All Forum Posts by: Tom C

Can you explain how you were going to do this? I am curious as to how you could pull enough money out to live on, don't reinvest and still cash flow? My goal is to obtain enough properties, that each one cash flows enough to pay a mort payment, covers business expenses and then still provides a little per house to pay me a salary.

Yes, buy, rehab and hold. I do most of my own work. I have a plumber to come in and replace the stolen copper with PEX, mainly for the sake of speed. The wife won't start her part without running water. I will usually pick out 3 or 4 things that I don't want to do, such as scrape and paint the basement walls and give those to a kid that works cheap.

I still have my full time job as a programmer. It can be very difficult being on call 24/7 and trying to run a property investment business. I am lucky to have a wife who works nights and can meet with city officials during the day for rental inspections and stuff like that. She's is much better at dealing with those scum suckers anyway.

I have a vacant home right next to my current project house. There is a lock box on the front door and my agent even took me in the house. I did some research on the house and found out, that it is still in the owners name and it is not listed through any one. I spoke to the current owner and she said that she is trying to work out an agreement with her bank and she had no idea who put the lock box on her house.

Sure sounds like another agent scam to me.. I think they saw that the house was vacant and decided to change the lock and put their box on it. Mean while this poor lady still has all her belongings in the house and is still responsible for it.. All while strangers are being let in her home.

mouschi

Are you talking about, pulling the equity out through a loan or just selling the property? If you mean by refinancing after rehab and holding the property, you have to remember that if you are holding that home, then you have a monthly mort payment, including all of the other holding cost. Living off this money would be very foolish. I cash out some of the equity after a rehab, I never cash out more then 60% of LTV. Then I dump that money right back into another purchase. The money is used strictly for the business. By purchasing another home, this allows me to now have another monthly cash flowing property.

If my new PITI is $300 per month now on the property that I cashed out 25K, and I am getting $600 a month in rents from it, I want to get my next property that I have 20K into rented as quickly as possible, to offset that $300 per month that I am paying toward that new mort. By playing this game, I am taking the risk while I am rehabbing the new property, that no major expenses will come up with the old property that will put me in the red for that month.

If you are talking about flipping a property, then sure you will live off part of that income while using the profit for another purchase. As long as you can do both comfortably, then you have just created yourself a job that you love.

Thanks guys.. I was able to put a brace on and work through it. The pain is gone and I am even back in the gym now doing squats.

Heather,

Great post and a lot of good advice. As far as tithing goes, that is up to you and I certainly would not feel bad about not being able to give right now. As MikeOh always says on this board. There are 24 hrs in a day, you only need a few of them to sleep. With the kids being out of school right now, you may have to work on your rehab during the night, while the husband is at home taking care of the kids.

Also, if the husband is not going to help you get out of this whole and jump on board with you, then get rid of him.

When I was a cop, we had field workers passing through our area from time to time, more then once we stopped them for a traffic offense only to find out that they were not able to produce any type of paperwork to show they were here legally. Most of the time they didn't even have any type of drivers lic.

Whenever we contacted Border Control we were always told to let them go, because they had no one in the area to pick them up. So we would charge them and send them packing on foot. Of course, they never showed for their court date or paid their fines. Our dept would seize the vehicle and then sell it at an auction.

As far as renting to them. I'd make sure I would find other reasons not to rent them to avoid any discrimination issues.

To answer your question about the MLS. All of my deals have been on the MLS. There are different tactics you can use. If I see an excellent deal come on line, I get in to see it right away, but this requires a very good agent who is willing to drop what they are doing and meet with you.

The other route I take is to watch a home online for sometimes months, if I am interested. By this point I already have a price in mind As soon as I see two price drops within weeks of each, I then will go in, inspect and then make an offer.

In either case, do your research before wasting your time going to look at the place. Have a number in mind before you even walk in the door, then add your rehab cost to it and be ready to make the offer then if the numbers add up.

Recently I have lost 2 great deals, because I didn't make an offer on the spot and the other was because my agent was at a family function over the weekend and didn't have a freaking backup. We are still going to have a conversation over that last one and my loyalty.

Holly,

I would look at this property this way. Don't over complicate it with trying to figure out what your future expenses are going to be, other then what you know now.

Initial investment 26,000
Closing Cost 1,500
Paint 4,000

Total known investment 31,500 Payment 30 yrs 6.5 % = 200 per month.

This is could be a good deal in your area. My fear is that your rehab expense could include much more then just a simple paint job, which is going to raise your total investment. I would not use the current owners numbers, other then what he is getting in rents now. Taxes, Insurance and who pays utilities could make this a loser real fast.

Also, how much equity will you have at purchase and then after the paint job?

Looking good.. 5K in plumbing?! Wow..Why so high?

I learned another valuable lesson on my current rehab that I will share.

When I bought the place, the copper was stolen, no big deal. Now the basement has a finished ceiling which means that I couldn't see the plumbing, but I assumed and most of these older homes have copper at the hot water heater, then it turns to black pipe and then back to copper to the fixtures. Not this place. It had very little copper and the rest is black pipe at the way to the fixtures.

The home has been vacant for 2 years and when the bank comes in, they blow the lines free of water and then add antifreeze to the toilets. So when it was time to turn the water on in this place, all of that built up dirt inside the black pipe fell lose and clogged up every shut off valve in the house. I pulled every shut off valve, installed new ones, turn the water back on, only to find out the lines running to the faucets were completely plugged.

After installing new flex lines, then I found that all my faucets, shower heads and toilet guts were clogged. I replaced all the faucets and stuff, only to have several more piece of dirt reclog the shut offs and faucets. Luckily I was able to just blow them out and reuse them. I spent 5 days working on the lines to get the water running freely again to everything. Next time I know to pull all the shutoff's and just let the lines bleed out into a bucket.

So on top of all this, then I found a 4' crack in the cast iron sewer line going to the upstairs bathroom and it just happened to be located behind my kitchen cabinets and sink.

Just something to keep in mind when you are rehabbing. I certainly wouldn't want to even think about paying a plumber to do all these fixes.