All Forum Posts by: Bryan Devitt

As far as I have dealt with lenders they have wanted 2 years of tax returns and bank statements as proof of income for self employed. They also go off the bottom line number, not your gross. There might be other options out there, but I haven't pursued them

Those shingles are very common. the asbestos inside them isn't released into the air until the tiles are broken. If they're covered, there is nothing to worry about. It is costly to remove them, which is why almost no one does it.

There is a good chance they were painted for a reason and not refinished. There is at least a 50% chance that you pay $1k to strip them and find out they're ugly and need to be painted or gone over again. Just prep them properly and paint them again, it is the best ROI

Just to do the demo or to rebuild it?

Yes, start the eviction process. If they "don't know how this new system works", they'll try to figure it out real quick once that notice is given. 

You purchased the property and all existing contracts, including the leases. Thankfully for you, they already violated the lease so you can start to get them out

I hope you knock this out of the park. The additional numbers and info you provided look good if it all goes to plan. With you gutting the entire place there aren't many surprises you can run into though 

Markets go up and down, they don't go up forever. If you think this is the lowest price the area will ever be at again, keep it. If you think there will be another recession/depression in the future that would bring house prices with it, sell. IMO as a business decision, I would sell the house and take the cash. There are far better places to put that much money, esp when you spread it out into multiple properties, that will cash flow MUCH better.

Your rehab estimates are astronomical. $15k for carpet, paint and cleaning?? That is carpet, paint, cleaning and half a bathroom gut. For $60-70k you're talking about gutting the entire thing. If there is nothing major that needs to be done, $5 - $10k max to get it ready for another tenant. If you bump rent to $1800 then you're getting your money back after 1 to 2 years max. If it is completely outdated and you need new bathrooms and kitchen on top of the basic stuff, you better be getting great ROI before you drop that kind of money. Either way, raise the rent. Her having financial problems stinks but you aren't a charity (if you are, I'll give you my address). Everything costs more in life unless you live on a barter system. I would give her the option of getting the place refreshed and having $1800 rent or leaving it as is and going to $1600.

#1 problem is that you're under contract and you didn't have your numbers worked out first. If a fully rehabbed house is going for 95 and they want 80 for the rehab either you're getting screwed or you picked insane surfaces and fixtures that are way out of that houses price range. Also, don't do my rehabbing that isn't necessary until you get some experience and know your numbers better. It will take you longer to find a deal, but it is either that or lose money.

Make sure to check local laws. Some states have insane laws making it a crime to try to buy properties that are in foreclosure or might be in foreclosure in the future and the penalty is up to 3x the value of the property.