All Forum Posts by: Bill Jacobsen

I assume that your monthly rent to price is 1.4%, not as stated.

Congrats.

Bill

I started out with a partner who acted as a general as well as doing much of the work.  The projects usually took 2 to 4 weeks with 4 months from buy to sell.  We split the profits 50:50.

I now use general contractors.  I budget 6 months from buy to sell.  I budget 20% profit on the money required.  Most who can do the work seem to want to do the work.  If you do the work you should require above 20% per project.

Hope that helps.

Bill

Assuming that the property would be worth $147,500 after fix up  or it can rented for $1,350 per month it would be worth about $75,000 to me.  If it is worth that without fix up you are getting a good deal.

Good Luck.

Bill

Interest at 5% on $155,000 is $646 per month.   A 50% expenses ratio on rent of $1,250 is $625 for a total of $1,271.

Enough said,

Bill 

You say you are losing $395 per month currently.  That means you must believe that appreciation will help you out by over $5,000 per year.

You are currently paying an average of 6.3% for your money although I am not sure your HELOC is related to your house. If you could rent for $1,200 per month with a 50% expense ratio you would be making only 5.5% on your money. You would be making 6.3% on $114,285.

The question is, what could you net out of a selling?  If you could only net $114,000 I would put up the $17,000 to stop the $5,000 per year loss. Payback is less than 4 years.

Just my opinion.

Bill

I agree with Nathan's comments.  I like to make 3 percentages above my cost of money.  If the cost is actually then I would want 9.5%.

Good Luck.

Bill

First, you have to understand that you are the wholesaler and there usually is not enough room for two wholesalers.

Let's run some numbers. let's assume that the ARV is $27,500. Based on my formula there is about $9,000 available for rehab to make the house worth the above amount. What do you think it would take?

How about a rental?  If it could rent for $400, assuming a 60% expense ratio and a 10% cap rate the property would be worth $19,200.

I would determine the fix up cost.  If it is about $9,000 then the property should be worth about $6,000 to an investor.  If it will take more I would sell for whatever you can get for it.

Good Luck.

Bill

The costs of selling rentals will be about 7% counting commissions + you will lose 5-6% pretax against $10,000 set up fees and 4%(pretax). You are taking on slightly more risk with the LOC. Also you are losing any appreciation if you sell.

Do whatever you want.

Bil

I like properties that I can buy at 75 times the monthly rent.  If I can borrow at less than 5% I will pay a little more.  I know some parts of the country won't support those numbers.

Good Luck.

Bill

Desired outcomes should be the same.

Duties of all members should be spelled out.

How to desolve relationship should be spelled out.

By spelled out, I mean, "in writing".

Remember that you have two relationships going on, a business relationship and a personal relationship.  Keep them separate.

If you can't do the above, don't go ahead.

Bull