All Forum Posts by: Mohammed Elzagha

My opinion is if a property is truly turnkey, why are they only being sold to investors? A seller wouldn’t want to limit their buying pool unless they had something to hide. They want fast cash closes to avoid honest appraisals and inspections. You would be better off finding homes on the mls and hiring property managers to run them.

@Risha Walden I recently did a HELOC with Wells Fargo on an investment property. They will loan 60% ltv and the banker said typical HELOCs are 0.75 over prime. I havent closed on this loan yet, but he said it would be a slightly higher rate. Also Wells Fargo pays the closing cost. The only fee they charge is $75/year if you don’t carry a balance. I see this as an option to have access to quick cash for a flip, but without the obligation of paying a mortgage in between flips.

Originally posted by @Michael Plante:

Originally posted by @Mohammed Elzagha:

@Sam Grooms I bought all of my appliances from Lowe’s.

$550 for fridge with ice maker at lowes

Please link us

Thanks 

 https://m.lowes.com/pl/Whirlpool-Stainless-steel--Top-freezer-refrigerators-Refrigerators-Appliances/4294789497?refinement=4294796421,4294965476

My lowe’s was advertising free ice makers with purchase on Labor Day. I’m not sure if the deal is still going on.

@Sam Grooms I bought all of my appliances from Lowe’s.

I agree with the previous posts, the tariffs brought an almost immediate increase in appliance prices, but from what I've seen it mainly affected the higher end products. I saw very moderate changes on the lower priced appliances. I do not buy in bulk, but do wait for sales. 6 months ago I replaced the appliances in a unit and bought all Whirlpool Stainless.

I paid about:

$500 Fridge w/ ice maker

$500 Oven/Range 

$200 Microwave

$300 Dishwasher

So, $1500 total.

Recently for Labor Day I purchased the same appliances and paid:

$550 Fridge

$600 Oven/Range

$220 Microwave

$300 Dishwasher

So $1670 total. Most of the increase came to the oven/range.

I’ve bought several houses sight unseen. The worst case scenario is the most likely scenario. That being said, I’ve made my biggest profits off these houses. Like you, I got them at a big discount because the risk was higher.

Cash for keys is your best bet. The tenants are probably the reason the landlord got foreclosed on, so getting rid of them is ideal. They’ll give you every excuse in the book to try to buy themselves more time. I usually start at 1k and work my way up to $5k depending on the house. Or you can ask them for their number and work your way to that range. Your max will be lawyers cost plus a couple months lost rent.

Be cautious of anything they tell you. Like I said, they’ll say anything to buy themselves time and the longer it takes you to start the eviction, the more it’ll cost you in the end.

I think you are asking 2 separate questions.

1) How should I invest $50k of investors money?

It depends on your risk tolerance and timeframe of investment. If you want short term returns, then flipping distressed properties may be your best route. If you are looking for long term returns, then brrrr may be your best route.

2) How do I pay back my investors?

It depends on what answer you choose to the first question. For a short term flips you may negotiate a percentage of the profit, a flat fee, or an interest rate. For long term rentals, you should determine terms for a loan or an equity structure for your Investors.

You should come up with a clear plan and determine each Investors expectations before taking any money.

I have been living in and investing in the Huntsville area for the past 10 years. I focus my investments in the areas of Madison and Harvest. High cap rates, great demand, and great schools. If anyone wants to network or get insight into projects I’m working on feel free to email or text. I balance my portfolio between foreclosure flips and long term rentals.