All Forum Posts by: Alexander Wardell

@Jeremy Taylor well I have found myself in the same situation lately. When I started to search for local markets I looked for signs of potential growth. Mine happen to be plans for a commuter rail, Amazon, and a few other developmental signs toward positive growth. Once I narrowed my area down to 5 or 6 zip codes I linked up with a realtor who works with investors in the area (From BP). I was put on the MLS automatic email update list for the type of properties I am interested in and I religiously check them for updates. I also check the addresses on the MLS against some of the popular RE sites like Zillow, and Trulia to see how many days they have been on the market. Since some of these sites can show unavailable houses for sale its also a good idea to confirm with your realtor.

Not sure if this helps but I found it to be some what effective for a newbie like me. 

@Adam Philpot Well I can't really give you advice on much but I will say you should go an check out a couple in person just to see how it all works. I have been to a couple here in MA, but they are at the actual property.  I know they were not what I had expected but I am glad I have a better understanding of how the process goes if I find myself trying to buy one in the future. 

Hopefully other can give you some solid advice and I will be checking back to see what everyone else says. 

Good luck!  

@Account Closed is the property zoned as a commercial property or did they just ask to have it changed? How is the house being used currently? Was the seller living in it as a primary residence and decided to rezone it prior to putting it on the market? 

If the property has no prior income to go off as a commercial property how would you know what the value is? Seems like the deal should be looked as a residential property because when it comes down to it, that is what it is. 

The seller can believe all they want, they can believe there is a gold mine under the house and price it accordingly but they will only get offers for what people are willing to spend. Run it as a rental property and make the numbers work and if you like how the deal looks then offer the amount you feel will work. If they say no, then NEXT! 

@Mike B. I agree with the others. Do not do any repairs before you close. You might luck out and have it go as planned but things happen and you will have put your money into a property that you do not own. To risky.

@Skye Anderson that's vacancy and management. Should be about 15% or more depending on the area. Since you are out of state you have no other option but to use a PM company. If you can work those expenses into your deal and still cashflow and meet your cash on cash return then why not go for it. Interview a few more companies but I will say that if you decided against making the deal because of the cost you will miss out alltogether. If you are happy with a cash flow of 100 bucks a month to have zero involvement then that seems like a decent deal. Good lukx!

@Quintin Gulley Jr 

https://www.biggerpockets.com/rei/self-directed-ir...

skip to minute 20 of the How To Fund Your Deals With Other People's Money webinar and @Matt Faircloth will explain it a little. 

Good luck!

I have a couple of questions. Yes, 12% is a great return for your mother, but was this negotiated at all? or is that the family rate? I do believe the tax limit for gifts is 15k but I am not an expert in any aspect of real estate so double check.

Is she only interested in getting a return on her investment or would she consider staying in the deal with you. You could use her money as a down payment, granted you do all the leg work, and split the cash flow ( or future expenses) from day one. Then you can refi and pull her money out and return it without adding interest. Then continue to split the cash flow moving forward. She would get a monthly payment throughout the whole process and you would also get paid. 

Unless you are planning on using this property as a source of income right away you could also consider paying her off with 100% of the cash-flow unit your debt to her is paid off, then you wouldn't necessarily need to refi, unless you wanted to pull money out to reinvest. Once she is paid off the cash flow is all yours and your P&I payment wont increase because of a higher loan after the refi.

It would be nice to no some of the figures . Rental income, property value, rehab cost (amount borrowed from your mother).

Not sure how much this helped! Good luck  

@Rob Haines Thank you for clarifying that for me.  It seems strange to me because the driveway on this particular property is single car width with maybe 2 spots around the back of the house. This set up would not be a good fit for 4-6 separate families driving different cars.  Seems they would just block each other in therefore causing more of an issue. The only reasonable solution would be to use street parking since it is a city.

I will definitely look into this though. Thanks for bringing it to my attention! 

@Boyd Coleman the lending will be complete before we would even consider finishing the space if all goes smooth but yes if we decide to complete the units before we refinance then yes funding would change. 

@Rob Haines Yes I am certain the added units would turn this already very profitable property into somewhere around 2k a month cash flow! I will ask about the zoning and permitting for sure. I am a little confused about the parking issue. Are you saying there needs to be a specific amount of parking on the property or does street parking count towards the requirements? The lots are small and there is no way I can get a spot for each unit on the property, even at four units this is next to impossible. I wish I could house hack this property but that is just not in the cards right now, or ever as my wife puts it. 

@Eduardo Rodriguez Yes this would be a slow moving process. Since the property is vacant we would look to get the other units fixed up and rented out. During that 2-3 month process would could look into the local zoning and planning and other requirements. This would be a hold property so time is definitely on our side, plus the property will cash flow 1k a month without the extra unit(s). Hopefully this next week goes smooth for us

@Dan Handford thanks for adding Brandon Abbott to this forum. I will keep an eye out for his input.

Thanks everyone!  

@Dan Handford yes the attic has 11 full size windows. The building has a flat roof also so the attic units would not look much different than the lower units. As of now the only egress is the front and rear door and the attic only has one door. I am guessing there will need to be an outside fire escape? 

Thanks!