income, ~17% DTI, credit scores in the high 700s. Excluding reserves, we have ~30k for the acquisition of our first property.

Our immediate goal is to acquire our first property with cash... a fixer upper purchased for less than 30k.  

Rehab - With a 30k price tag, we are expecting extensive rehab. We have a good rehab team in place (we believe) and are expecting to put 40-60k rehab into the unit. Our goal is to finance the repairs using a combination of the following methods:

• HELOC - I know finding a bank to do this on an investment property will be tough, but we have good relationships with several local credit unions and little banks and I have faith we could get it done
• Personal lines of credit / loans - we currently have several lines of credit (~ 60k available at interest rates varying from 8% to 25%)
• "Borrowing from individuals" - we have several friends and family members who have expressed interest in offering us cash loans ranging from 10k-25k with interest that would be lower than a bank but a higher return than they'll get from their savings accounts

The ideal plan would be to find a bank willing to immediately offer a HELOC up to the full repairs amount and finance them all with low interest. Plan B would be to use about 20k worth of lines of credit or cash borrowed to put enough rehab work into it that it appraises for the maximum HELOC amount, then use that to finance the rest of the repairs. Plan C would be to use lines of credit and/or cash borrowed to completely do the rehab - then either sell and pay it off, or get a HELOC to "refi" essentially and pay off the higher interest lines. If there is a seasoning period for the HELOC, worst case we'd have a vacant, unrehabbed house on our hands for 6 months (taxes + ins + utilities for 6 months: ~$1000-2000 which is a cost we'd be willing to eat if it meant saving more on interest in the long run)

Exit strategies would be either sell or rent, obviously. Recent comps (same specs, same neighborhood, within the last 3 months) sold in less than 30 days for $130k and rent for $950.

If we sold, we'd likely price it around $120k for a quick sale. Maybe $130k and advertise closing costs with a full price offer (we are in a USDA eligible area and would play that to our advantage)  After paying off the financing from the rehab, we'd hope to walk away with a 15k-20k profit and rinse/repeat. If we held and let it, we'd either quickly pay down the debt (2-5 years with ~2k a month) or somehow leverage the equity to get into Deal #2.  Ideally, we'd have such a successful outcome that with our newfound experience we could use OPM for Deal #2, but we'll see ;)

So, the biggest risks as I see them stand as -

• Not much of a margin between our budgeted rehab costs and the financing available to us. A 50k rehab sounds doable, but a horrible discovery could send a 50k rehab into the land of 80k which is a very stressful place for us - if not damn near impossible to even reach. 
• Our entire strategy is dependent on either immediately or eventually (6 months) getting a HELOC (which could be a feat in and of itself) to cover the entire cost of repairs - so at best (50k line) we need the banks appraisal to come in near 70k... which could be tough if we purchase at 30k.

I have a very high tolerance for risk, and an equally high optimistic streak. (I'm the type of person who thinks putting stainless steel appliances in a rental will reduce tenant turnover) My husband has a medium to high tolerance for risk, and a more realistic (and sometimes pessimistic) point of view. (According to him, the likelihood of future tenants Breaking Bad in our units is 99%) Luckily, we share the same goals and have a track record of being able to create an awesome plan and execute said awesome plan successfully.

So BPers... thoughts? Recommendations? Opinions? Experiences?

I know my mileage may vary, but thank you @Beau Blinder for sharing your experience with me.  That's exactly the kind of information I was hoping for...

... and will continue to hope for from other BPers who have had experience "deleading" (a new search term for me to find more related posts, so thank you for that as well! :P)