All Forum Posts by: William C.

Lesley Resnick huh? 120k ARV? Wrong post?

Nice job! So did you purchase it for $125k or not? Sounds like it was your moms and it stayed your moms. Just curious where that number came from. Are you going to rent it or sell it? It looks like a perfect fix and flip. If renting it is the plan I'd be a little worried about the wear and tear. We are at the peak of the market so if you were ever going to get top dollar it would be now. Kind of like driving a new car off the lot you may see depreciation on all your brand new high end finishes as time passes. Great looking home non the less and it looks like you'll make money one way or another.

do these sellers want to sell?  Or do they need to sell?  Or neither?  Just curious why they are reaching out to you, but then referring to a realtor in terms of price?  Is there something preventing them from listing with the realtor?

Keep at it.  It's a numbers game.  Some of the stats iv heard on the podcast from avid direct mailers is 100 offers to get 1 accepted.  So for every no you get, your that much closer to the one that will say yes.

I think the financing part would be the biggest determining factor if I were in your shoes. You can buy a home with as little as 3%-5% conventional and 3.5% FHA if you "plan" on living in the home. Depending on the extent of the rehab you could finish a bedroom, or even better a basement, and then have a clean place to live while you a finishing the rest of the house. It seems like a great idea in theory. I have always been jealous of those able to do love in flips having no kids and being flexible. That boat sailed for me but in your position you should definitely weigh the pros and cons of doing the live in flip vs living in the RV. I don't know what your buying power is, and it also sounds like your jobs are flexible, but I'd sit down with a lender and see exactly what your options were if you planned to live there vs not. Best of luck. Sounds like fun.

Are you the cheapest because your the least attractive unit on the market? That might be your issue. Personally we are always the most expensive units on the market but we also provide the nicest units. Tenants love tile showers and stainless steel appliances. I'd also market the unit while you are renovating but don't mention it in the ad. When people call let them know you are making some final touches and you'll show it when it's ready. Then when it's ready you should have 20-30 people on a list you can mass text email or call to come to an open house. You spend an hour or 2 with the door open and everyone comes through. You should have 3-5 applications in hand by the end of the day. At least that's how we do it.

It's been mentioned already but I have to reiterate the fact that yes, the tenants will be paying $49,200 over the next 2 years. Unfortunately you will only be paying the loan down by $7,300 assuming a 30 year amortization. Real estate is not as easy as it looks on the tv shows. I won't even get into the expenses your failing to account for because this deal will never happen, at least it shouldn't. The financing alone will be a roadblock, and for good reason. That doesn't mean you should give up. Just educate yourself a little more on EVERYTHING that goes into a rental property. Then start running the numbers. Lastly, the goal is to have more money coming in every month than going out. Otherwise your not investing your speculating. And this is for sure not the market environment to be doing that. Price corrections will be upon us soon enough.

Can you add a half bath somewhere? That margin seems thin. Many a time we uncover $5-10k in unexpected expenses. Then it sells for 120k but they buyer needs 5k in seller assist. Now your left breaking even. I'd shoot for a higher spread. Under $15k is way too thin for my liking.

Deposit money is fully refunded if you were to cancel the contract? How much exactly are they asking for? If it's $1000 or so they are probably gauging your motivation as a buyer. I understand it's not the norm for a residential property but if that's what it takes to get into them, what do you have to lose? You mentioned these contracts would have contingencies, that's a good thing right? That's what would allow you to get out of any bad deal once you do your due diligence.

Your expenses are less than $400/month? Taxes, insurance, utilities, water, sweet, trash, electric, gas, VACANCY, unpaid rents, Repairs and maintenance, CAPITAL Expenditures, property management, debt service (if any), interest on you LOC if you used it. Just seems super low even if a number of these are covered by the tenant. Don't forget vacancy, capex, repairs and maintenance, and property management. These are the few that most new investors don't account for, and then lose money test after year and don't understand why. Even if you self manage, you just account for it since you'll either pay someone to do it in the future, or you will do it yourself which means time and unless your time is useless it must have a dollar amount attached to it.

Get pre approved. You'll learn what you can afford and what loan options are available to you. Many people don't realize there is a conventional loan product with NO mortgage insurance that only requires 3% down payment. FHA might not be your best or only choice. There are also other loans that require 5%, 10%, and 20% down. If I were you I wouldn't only talk to one bank. See what options are out there. Different lenders have different loans. Most importantly of all you want to get pre approved so you in fact know you can buy the home. Doesn't make a whole lot of sense to run around looking at homes only to find one you love and find out your can't buy it for whatever reason.