All Forum Posts by: Walter Key

Find someone with experience in your market at a local Investor Club then ask them to mentor you. 

Your words are gospel to me @J Scott :D

I guess all I really need to do is drill down exactly what I'm willing to except as profit on this deal. It'll be my first flip in FL so I'm expecting to gain a wealth of knowledge and first hand experience working in a new market so that alone is worth taking a little less cash at closing in my opinion. Gee...What would J Scott say here?? Oh yeah..."As a general rule of thumb, I like to assume that profits will be at least 10% of the sale price, with a minimum return of at least $15,000." That's right. Got it! :D

Thanks J!

So as everyone else is probably sitting at home with their lovely brides or their mothers, I'm away from both. So, to maximize my time away I'm being proactive and looking over all the sites I typically check for potential deals. Low and behold...a new listing! A 4 Bedroom, 2 Bathroom, VA Foreclosure that just hit the street. Asking price...$36,500. Needs a full rehab. Estimated rehab...$50K-$55K? I have my Realtor tapped to get the contractor over to it tomorrow for an estimate since I'm out of pocket at the moment. But...ARV...$135K-$140K! My Realtor actually just had a listing right down the road go under contract in one week of listing, with five offers. It's a 3/2...under contract for $130K. She's sold probably 1/2 a dozen homes in this neighborhood in the last 6 months. Great little spot.

So on to my problem..."Bring your highest and best by 9AM on Tuesday". Ugg...I don't want to wait until Tuesday to let everyone that's not actively searching for this deal to have time to find it tomorrow and be in on the bidding war! :( To add to my problem, I'm conflicted as to what offer to make. Due I want to offer more than the asking price considering it looks like the profit margin has plenty of room? I expect this property will be on multiple investors’ RADAR come Tuesday morning. What are THEY going to offer I wonder? Can they get the rehab done for less than I can? These are the questions that I sit and ponder as I type. In the grand scheme of things, I suppose this is a problem worth having. :)

For those that have found themselves in a similar situation before, what kind of offer did you present? More than asking? Full asking? What incentives (at this price EVERYONE is going to be a cash player) can I offer to sweeten my deal?

Happy Mother's Day everyone!

In that case,

I would suggest finding some well-priced but good condition rentals and use that $100K as down payments on 3-4 of them while still maintaining some cash reserves in the bank. Look for something that will cashflow at least $200 per door (so, $400/MO for a duplex, $800/MO for a 4-plex, etc). Multi-family properties cashflow better but a single family home will appreciate better over the long term. So, if her goal is to have wealth in 10+ years, maybe single family would better suit her goals. There's half a dozen or more ways for her to get involved in real estate investing. But, it's ultimately going to be a matter of her risk tolerance.

No one?

That would depend greatly on your state's landlord laws and your current lease with that tenant.

Do NOT pay for education. There are tons of free articles, forums posts, real estate investor groups, meetings, etc that can give her 90% of all the education she'll ever need. The other 10% of that education will come with expereince.

Does she intend to invest in Alaska or somewhere else? 

You said she's "more passive" investor but if you can quantify that a bit it would really help. Passive in that she doesn't want to be elbow deep in rehab work or passive in that she only wants to buy 100% turn-key rentals where she can be 99% hands off? 

What's her current goal(s)? Is she looking to plan out her retirement years or just looking to jump in and start making some money in the short term for now?

In the simplest terms possible, Active Income goes away if you stop working for it. Passive income continues to flow in even after you stop working. I.E. If I quit my 9-5 job, I lose my active paycheck. However, if I buy a rental property and after all my costs and expenses it cash flows $300/MO, I have just created $300/MO in Passive Income. If I do nothing else with that property, I will continue to earn $300/MO.

Make sense?

Welcome! I was born in TX (Rockdale). There's a plethora of great information on BP. Enjoy!

Welcome from North Florida!