All Forum Posts by: Tchaka Owen

Quote from @Evan Polaski:

For reference on the last point, I bought a property in 2012 for $20k, 15k to get rent ready, 850/mo starting out. All was great.  Raised rents a few times to $1030/mo.  Tenant moved out last fall, had to put in $90k full gut rehab.  Some of this was voluntary, and am getting $1800/mo now with no deferred maintenance, NOW.  But that renovation took literally every dollar of GROSS RENT I had made over the last 10 years, not including the roof from a few years ago, water heaters, turnover expense, repairs, appliance replacements, insurance, etc.

But what is the ARV? That's the missing part of this equation.

Quote from @Judy Sprinkle:

so if I understand correctly Satellite is no but the other towns are good if they are east of A1A? I live in San Diego so am unfamiliar with the laws there.Do you have a good realtor who is experienced in the STR market? We just bought a STR on the Panhandle & had a great realtor!

 I believe Kerry's referring to Satellite. Remember that about 25% of Satellite Beach is unincorporated (the northern part) and you are allowed to do STRs there. If you go north, there's some question about it. Ie, Cape Canaveral has a 7-day minimum unless you've been grandfathered in....but I have yet to find out who is grandfathered in. 

@Anthony W. - nothing wrong with condos (though some investors are biased against them) and nothing wrong with it not gaining tons in value as long as rents cover expenses and put money in your pocket. Here's my concern: more often than not, cash flow calculation does not factor in vacancy, repairs, capex, etc, etc. 
Is your $200-300/mo cashflow AFTER those have been factored in? If so, toss up....mainly because you might find something better in AZ. Then again, some parts of AZ are way more expensive than Indy. On the other hand, if you did not factor those expenses, dump it.

Good luck!

If you rely on Zillow, you will be a sad person one day. I almost NEVER go to that site anymore.

There are much better ways to get involved. Have you joined your local REIA? Have you reached out to wholesalers in your area? Do you have a trusted real estate agent you work with? Have you spoken with a few HMLs and have them on standy?

It's just a business. If anything, probably highly regulated and will likely have a consistent client base so risk of default should be low. Not sure about the insurance aspect. Not sure why it would be any different than any other retail.

Quote from @Ralph Ace:

Many homes that I show. I get a message from listing agent saying to submit best and final by certain time.

My question is that in deed true or just a pressure to buy tactic?

The last few years it wasn't uncommon to get a request for "best and final", however that's not the case in my area anymore. It's such a hot sellers market that buyers are going way over each other to win and that sellers are selecting from offers received. Basically, the offer you make better be the best because there won't be a round two.
 

Quote from @Adam Walter:

Using your rent which I'm assuming is market rent, I have a NOI of $12,235 for a CAP Rate of 5.19% Cash flow is $2394 for a 3.36% Cash on cash return

Your cashflow seems to be too high. 

Several suggestions:

1. Change Property Mgmt to 10%. If you every find a place charging less than 8%, avoid it. Also, at 10% you're looking at $2520, not $3820.

2. 5% is the absolute minimum for Maintenance. Unless it's in great shape and you don't anticipate anything, adjust to at least 7%

3. This chart is missing Capital Expenditures. CapEx should be similar to Maintenance; put that at 7% as well.

My figures result in $1560.1 of positive cashflow (Operating Income). That comes to $65/door. Are you happy with that? The general BP rule is no less than $100/door and some won't go below $150/door.   

Emerson Heights isn't the issue (it's neither spectacular nor bad). Here's the problem:

Purchase Price: $115K, Rehab Estimate from Contractor: $60K, ARV: $210K, Rent: $1200

At what point in your research leading up to purchase did these numbers make sense? @Aaron Signer suggested you'll walk away with $10k on a flip; that's IF your numbers are correct. One slip and you're making ZERO. Renting at $1200 after you've put in $175k? And that's not including closing costs. Terrible numbers.

You're not in SF so you need to get your numbers out of your head (I have a number of friends in the area and am aware of your numbers) and remember that this is the Midwest.....totally different set of numbers. Cashflow is a given. If you're not getting cashflow, go to the next. Indy has been one of the hottest markets for OOS investors, many from CA and many of you are being taken to the cleaners. Deals in Indy do exist, but be patient and walk if the numbers don't work. Because there will be another deal before long.

Quote from @Krystn Hill:

Hi Jared - are you still flipping properties in Brevard County??  I just saw your story on how you flipped the condo beachside in google.  I live in Merritt Island, and am a newbie with Bigger Pockets.  Wondered if you could recommend a contractor?  

Hi Krystn,
I've been slowly collecting names of people for different jobs. I don't have a contractor, but my list does have a few people. What job(s) do you seek?