All Forum Posts by: Zac Davis

its my understanding that pocket listings are exclusive to an individual agent or an agency, and the idea is to sell it without listing it? 

The only thing that would make sense is that its beneficial to the seller because of discounts the agents can give you on their fees on both ends of the deal? if anyone can help me understand this a bit better I would greatly appreciate it.

im trying to understand how hard money lending works. at first i though if you find a lender and he wants 10% you would pay him his money and 10% when you reach the 3 month or 6 month term you set up. But If I'm paying 10% apr then it is $10,000 for a year use of the money. if it is just the time used then it is $833 per month( 10,000/ 12 mns.) unless of course it is compounded monthly, then the amount would be a little more each subsequent month. can anyone explain how a typical hard money loan works? i know its different for every lender but just a basic understanding of how they typically work would be great.

i really didn't know what i could expect to get out of a meeting but if that's the case than real time interaction with someone would be a great help. i get caught up on the dumbest details and seem to need to ask a lot of dumb questions. I will be attending for sure. thanks for the advice. 

@James Messai re-read your post, i took what you said the wrong way, thought it was a lot more negative than it is. thanks for your response, i do have a lot of learning to do before i can make a move. good luck on your future deals

@James Messa I'm nowhere near ready to do a deal on my own. you are 100% right, but you completely misunderstood me if you think im looking for someone to tell me to go for it or not. the purpose of this was to find out where im going wrong, what i may be missing. Im trying to figure out how this works. ive been reading a lot and trying to get a firm grasp. this was a real example from a wholesaler in my area so i was running through it. I just barely joined bigger pockets and and am going to meetings in Boise when they come up. please try to be helpful, you were brand new once too. 

Ok, its been a day and i didn't get any response. its ok because it gave me more time to try to wrap my head around this. its taken all the brain power i have but i think i have it figured out. Please chime in where i am wrong on anything below

price-113,000 rehab-7,000 total~120,000

in order to buy I would need outside money, lots of cash. typically ive found that wholesalers deal in cash only because banks move slow..but its not required by all wholesalers, im not sure about this house in particular, but for this example we will assume I need all cash.

investors money - 100,000 our own money 20,000
after I get to a certain point, not sure if I need a renter or if I do this after I rehab I go to a bank and cash-out refi. this is where its not clear but it sounds like depending on the bank they will do between 70-80% loan to value(LTV) and use their own appraiser at my expense of $300-$500
assuming the house appraises at 150,000

70%-105,000
75%-112,000
80%-120,000 (based on 80% re-fi)
so if I offer the my investor 10% return I would owe him $110,000 so i would get the remaining $10,000 to put towards my own investment ($20,000) and of course closing costs and such, so I would own a house for 10,000(plus closing costs). mortgage on 120K plus taxes would be around 750-800, and it the rent comps hold true at 1300/month, I would cash flow 500-550 less mgmt fees.

Greeting BP community,

I am very new to all this and Im trying to figure out a deal. i have an opportunity to purchase a 3 bd 2 ba for 113k. it has a den now that can be converted to a 4th bd. the estimated costs to make it rentable are 7k. It was built in 2009 so im not to worried about any major issues. 

comps in the area are 140-155k

rents(4bdr) go for 1100-1300

the above is the basic information that i got from a wholesaler. Here is where I run into issues understanding how more experienced investors would make this work

I know that the comps for the area are around 140-155k but it was pitched to me as a good buy and hold property. at first i wondered why this was important to know, but then i realized that when i refinance to a conventional loan the banks will refinance something like 70% of the appraised value?? im really not sure where that number came from as i have read so many forum posts and cannot remember where i read it. 

if this is true and 70% is the amount i can refinance, at a price of 113k plus the 7k, i would need the house to appraise for well over 150 in order to pay off the money i used to buy the house.

as you can tell im probably way off on a few things here. i really need some help understanding how this works. 

@Jim Adrian 

thanks, yes you're right. i wouldn't buy it how it is now for my primary residence. renovations for a lot of people are a huge pain too. i appreciate the feedback. You definitely helped me out. would you say kitchen and the bathrooms are enough? i know you don't have much to go on but budget wise, do yo think 15-20k is a healthy budget?

thanks for the response. 

We bought this place 3 years ago, for 130k could have sold it for 170 6 months ago. with renovations im fairly confident we could sell close to 200k based on recent comps. i think if we put 15-20 into it we can get it where it needs to be in order to do so.

I'm trying to decide if renovating a property before we sell will be worth it. 

We listed the house 6 months ago after a tenants lease was up for 180k. we had some traffic, even a low offer, but ultimately It didn't sell so we got another renter. it cash flows better but not well enough. Once their lease is up we will try again, however I think a more updated home will sell better. 

there are a bunch of properties in the area that have been flipped and sold for 205k+ that have updated kitchens and bathrooms. This place would need 2 updated bathrooms and a new kitchen for sure.

How would i determine if this was worth doing? Where will the money get the most return?