All Forum Posts by: Anthony Dooley

Columbus, GA doesn't have a REA that I know of, and I see a lot of newcomers to BP from the area including Phenix City, Fort Mitchell, AL.  Would some of you like to get together and exchange some ideas and contact information?  We should strengthen our local network improve our buyers/sellers list and make referrals to each other like electricians, plumbers, construction guys, etc.

What you are missing is risk. You cannot get foreclosed on a property that is paid for. You can however, be foreclosed numerous times if you are over-leveraged and you have vacancies, major repairs, or other unforeseen emergencies. You cannot refinance if your credit is bad from late payments or foreclosure. Borrowing money is riskier than cash because if it all goes to crap, you still own the bank. I'm not saying don't borrow money, but use it cautiously.

It's a one bedroom either way, right? Once you get potential tenants to look at it, they will either like the loft design or not. I would advertise it as a one bedroom apartment with pictures and see what happens.

The best thing you can do in the next 12 months, save as much cash as you can. You are moving, so sell as much stuff as you can on FB, Craigslist, yard sales, etc. You will need cash reserves for emergency repairs. Ask the seller to finance 20% of the sales price and pay some closing costs. This way, your lender only finances 80% and you hold on to as much cash as possible. Multi-Family buyers are a small market, so it is more difficult to sell later. Your seller will work with you in order to sell the property. Good luck!

You will get a higher return on your money in lower grade properties that usually come with higher turnover, higher hassle factor, which is higher risk that you will not get paid and your property gets trashed. For these type investments, I get over 30% ROI net, no mortgage. For nicer, lower hassles, lower turnover, stable tenants, If I get 10% Net ROI I am happy. The rent is never late and the tenants don't trash your property. Anywhere in the middle of those is the sweet spot for me. The ROI is directly related to your customer base.

All good answers. Go with Hattie on the numbers, but I would go much lower based on the list price. Remember, other investors are using the same information you are. So, to get your offer accepted over theirs, offer cash with no contingencies. They may offer more, but contingencies say to the bank, "this deal could fall through."

It sounds like the list price is a good value. I would offer full list price, as-is, no contingencies, cash (if you can), close in 10 days. The bank can't close in 10 days anyway, but it sounds good on an offer. REOs are usually as-is anyway. They will not repair anything from the inspection. You are going to rehab it anyway, so an inspection will just state the obvious. It needs rehab.

First of all, don't pay list price to the bank if you can avoid it.  At $1200 rent, I would limit the reno budget to $22,000. Prioritize what you need vs what you want. It can look nice inexpensively. You don't need granite. If your numbers don't work, find another property where the numbers work for you.

The exact expenses vary, so 20% covers unexpected expenses and still gets close to 16% net. I don't know why people rack their brains trying to figure every possible expense. They are only guessing and they are shooting for a 10% cap rate. 10% cap rate is not worth the trouble unless it is a high end property, which I don't buy because of the low return of cash flow. I have some rental properties returning 30% of gross rents. If you rehab the property, your repairs should be minimal for a few years. Shop around for the best insurance rates. Taxes, you can't do anything about. Good luck on you purchase.

Take the current gross rent, $12,000 per year and divide by the lowest rate of return acceptable to you for the area. For me, 20%. 12,000 / .20 is $60,000. That is my max offer. Of course a lot of other factors would reduce that offer based on the condition, location, appreciation, etc.