All Forum Posts by: Brian Christensen

@Jeff Schechter

one of the reasons I’ve held off on turnkey is because of the fees. I get that they organize it all and it is newly rehabbed, however you’ll pay 5k organization fee, 6% closing costs, 2500 PM fee for tenant placement, etc. Maybe 2500 in PM fee is typical in Indy, but here it equates to the first months rent. I could pay 13k or more to get into the property. I might be naive about closing costs, so correct me where I am wrong with appropriate fees.

@Jeff Schechter I will definitely reach out soon. Thanks. Brian

@Peter Cung thanks for your input. I have been casing BP for info in Indy. You might be right in a turnkey first, just to get feet wet. I am looking for cash flow mostly, because I feel that a peak is coming and am not banking on appreciation. Many markets now are stalling.

I live in a hot market (Utah) where deals are more difficult to find. Turnkey has appealed to me because of the time issue and the long distance investing uncertainty. I would love opinions for a newby. In a turnkey market I can buy 2-3 homes (>80K ea). I have a sample of a turnkey here.

My parents own their property and have enough space to build a 4-plex. I believe they looked into zoning at one point and it was approved and now I want to look into building with my parents on their land. I need an estimate range on the cost to build new. They are located in Provo, Utah.

Thanks for any help,

Brian

following

I agree. Maybe a short term boon, but it comes, then goes. If some kind of infrastructure made an area more desireable and appreciates, then perhaps. But I cannot think of what that might be. Obviously Airbnb will be hot during that time. 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $114,000
Cash invested: $30,000
Sale price: $140,000

Primary home turned into lease option

What made you interested in investing in this type of deal?

First venture into REI. Market was down and we upgraded.

How did you find this deal and how did you negotiate it?

Walked by the home with for sale sign. They were moving and needed to sell fast.

How did you finance this deal?

Conventional financing.

How did you add value to the deal?

Renovated bathroom and kitchen

What was the outcome?

Great cash flow. No fixing as per lease option agreement

Lessons learned? Challenges?

Purchasers with poor credit. Took them too long to buy. That place now appraised for 100k more than what we bought it and our cash flow would have been $700 by now or paid off loan.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

On purchase.

Investment Info:

Single-family residence buy & hold investment in West Jordan.

Purchase price: $160,000
Cash invested: $10,000
Sale price: $250,000

Owner financed at 3.5%. Rented. Used Property Management (3 companies)

What made you interested in investing in this type of deal?

Owners were moving.

How did you find this deal and how did you negotiate it?

Relatives

How did you finance this deal?

Cash at closing.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

No agents.

The only benefit I can see is if the interest is treated differently between the home mortgage and the HELOC. The gurus claim that the HELOC computes the interest as a daily rolling average and the mortgage is assessed every 6 months. I don't know if this is true, however it would make sense that when you routinely pay down the HELOC, your interest amount declines and is not based on 6 month ave. [Perhaps akin to making an extra monthly payment on your mortgage, but accelerated to a rolling daily average]. If that assumption is true (which I don't know if it is), then I can see how it could be helpful, even if you did this precept with cash. It would mean that at the beginning of the 6 months, if you paid ~20K and then replenished your savings over the next 6 months, you mort interest would be based on (mort minus 20K).

Of course I spurred the discussion and I am now realizing, Real Estate can give better returns, albeit with much more work. Perhaps 20K into an investment is more advantageous that into avoiding mort interest. 

Thanks for your replies.