All Forum Posts by: Tim Stuart

Cindy,

One way to skin this cat: have the tenants contract with a moving company (or maybe even the contractor) to include moving the contents into storage and back into the room. Then you can reimburse them the cost, whatever it may be. When it comes to tax season, it will be an operating expense based on including it with the repairs and your elderly tenants will likely be grateful that you covered a nominal expense. I would be a little weary of the potential liability of personally moving a tenants belongings if there was any damage to personal property. 

Hope this helps,

Tim

Ane,

After getting the rehab costs estimated to the best of your ability, and If the numbers look like it will work, I recommend putting in the offer with a contingency based on inspection results. That way you lock up the contract with the ability to safely exit if the rehab is too far outside your parameters/budget. Remember that there are some significant supply chain shortages in effect right now so depending on your exit strategy, it may lengthen your timeline if having to wait on certain materials, ie: higher end appliances/doors, etc. 

Hope this helps, 

Good luck.

Tim

Hi Katrina, 

Another option (although less financially advantageous up front) is to make it a contingency that the property be delivered vacant. After closing, you and your husband can do a very basic rehab, bring rents to market (since inflation has been running hot the last 18 months), and choose the tenants you want in there starting from scratch. Luckily for investors nationwide, it appears the eviction moratorium has an end in sight. 

2 quick questions: Are you using it as a primary residence and what type of financing did you decide on?

Best of luck,

Tim

Hey Tyler,

What is your investment thesis and where specifically are you looking? 

I have some long term single family rentals midwest and east coast that cash flow but I'm looking to explore flipping in SoCal, specifically Orange County.

Thanks,

TIm

Alex, that's an Interesting perspective about raising interest rates. Just understand the macroeconomic picture of what happens when the fed begins Quantitative Tightening. Ray Dalio has some really good perspective about what the current state of affairs is regarding our debt to GDP ratio. I think we are more likely to see the US Treasury yield curve become fixed before we see interest rates rise significantly. This occurred in Japan 25 years ago and they still don't have high interest rates. 

Analyzing the fundamentals of the real estate market reveal a significant shortage to current demand. 

In my humble opinion, real estate market fundamentals are looking strong (low supply, high demand), foreclosures are no longer forecasted to be as significant as expected in early 2020, and low probability that interest rates will rise any time soon. 

Invest in cash flowing real estate and it won't matter what the value of the property is. 

I hope this helps, good luck.

Tim

Do you have any other properties that have equity in them? If so, taking out a HELOC or cash out refi to finance the purchase would give you necessary capital. After construction is complete, a cash out refi could pay off your HELOC if you choose that option.

Best of luck,

Tim

I would recommend sticking to individuals in your sphere on influence when relying on private lending. If you are entering private lending in an google search you will likely end up with Hard Money Lenders posing as private lenders. Start with friends and family and expand from there.

I have had a good experience reaching out to Aloha capital as their HML rates and terms are very competitive.

https://alohaprivatelending.com

Also, I spoke with Mark at Foundation CREF and they have comparable rates and terms. https://foundationcref.com

Just a heads up, unless you have done more than 3 flips in the last 2 years you will be required to have 20% down payment and 10% of rehab budget in reserves. 

Hope this helps, Good luck!

Tim

Nick,

Before completely eliminating this as a possible investment, consider this: you could enter an options contract for a nominal amount negotiated between you and the seller giving you the OPTION to purchase it once it is completely renovated. This is a unilateral contract meaning the seller is obligated to sell but you are not obligated to buy. This gives you the potential for the asymmetrical upside if it is the great deal you suspect, with a defined downside risk. Record the option contract at your local county recorder to make it enforceable.

Another way to mitigate the risk is to research what, if any, permits the contractor has pulled already. Reviewing the permits will give you insight into what the scope of rehab planned for the project. 

As many above have already commented, if you don't detail out exactly what you want, you are almost guaranteed to get exactly what you don't want, which will cost you more money in the end.

Hope this helps, Good luck!

Tim

Investment Info:

Single-family residence buy & hold investment in Merrillville.

Purchase price: $115,000
Cash invested: $25,000

2 bedroom 1 bath with detached garage in Merrillville, IN. Professionally managed by my team out there, it was rehabbed and completed in February, 2021. This is my best cash flowing rental at a 22.5% CoC return.

What made you interested in investing in this type of deal?

Cash flow is my investment thesis.

How did you find this deal and how did you negotiate it?

My investment advisor made introductions to a great property management Company that serves the Calumet Region on NW Indiana.

How did you finance this deal?

Conventional 20% down.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Norada Turnkey Investments.

Hello BP community, I have a question regarding Prop 19 property tax rules. 

Can I inherit a property from my mom and keep her property tax rate even though she is no longer on title?

Thank you all!

Tim