All Forum Posts by: David K.

@Gary B.,

to be able to provide any advise at all, you need to give a lot more info - what are the taxes, insurance, what is the condition of capex and other expenses, is there any room to increase rent or is the current rent at the market prices, what type of neighborhood this is...So many tangibles that either make the deal good or not so good.

@John Warren, thank you so much for responding.  Given the numbers,  it definitely makes sense to spend as little as possible.  I am just concerned that the units recently sold or still avail on the market are all nicely done, I don't want listing this unit,  losing time and then still ending up with additional renovation

@Shawn Ackerman, if this is the case, sign me up - If i can get an investment property for basically free then I am in any time.

Perhaps we can discuss this - thank you!

@Shawn Ackerman, this seems innovative but still very confusing for me. 

Let me see if I understand: So if the property's true value is 100k, you try getting it for 70k cash, with tenants in and no financing for the first 45-60 days. Then get the delayed financing. The appraisal is for as-is property, say for 70K so the loan is for 70k - 17k (25%) down-payment = 53k..

I still have to pay 17k + closing cost for the property. Even if I am able to salvage the closing costs by rolling them into notes (have very fuzzy understanding of this), i still pay the 17K. Then once the tenants leave and it is time to deal with turn over expenses, So, I still don't see how 45k gets me much more than 2 TK's?

@Jagpreet Singh, I have invested into 5 properties in 2017, doing exactly what you are looking to do.

It is easier than you think - find a reliable TK provider and off you go.

The only caveat to remember is that once you exhausted your 45K, what is next? 45K will be enough for down-payments for 2 single-fam houses. Expect each of the houses to generate about $150-200 per month for you if all goes well. 

What is your long-term strategy? If you are looking to "park" extra 45k somewhere to generate some extra passive income and that is all then it is easy and ok, but if you want to continue building and growing then you need to consider this..

Good Luck! 

@Jefferson Smith, my advise to you - do it alone!

If your potential partners aren't bringing anything real, tangible to the table then you do not need them.

I decided to go in with a friend partner and we did everything 50/50...except I found each and every deal and now I am the one dealing with PM's, running finances and so on..My partner will gladly do whatever I ask him to do, but that is not what partnership is about. Yes, he contributed 50% of the funds but nothing else. I was hoping for another set of eyes and brain but he is too busy outside of RE and so I have not really benefited from this partnership at all. Moreover, I am often frustrated and as you said, being that he is my long time friend, I do not want these few investments jeopardizing our relationship.

Good luck!

I just closed on condo deal and need your advise how to rehab. This is 2b/1ba 1350 sf unit in over 55 community in Jersey. Windows are new, AC wall units are ok and the heating is all new too.

I wanted to buy this place solely to hold and rent. The original purchase price was 107K and the rents out there are in vicinity of 1200-1400/mo.

However, since originally agreeing to the deal back in October, we have had some issues getting loan approved and the seller became anxious and we had to make a decision whether to lose this deal or pay cash.. Long story short, we ended up purchasing the unit for 105k cash because I simply could not let this deal get away. The current market prices in the community jumped like crazy and comps are now in 150-170k range.

So now i have a dilemma:

1. Do I rehab moderately just so I can rent it out easily for 1250-1300? If yes then I think all I need is to replace carpets with laminated flooring, repaint the whole unit, replace all appliances, repaint the kitchen cabinets. 

Rent it out, refinance in 6 mo from now to cash out..Not bad but I will still have to deal with condo rules and hope that the market does not crash before I apply for refinancing.

2. Rehab to flip for 150K conservatively (165k aggressively) - gut and replace kitchen, granite countertops, gut and replace bathroom, add some recessed lighting in the living area; the rest is the same.

I want a quick flip while the prices are on the top.

3. Or rehab like in case 1 and try selling it for cheaper like 140-130K? Most of the units up for sale or sold around 150-170K in the past 3 months are/ were nicely renovated.

I have never managed any rehabbing other than in my own house so I really don't know the investment rehab prices; the timing and how these updates will impact the goals. 

Please help me understand the pricing and what you would do.

Thank you!

@Jason Sylka this is so cool. I work full time in IT but not as smart as you are :) I keep scrolling through the bp podcasts in stitcher but it's so annoying to find what I want. So I just tried your search and its so easy and quick too! Right away it came back with all podcasts with my key word! congrats and thank you!

My agents always tell me to stay away from section 8. They claim the rules are that if tenant complains about any! disrepair, the money stops coming until you fix and prove it.

With section 8 type of tenants you will always be fixing things.

But, there are plenty of investors that don't mind it at all - for some it is important to know that the rents are guaranteed by government...

The numbers are good though! Good luck!

@Melissa Kirchhoff, That is not a choice for us to extend the contract. The seller needs the money to buy a new property. We started the process in Nov and they assumed that we will be closed in Dec. They let the tenants go by xmas and so they are now losing money..

Of course, if they break with us, they will have to start all over again. But, it is possible that they won't mind as the prices in the community seem to continue rising. Similar homes in the same development are now asking 235k.

@Raul R., thanks for the clarification. Sure I understand that HOA can increase at any time. Historically though they have increased only very slowly. I think as rents raise as well, we have some wiggle room but yeah, I hate not be in control.