All Forum Posts by: Dan D.

What about buying that $35k house that needs $10k in repairs to make it habitable?  That $10k can be a write off; so don't forget to factor that into the comparison above, right?

That is some great feedback and a great perspective.  Thank you.

 I understand the section 8 guaranteed income angle; but, don't these types of tenants usually trash the place?

 Those #'s are amazing.  Cap rates in the 15-20% range from the sound of it.  

So i found this listing in Loopnet for an office building at $1.2mil w/ a 26% cap rate.

It's in a pretty good area and 100% leased up.

Talked to the agent and he said it's closing tomorrow; final price $1.05mil and stated the cap rate is accurate (of course I did not believe it so I flat out asked if accurate).

Besides a pro forma; what other docs could I get to substanitate the agent/sellers claims on the cap rate?  Seller tax returns?

Just want to know what I need to be on the look out for as this deal seemed too good to be true and a no brainer.

I am new and can post the link to the property which just closed; but, need to go back and re-read the T&C of this site.  If I cannot and want me to send you the property in a PM i will.

Thx.

Thx to all

Answer to the above:

I am unsure the specific neighborhoods my friend is investing in; but as previously stated he is doing pretty well.

Yes, the management company is turnkey.  They are very competent and do not gouge nor fudge; we have another friend that is local and also involved in the investing that has 10+ properties and keeps an eye on the agent/management company.  My CPA friend does his taxes too; so we know these are pretty good investments.

I get the leverage idea; but, do lenders actually finance props @35-40k?  

CA just seems so hard to find decent cash flow; which is my ultimate goal.  

I want to buy my initial set of about 5; then 2 per year every year for the next 5 years which would allow me to retire @40 (cash of course).

Lofty goal; but, one can dream :)

So, I do not own RE but want to use my savings of around $200k which is currently sitting in the bank and losing value, to buy some properties to get some decent cash flow.

My friend has been buying SFH's in North Carolina for the past 2 years. He does the taxes (he's a CPA) of the agent/management company that sends him the deals.

Monthly statements and review of his taxes show around 12-13% cap rates.  These props are bought 35-40k cash, then rented out for around $750-$800/mo.

My friend and I live in CA; so, using this person(s) in NC is my 1st "out of state" investing choice due to track record and trust. Living in So Cal makes it very difficult to find decent ROI.

Any suggestions for a newbie starting out?  Are the above cap rates sufficient?  Input appreciate.

So; I realize most of these threads on purchasing pre-FC properties are for investment purposes, but, I wanted your thoughts on utilizing this same strategy to buy a primary home.

Live in So Cal where listed properties are going for far above asking prices, multiple bids per property within 24 hrs, etc......

What are your thoughts on mailing to pre-FC homeowners, in the cities I am looking to move to and see if I can get in contract on one of those?  The goal is to get a nice place at a reasonable discount.  I.E.  Est Value 700k  offer 500-600k (obv assuming owner has the equity)

I am unsure if we (so cal) are in a bubble; but, the market right now is madness; and I would like to buy but with a bit of a cushion in case values are inflated.