All Forum Posts by: Brandon Turner

Good question Samantha. I have experimented with both avenues and I agree a lot with what Dylan said above - it depends a lot. However, I have found that by doing a 75% remodel before renting a unit out (updating all plumbing, electrical, roof, etc)and then finishing with new paint, flooring, counter tops, etc before the final sale.

Hey Scott - thanks for jumping in! I hope you'll learn a ton from BiggerPockets as I have!

My thoughts -

Not sure what your down payment is, but it sounds like your monthly loan amount will be around $900 per month. Add $500 for taxes and $600 for HOA, you've got $2000 per month in bills, and the same in income. So no cashflow at all.

Furthermore - figure on the HOA increasing steadily, as will taxes and such. Then you'll have maintenance and other charges. Finally, college areas are notorious for having long vacancies during the summer - so plan on at least losing 10% to vacancy. Overall - you could be negative cashflow of $5000 per year.

That's not good.

Unless-
1.) you put down a huge down payment
2.) You can handle negative cashflow of this much.

Even if I could handle the neg. cashflow - I never would. Even if I thought an area was about to get really big - I still wouldn't. I'd have better luck with the 48% chance of winning in Blackjack.

I bet there are much better deals to be had. Try looking outside the busy city - perhaps into a duplex or triplex or something like that. You may find a much bigger bang for your buck.

Keep in touch!

Thanks for the link Greg- this is great info! I'll have to enroll in some myself!

Hey John- Hard money is an option, but a dangerous one. Their short-term time-frames and high fees and payments can make your cashflow disappear quickly. Additionally -they are probably going to be even more conservative than your current bank.

Any possible way of getting your current lender to refi it? I mean, if you've been on time and it cashflows well - they may find it a better option than foreclosing if you couldn't refi it.

I haven't - and on low priced fixes like that I don't know if it would be worth it. It really depends on how good of a deal you are getting, but those things shouldn't be more than six hundred total to fix. A handyman could install a garbage disposal in half hour and replace a HW tank in a couple hours.

Good luck!

Hey William,

Interesting property. I've never invested in the college-town style, but I'll give you my thoughts anyways!

So, just so I'm understanding right, you plan on buying one of these 4 bedroom condos and renting out three of the rooms to roomates? If so, just figure on only 1200 income then, which brings your cashflow down to nothing but you are living for free (not a bad gig).

Renting to roommates can be tough. Roommates will view you one of two ways:
1.) The landlord (greedy, scum, etc)
2.) A Buddy (Oh, he can wait to get paid).

There is not third option, in my mind. So, be prepared to be a little bit of a jerk to them and have them not like you if they become lazy in paying the rent. My bro is dealing with this now, and I did when I rented an apartment in college.

As for the math, your numbers seem solid enough, but you didn't include maintenance. Based on the age, it's probably not a huge deal but you'll want to make sure - just in case - that you have some money set aside for this.

Financing might be possible, but I don't think going commercial will help at all. Commercial loans are more expensive and can be just as tough to qualify for. I'd focus on cleaning up your credit as quick as possible. I'm assuming you are self-employeed? That also makes things difficult, but perhaps you could get a 9-5 job for a few months to make qualifying easier and to save more money. Just a thought.

Anyways, keep in touch and let us know how this all works out.

Brandon

Hey Eric, Looking forward to it!

Hey Kevin,

I'd suggest talking with a local Real Estate Agent to get connected with local real estate investors. Find out who they are using and can recommend. It's an excellent way to find good contractors!

Hey Darrell, Welcome aboard!

Wholesaling is not a bad way to start out, especially compared to flipping. I always recommend finding out who the big "house flippers" are in your area and meet with them about wholesaling for them. If you find out what they want, its much easier to build your buyers list and make some great connections.

Good luck and keep in touch Darrell! Seeya around the site!

Hey Randolph! Nice to meet ya!

1.) Yeah, Realtor.com is a great place. There are a lot of MLS style sites out there, but some are better or worse for different areas. I like "www.TheMLSOnline.com the best, but they all just feed off the same info. Also, a Real Estate Agent is free to use for buying and will have the more powerful tools to search - so I'd recommend using them.

2.) Direct mail can be anything, but the yellow notes seem to be the most popular right now. I don't do direct mail, but instead just focus on homes on the MLS, driving by vacant homes, and word-of-mouth, so I'm going to have to pass that question to others. But I know you can buy lists online of absentee owners' addresses.

Good luck Randolph and you are doing the right thing! Dig in, read a lot, ask questions, then jump in! Keep in touch!