All Forum Posts by: Vadim F.

interesting.. I can do cash if the property does not need rehabbing

Quote from @Bob Stevens:

Quote from @Anna Cerda:

Does anyone here have a good rental manager for several properties in Ohio. 

 I know them all. I have been buying and selling there for about 10 years, 100s and 100s and 100s of properties, happy to recommend. Do you own them yet ? 

 I have been looking. I have not found any deals as of yet but want to get things in place while I look. Know of any good deals in the market?

Quote from @Nicholas L.:

@Luka Jozic

well... include all the numbers though.

say you get 130K out.  you'll get 70-75% of that on the refi.  and you'll lose 5-8K in fees and costs on the refi closing.

and your purchase price is 66K + 35K rehab + your closing costs + your holding costs + any overruns + your staging and leasing costs.

so... it's probably closer to 20-30K left in the deal.

so you have to ask yourself if the risk is worth it.

only you can answer that.

My lender told me 4K in refi costs and closing costs shouldn't bee too much if Im buying cash. I don't have any carrying costs except like utilities which is not much. Overruns is of course a risk but I have a 5K cushion in my estimate and my GC will also give me a detailed bid tomorrow so that should be good. Im not sure what you mean by staging costs? Its not a flip so what would I be staging?

Also, if you look at 6x2 duplexes around 2000 sqft in 44102, there are plenty that sold well over 130K in way worse shape. So Im hoping I can refi at more but 130K should be pretty safe. The only thing really would be if the inspection turns up a bunch of stuff adding to the rehab budget, at which point I'll negotiate with the seller and worst case just pull out. 

Quote from @Bob Stevens:

Quote from @Luka Jozic:

I am under contract on a duplex in the 44102 area at 66K that has been cited for lead by the city. My initial idea was to buy cash, vacate the property, and do a BRRRR (the property needs a decent amount of work) and refinance asap and find my next deal. However, it seems like I have the option to do conventional and since the property has tenants in both units paying like $600/mo each, I was thinking is it better to maybe do a conventional and bump the rent to maybe $750 a month? If I do that, I can't do a cash out refinance for a year. Sure I will have more money in my pocket, but I wont have enough to buy something else cash until I save some more. Additionally, if one (or worse, both) tenants move out then I will have to put money into making it rent ready, but I won't be able to refinance for another year meaning even more of my money will be tied up. I guess one solution to that is to see if I can get them both to sign a new 1 year lease but that might be hard before I take ownership. I do know both tenants want to stay, but Im not sure how they would feel about a rent bump.

Rates right now for a cash out refi are around 6.5% with 2 points which is pretty good. I don't know what they might be in a year. Im really not sure what the best play is here as I feel like there are pros and cons with either decision. 

 STILL working way to hard, and NO you should NOT buy this property, ITS BEEN CITED FOR LEAD from the city!! RUN away 

BTW 600 is terrible, 

Why would I run away? It doesn't really seem that hard to fix. And yeah its 600 because of the current condition. The idea is to add value and raise the rents.

First, congrats on finding a duplex with some good numbers!! I have some questions to hopefully offer up better advice. :) 

1. I'm not clear how you have the cash to purchase, but with a loan, would be short on money to rehab or carry the property if needed. 

2. What are the consequences of refinancing before one year on a conventional loan? Those don't usually have prepayment penalties. 

3. Is there a possibility to house hack/live in one of the units? You could rehab the one you live in while you are rehabbing. Not fun, but very cost-effective. :)

4. What would be the "fixed up" market rents?

Quote from @Vadim F.:

Quote from @Luka Jozic:

I am under contract on a duplex in the 44102 area at 66K that has been cited for lead by the city. My initial idea was to buy cash, vacate the property, and do a BRRRR (the property needs a decent amount of work) and refinance asap and find my next deal. However, it seems like I have the option to do conventional and since the property has tenants in both units paying like $600/mo each, I was thinking is it better to maybe do a conventional and bump the rent to maybe $750 a month? If I do that, I can't do a cash out refinance for a year. Sure I will have more money in my pocket, but I wont have enough to buy something else cash until I save some more. Additionally, if one (or worse, both) tenants move out then I will have to put money into making it rent ready, but I won't be able to refinance for another year meaning even more of my money will be tied up. I guess one solution to that is to see if I can get them both to sign a new 1 year lease but that might be hard before I take ownership. I do know both tenants want to stay, but Im not sure how they would feel about a rent bump.

Rates right now for a cash out refi are around 6.5% with 2 points which is pretty good. I don't know what they might be in a year. Im really not sure what the best play is here as I feel like there are pros and cons with either decision. 

DSCR cashout refi 3mo later. But before you even get that far, how much lead remediation work is required?

Not a ton, replacing about 5 windows, scraping and painting about half of the exterior, and replacing all wood door casings. Now for the door casings I was told I can just paint them with lead enclosed paint not sure if that’s true? 

I am under contract on a duplex in the 44102 area at 66K that has been cited for lead by the city. My initial idea was to buy cash, vacate the property, and do a BRRRR (the property needs a decent amount of work) and refinance asap and find my next deal. However, it seems like I have the option to do conventional and since the property has tenants in both units paying like $600/mo each, I was thinking is it better to maybe do a conventional and bump the rent to maybe $750 a month? If I do that, I can't do a cash out refinance for a year. Sure I will have more money in my pocket, but I wont have enough to buy something else cash until I save some more. Additionally, if one (or worse, both) tenants move out then I will have to put money into making it rent ready, but I won't be able to refinance for another year meaning even more of my money will be tied up. I guess one solution to that is to see if I can get them both to sign a new 1 year lease but that might be hard before I take ownership. I do know both tenants want to stay, but Im not sure how they would feel about a rent bump.

Rates right now for a cash out refi are around 6.5% with 2 points which is pretty good. I don't know what they might be in a year. Im really not sure what the best play is here as I feel like there are pros and cons with either decision. 

I am currently in dental school in Cleveland with the goal of getting my first deal this summer while on break. I am looking to get a duplex or triplex in the Cleveland area. I was wondering if I should set up a holding company/LLC prior to doing my first deal and if so what do you guys recommend I use to do so.

Thanks!!

With me being new to real estate, LTR seems to be more challenging, and the cash flow might be somewhat lower. However, with that being said, I am open to all investment strategies. Just need guidance on which option is best for my situation, current market, and location. Thanks for the input.

I would like to accomplish both, but leaning more toward cash flow. The appreciation comes with rehab work and I work W2, so not much time to spare unless numbers make sense and have a good reno team in place.