All Forum Posts by: Andrew Angerer

@Caleb Jordan 

My example may not have been perfect, but I believe my argument is sound. Hard money lenders will sometimes can cost you more than other types of loans. If the added cost of your payments to your loan changes the numbers too much in your investment into it, that you do not follow the 70% rule anymore, maybe seek another deal that you can afford.

However there are many good deals you can make with the additional costs of HML just make sure that the the numbers add up in your favor.

Be sure to do more research then just what I told you for you may not qualify for other reasons, but this is at least an avenue for you to look into. 

 I would avoid putting "To whom it may concern" that sounds like you have no interest in knowing their names any more. 

It is still possible, however it just has to go into the math formula you use. If everything else is a good deal, and the math works then you can get 70% still easily, however if the other numbers are already high, then adding a hard money lender interest rate could push this deal into the "no go zone"

Example, a 5% interest rate on a 100k loan has a monthly payment of nearly $800 a month. 

However, a 14% interest rate on the same loan has a monthly payment of almost $1450 a month. 

These two examples are based on a 30 year term, and many hard lenders may only offer shorter times, so that number could be much higher. 

So, if your goal is to fix and flip right away, ask if an extra $1950 for 3 months needed to fix the property is enough to make a good deal into one that will lose money. 

@Edo Tinjak I used to work at Grandview as a Med Tech. It was a scary place to leave at night, and still is. Almost everyone I worked with there lives far away in the suburbs.
 I really doubt that fixing a hospital would really pull this area up much at all, and is honestly a response to Good Sam closing. Unless they are planning a ton of preventive health operations/community health outreach they are just putting a band-aid on a broken bone.   

Dayton has many issues, but has many chances to pull itself up. Currently there are a grand total of 1 grocery stores in the entire down town area. I think that the basics need to be covered before certain parts of the area can improve. 

Investment Info:

Single-family residence buy & hold investment in Kettering.

Purchase price: $72,500
Cash invested: $15,500

2/1 single family property on a private drive in Kettering Ohio. A ton of natural light from the unique front windows. Large kitchen and bathroom. One car garage, and covered porches in front and back.

Technically my first investment, I had a live in tenant who paid to cover all expenses/mortgage, plus a little bit of cash-flow (single family house hack).

**The reason I say technically is because this is and was my primary residence. **

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

***Full disclosure this is my primary residence***

I knew that I wanted a place that had multiple bedrooms in order to rent out one to improve my income. I did the math, and realized that with such a small mortgage payment, even a lower rent could pay for everything plus have some income.

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

Excellent Real Estate agent, Greg Brenner, asked what I was looking for and showed me multiple properties. This was the last on his list for the day and I knew I wanted it.

How did you finance this deal?

Saved up money from standard job, 20% down from an FHA loan (due to my short credit at the time)

How did you add value to the deal?

Repaired the garage leak in roof, complete demo and then patched flat roof.

Landscaping, mostly hardscaping with rock and stone in the front and back.

What was the outcome?

--Good lessons learned in being a landlord.

--Cash flow was positive for duration of time.

Lessons learned? Challenges?

--Cash flow trumps W2 income every time

--Tenants can be the best people ever, pay on time, every time and stay clean

--You need to have a strong lease agreement, do not allow guests to start staying unless there is a specific agreement.

--Tenants can live in filth, and actually deny pest infestations that they dwell in.

-- There is always a good way to say you need to move out, for me it was, "at the end of your lease, you should find a bigger place for you two"

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

Chicago title did a solid job with title transfer, and made me aware of various aspects to title ownership

Greg Brenner Reality, patient but skillful Realtor.