All Forum Posts by: Brandon Hurlburt

It is what I priced out for materials to be able to replace most of the floors, redo the trim, put new doors on, repaint the walls, update the bathrooms, new cabinets and counters in the kitchen, and a roof. Amazing how cheap it is when you aren't paying an arm and a leg in labor costs. Ha. Labor alone would have been about a good 50k.

Hello,

 My name is, Brandon. I'm currently a union tradesman. I got into real estate investing a little bit ago and always wanted to try flipping. Another tradesman friend of mine said he would help me through one at 20% of my net profit. So I finally started searching for flips. 

I currently have one locked down and I'm going to sign the purchase agreement monday. I wanted to first double check my numbers with more experienced people. I got a place for $140k. There was a 5% charge added onto that for 7,000. Holding costs and realtor fees are $14,000. Loan fees are $3,500, and repairs are $25,000. 

Comp homes in the area are selling for $295,000 and selling fast. 

Do these numbers make sense to you guys? Did I leave enough of a profit margin? Factor in enough fees?  What am I missing? 

Corby,

Thank you! I just might have to one of these days. Ha. It's always nice to have that third party insight on a deal to make sure you aren't missing any loose ends.

Best of luck to you as well!

Sam,

 Well, I am paying cash for them... so the 240 a month for the two remtals to cover tax and insurance, and 100 a month on the flip for taxes isn't really much of a concern. I would still have plenty of cash reserves to sit on them for a good year without going back to my 9-5 job if I had to.

Corby, Thank you for the reply. My goal is to own 50 properties by the time I'm 30, and a small town by the time I'm 50 😎. Ha. In all seriousness, yes, I agree. If the properties cashflow great, and I have the funds to keep going, I can have them managed and sit back and think about my next investment strategy. Glad to hear you have a similar process of acquiring rentals. That makes me feel pretty comfortable about the $160k I'm about to spend out of pocket while I hold these properties.

Matt,

 Thank you for your reply. These are three properties that do actually exist. Home values are just numbers I got from comparable homes that recently sold in the same neighborhood. Rents are mainly estimates. They "should" be able to rent out for that price. They are a bit on the higher end of the average scale, but definitely not off the chart. The renovation costs are my personal estimates. I just saw the place on Thursday after work. I personally used to do roofing, carpentry, and drywall for a living. I'm currently an HVAC journeyman, so I like to think i have a pretty good eye on what I need to to and what the actual cost will be. Plus I have all the tools and knowledge to do it. Ha.

I guess even if the home values dip a bit, and the flip comes out a little above budget, I'm still looking at getting these few rentals for next to nothing. I just never have personally done a more complex deal like this. The couple I have done were simply buy and holds of already rented out properties.

Bump 🙁

Hello,

I'm a newer investor and I'm trying to plan out my next deal properly so that I can maximize my ROI. Currently I still work full time at a 9-5 type job, so that eats up most of my free time. What I figured I would do is buy one rental with cash. The value is approximately 100k, but I am going to shoot to close at 75k all fees included, (already listed at 82). Then open up a HELOC. Without the property bring seasoned I can only get 45k, but I would use that and another 30k to buy another similar property. From there I would have enough income to comfortably replace my income from my job and was going to do a quick flip. 45k for property, est 15k in reno, and comps are going for 100k, so I have plenty of leeway in my budget for a couple unexpected fixes. From there I would have all three properties rented and held for 6 months before doing a cash out refinance.

So by my math, I will have invested a total of $210k, but after seasoning the properties and refinancing at 75% of the full value of 300k, I should get $225k back, which after paying back my LOC, that should leave me +$15k. And with my rents @$1,300/month each, factoring in PITI and capex, etc. I should also have a good $1,380/ month in income.

What am I missing?? Ha. It sounds too good to basically get paid to earn a residual income every month.

There is definitely some solid advice here. I would like to add in a few more quick notes though.

All of the variables mentioned are just that, variables. They can be changed. If you can get a house that grosses 40% more of a return, that is awesome! If it is in a run down neighborhood full of drug addicts, it probably isn't worth it though. That isn't to say that just because a place is cheap, it isn't good. Just take into consideration the neighborhood, the amenities, the move-in readiness of the home, etc. Just because it grosses 30-40% more in rent, it might not be a better deal IF those variables aren't in place. Just be smart! 😉

Hello, 

 I'm fairly new to the real estate investing world. I'm starting out my career in central Wisconsin. I just wrapped up my first deal on a multifamily, and in the process of acquiring a few single family properties. What interests me the most are more "risky" properties. I have a background as a skilled tradesman and I'm definitely not afraid of touching up some minor stuff on properties to make them more appealing. My multifamily is leased out and bringing in a 45% cash on cash, with the single families once occupied I'm estimating to do roughly the same.

I'm definitely excited to learn as much as possible, and look forward to meeting some interesting people!