All Forum Posts by: Andrew Eshbaugh

@Andrew Kerr, thanks for the advice! I will definitely look into our local codes. From what I understand with the gentleman is this; His mother lived there and past away. It's her things that are in the house. No one "technically" lives there. She lost this house before she passed away as she had it listed as collateral on one of this gentleman's houses. He is also a REI, but I don't know if it was for one of his rentals or his actual home.

Hello BP!
I've finally purchased (waiting for COE tomorrow) my first rental. It's a single family home I picked up at auction from a previous foreclosure.

The Sheriff's sale was last May and I assume there was a 6 month redemption period which past. I bought the house at auction in December '17. Now that we're ready to close escrow, I find out that the person living there refuses to sign an affidavit of vacancy and claims he knows his rights. Now I'm forced to evict or come up with another creative solution. Has anyone ever seen this before? Could anyone provide any tips/tricks?

Thanks in advance!

 That's a good assessment Bob. I noticed the same thing!

 Our long term goal is to get between 15 and 20 doors. We're really hoping to do that within about 5-7 years. The idea is that my wife could retire from a career in nursing and focus and passive income.

Thank you all for your replies! This is so exciting and we're trying our hardest to make sure this deal happens!

@Jody Schnurrenberger, first of all Thank You for your service! My friend also has rentals in the same general area this house is located and is the one who got me interested in the homeless vet program in the first place (15 total doors with vets). In a nutshell, he's stated that the ones that have been placed with him are generally happy to have a roof over their head and have not been a problem. I realize this is not always the case, but I figured it's a least worth talking about. I myself have never served and I wish I had. This seems like a good way to serve those who've served. However, I'm still debating this route. You mentioned you used 9% for each category. This is the area I've struggled in a bit....How much to save. I chose 7% only because I seem to remember hearing that number in one of Brandon's books I listened to on Audible. The cash on cash ROI on this place is 23.44%. I do try to make sure when evaluating that I'm at least around 12% and this is close to double that. But as a new investor, I wasn't sure if this was a number I could bank on and base my decision around that. But it sounds like if it's 20% or higher, I should be very happy with that!

@Kelly Moniz, Yes we plan on managing this ourselves as it's about a 15-20 minute drive from our house.

@Corby Goade, that's an interesting way to put it. I guess I considered that the agency vets their candidates before I would rent to them and i wouldn't have anything to worry about. But, I don't know enough about their vetting process to know who passes the test and what criteria they are looking for. We could attract gainfully employed tenants or college kids that are at some of the local colleges/universities. If we charged market rates the more traditional route our cash on cash ROI would jump to 41.15%. I think I'm starting to see the picture here.

 Small world William. My wife and her whole family is from Charlotte! I know the area very well.

Hello! My name is Andrew and my wife and I are first time investors looking to learn more and make passive income!

We're from the beautiful SW Michigan and love it here.

Hello BP peeps!

My wife and I are new investors and working on getting our first deal. We located a property that we've walked through with a contractor and another local investor friend. I'll list the details below. I'd really like to see if anyone has any input to the approach we're taking and would be willing to offer up any advice for us. We've been visiting the forums for a while now and have been listening to the podcasts. So we feel like we, at least, know enough to get ourselves into a decent deal.

The house is a tri-plex and is currently on the market for $50k. It's owned by the County Land Bank, which acquired the property after 3+ years of tax avoidance. 

Back taxes are currently $1,500. 

Estimated annual taxes is $2,100. 

The renovation estimate is $40k. 

I'm estimating closing costs to be $5k including the $1,500 in back taxes.

All in budget looks to be roughly $95k. Once the house has been renovated, it's estimated worth is $140k-$180k, from what we've been told.

Being that this is owned by the land bank, we are required to show all proof of funds and a renovation budget/plan. This shouldn't be a problem, but just one more hoop to jump through.

How we plan to pay for it:

We are finalizing our HELOC which should give us ~$71k. We will use the HELOC to provide the 25% down payment on a mortgage. $12,500 from the HELOC and the remaining $37.5k in a mortgage. That gives us enough headroom to use the HELOC for the renovation budget.

With all this in mind, here are the estimated details of the income stream.

We can take the easy way out and grab renters from a local agency that vets and places homeless veterans. They do all the vetting and also pay the monthly rent. This would give us a $2,200 income for all 3 units. Alternatively, we can rent out the old fashioned way and bring in about $3,000.

Using the BP Calculator, we used the $2,200 income rate to see our lowest option for income. After saving 5% for vacancy, 7% for Cap Ex, 7% for repairs factoring in $350 for utilities (we'd have to pay if we used the local agency), we'd have a monthly cashflow of ~$640.

This seems like a great deal to pursue, but I'd like to hear others inputs.

Anybody ever deal with land banks? Am I missing some expenses somewhere?

Thanks for taking the time to read my story!