All Forum Posts by: Philip Bourdon

Sam, this is a people business and this is a forum with people having many different opinions. Though I understand your reaction to some of the comments, to lash back out at individuals who don't think your approach is good is not going to help. You're getting all stirred up and then attacking them. No matter how much you think you are justified in doing so, you are lowering yourself to a "street level" communication that is not going to help you gain advice.

One time another BP guy made a comment that shook me up. I e-mailed him and discussed it there. I did not feel that a public forum was the place to exchange feelings. He appreciated that gesture.

All in all, it appears that the group is telling you that the MLS approach is a difficult one, yet not without possibilities. I would suggest focusing on the subject matter and not getting so personal with anyone - even if you feel that they were to you. Take the high road; this is a people business.

Hi Jeffrey. Feel free to add some insights!

The lady's cousin thought that someone was seen snooping around and the door was open with no lock. He thought that a neighbor called HUD - I HAVE NO IDEA! It's not a HUD house, that I know. Why their lock? Who knows. It did add to my credibility, I can tell you that.

Great feedback. Should I talk to the lienholders? I know one is water which must be paid.

Scott, thanks for that advice. I'll do so (re: liens). The purchase price? She just wants it off her hands. How about $1! No need to reduce!

Very good idea. I know that most craigslist ads just give a total rehab cost. it looks like a hopeful guess to me; this is with groups that are selling some every week! The credibility aspect is important.

Thanks

Scott, thanks for the reply. In no way shape or form is a rehabber with any sense or experience going to try to resell here. Pittsburgh in general is more of a rental area and for sure in this neighborhood.

From the homes I have seen here the unfinished basement is normal (Again, this bathroom is a separate room in the basement). I also recall a few years ago, looking at a duplex just a couple of blocks away that had both bathrooms in the basement; it may have been a finished basement.

At least from my point of view having to go from the second floor bedroom to the basement to use the bathroom is a PITA with no pun intended. I would not touch this one myself, but is there a chance that an investor would?

Almost a year ago, when I was considering wholesaling, I drove through Pittsburgh neighborhoods and would send out yellow post cards to owners of empty houses.

I changed my mind about wholesaling, but a lady called me who was in the process of trying to find the will after her parents died. Recently, her lawyer called and asked me if I was still interested. So, I asked to be let in.

This morning I met the daughter at the house. Funny, she said there was a lock on the door and she didn't have a key. It looked like a HUD lock and I have a HUD key, so VOILA! Open says a me (how is that spelled??).

The house is a 2 bedroom that is 870 Sq Ft. It has a decent size living room and good-sized eat-in kitchen. It has a garage that needs some work. The siding is dirty but in good shape. the windows seem OK as well as the roof.

It is in a rental area with more than a few homes a block or so away that are simply deteriorating. So, even though the parents bought this in March of 2006 for 59K, I see it more as a 50K ARV.

Of course, as my title says, the only bathroom is in the basement. The basement is unfinished but the bathroom, though needing to be replaced, is a separate room.

To add to this, there are about 8K in liens (water, taxes, etc.). The daughter doesn't have the money (here sister died giving birth to her third child so the parents bought this house for the son-in-law and the kids. Son-in-law goes back to drugs and takes off. Kids move in with Grandparents. Grandparents get sick and die about a year ago. Guess who has been the Mother of the kids?).

She simply wants to get rid of the house and the 8K in liens. I seemed to have developed her trust. I even said she should change the lock. I thought it better to build more trust than have access. I have to consider wholesaling this.

Looking at it as a rental rehab, I am figuring costs to get it ready as between 12-15K (rugs, paint, new kitchen and bathroom, new furnace, repair garage and cleaning outside).

I would be more than happy to make 2K on the deal (In response to a question from her and her cousin Joe who later showed up, I said I sometimes arrange to have buyers and sellers get together, which she would love for me to do).

That means an investor would have to start with, 10K in costs even before any rehab and closing. If I use 50K as ARV (Better to be conservative) and take 70% of that, it leaves me with 35K. If I subtract 15K for rehab, that leaves 20K. Even if I am off in the rehab, there is some room.

Even if the bathroom was not in basement, how do these figures sound for a wholesale? BUT, does the bathroom location negate it all?

Oh yes, rent there would be between 500-550.
I really am not sure how to calculate the cap rate on this. Based on Gross income or what?

VERY LONG. Thanks for reading and looking forward to your responses. Honestly, I would even hope I can help her out even if I make nothing.

Correction, the Lawyer COULD set me up with an LLC.

Hi. I will have over 50K that will be distributed from my 403b (I'm over 59.5 so no penalties). I am considering buying and holding a multi-unit (they can be found cheaper in Pittsburgh and rehabbed for under that).

I have been reading here that if I create an LLC, most, if not all banks will not refi down the line. I am working on my credit score and in two years or so it will be much better. Sooooo, is there another entity that will enable me to get a refi down the line?

What had appealed to me with the LLC at first was checking capabilities. I consulted with a RE Lawyer who set one up for me at about $1000- So, what other choices might I have?

Thanks,

Philip

Hi. I am looking at a possible wholesale deal tomorrow in Pittsburgh that is a small, 2BR in a rental area that was bought for 59K in 2005. The are liens on it for about 8K according to family lawyer.

First, how do you figure out if t would be a good rental? I understand how to compute for a flip,but am not sure about rentals. Does one do a cap rate calculation? What else would make it a good/bad deal? I have no idea about how much rehab is needed yet.

How about the liens? At the level of reseale value I would think that 8K right off the bat essentially disqualifies it. Namely, let the estate pay for it.

Again, this would be a wholesale deal as I am not interested in this for my own buy and hold.