All Forum Posts by: Tchaka Owen

@Wes Barnes - ROI is calculated as a percentage. What I gave wasn't ROI, it was net profit. Here's how I got to that number: $65k x 0.92 (6% commissions + 2% closing costs), subtract $35k (renovations) and another $6k (pp) which leaves $18.8k. I rounded down a sliver though the reality is you'll probably have higher holding costs.

Derrick's suggestion is key because while I would not do this deal as a flip, I'd give it serious consideration as a BRRRR. If it's a decent area and you have a university nearby, you'll have students pay off the home in a hurry.

@Wes Barnes - while I too use @Trent Stone's formula (it's a critical one), I add one more thing: profit must at least match renovation costs. That's a way to reduce risk and in this case the 2nd criteria is not met. Ie, I will not spend $35k to make $18k. That doesn't mean you shouldn't do the deal, rather it wouldn't meet my criteria. Good luck!  

@Melvin Galloway - I'm not quite seeing your net on the AS-IS sale. How did you get $300k net? Or did you mean $300k EACH? I'm seeing a net in the very high $600s.

@Matt DeBoth - how are you able to get 100% bank financing on all your multi-unit purchases?

@Rita Rosa G. - 

"NOTE: She mentioned that her job gives her unlimited hours with a lawyer over tenant-landlord disputes but they don't want to have that type of relationship"

Take heed of this. IMO, it is a VERY clear indicator that you do not renew their lease. If accurate, they're ready for battle and aren't worried about costs. Are you able and willing to go toe to toe?

@Caymian Gordon - the numbers seem pretty decent; I'd make the following tweaks:

1. Raise CapEx to 7%, not so much that this is critical but because you have repairs at 5% (likely due to the place being renovated). With vacancy also at 5%, you run the risk of not putting enough aside.

2. Is the property in FL? If so, insurance is fine. If it's in AZ, drop that in half. You shouldn't be out $1800/year in AZ.

3. Are property taxes that low? Seems extremely modest for a $220k home.

Hope this helps.

@Ryan Nolan

@Ryan Nolan

@Ryan Nolan

@Ryan Nolan

@Stephanie Sicard - one option available to you is to buy a duplex or triplex and live in one unit, that way you can get preferred financing. The effect of Gulfstream is that SW Hallandale (ie, west of US 1, South of Hallandale Beach Blvd) has been improving. It's spreading past Hallandale HS too. NW isn't as desirable but even that is slowly changing. If you don't want to do any of that, then yes, you have to look beyond S. Florida. 

That's a big part of why I'm now in Brevard County. :-)

If you don't get conventional financing, go to a non-QM lender. There are a bunch of them. Your rate may be 6-7%, which while not 5% is better than 10%+. Note: BRRRR is always an option as long as you have sufficient equity and positive cash flow.

@Leah C. - what @Jason Albasha wrote. 

Additionally, I do believe that if you do not give proper notice a tenant can stay longer (ie, it has to be done correctly). However, that does not give the tenant the right to stay for free. If you're not getting rent you need to start the eviction process TODAY. Good luck.