All Forum Posts by: Byron Stocum

@Jaron Walling Thank you.

I like that mindset. Is it a good flip?  Yes, it's a great flip.  I think after all the expenses and labor hours I should be able to profit. 

Thank you for your reply. I'm going to keep that in mind.  

Hello,

I'm presently refinancing my personal residence that I bought in October 2017.  Refi Rate of 3% and home value has gone up $110,000 that I'm working on cash out option.   Escrow fees of the refi are around $9500 that comes out of the cash-out payment. 

The house I'm looking to buy is right down the street from me. It's a complete fixer and it's fully gutted except for the drywall. I'm a contractor with one other full-time employee. I'm estimating it would cost $60,000 and 6 months to complete the job. The owner is a friend and will carry for 2 years (just in case something goes sideways) @ 7% APR, with $50,000 down, interest can accrue and be paid when the loan is paid off after I refinance. Intrest equals around $28,000 to the owner.

Here's my question: 

I'm not sure if both the original change of title and the refi of the fixer will both have closing costs and how much?  I feel like I might be paying $30,000 to closing costs (the refi my house, change title now, and at time of refi of fixer)? 

That would be $108,000 ($28,000 interest to owner, $30,000 for closing costs, and $60,000 to fix it up).  The home could be worth $425,000 once refied possibly more.  It has a lot of future value.  My thought is to AirBNB it. I could get around $150 minimum for it because of the view and location.  

What's going through your mind right now? 

Thank you for any words of wisdom.     

 

Thank you @Gavin Welch!!!

I responded below in the thread. It was suppose to be a response.

Good looking pod cast by the way. 🙌🙌🙌

Thanks again @Gavin-Welch 

Thank you Gavin.

Yes, we are actually planning on having a lawyer write up a contract between the investor and myself. I will make sure we hit those points you mentioned. 

One thing that we are both unsure about is how to split up our income and our expenses fairly.

As I mentioned earlier, I believe she will be the main financial investor in the property and pull us through any dips in rental income in the future. However, I would like to have some skin in the game.  

The property we are looking at is not currently on the market but my realtor/ investor knows they have been thinking about selling soon. I've been on the property 2 years back helping them build an ADU (additional dwelling unit) but I haven't seen the property with an investor's eye yet. We think we can get it between $700,000 and $900,000. With a 25% down and $50,000 in repairs (which is hopefully higher than expected). I'd like to come up with $50K- 75K as a partial owner. I'm sure I'll be doing all the repairs and prepping the rentals for new tenets in the future.

Our rental income in total should be between $7500 and $10,000 per month. 

The mortgage should be between $4800 and $6200. 

Sorry for the estimations but we're very much in the prep phase before we talk with the seller to start negotiating. 

Any advice on dividing these things up fairly.  

This week a very intriguing property just landed in our laps. My realtor is also an investor that found a potential property with 12 rentals on it. There are a few studios, a couple 2 bedroom and 3 bedroom units on it.  We're looking to purchase it as partners but I'm not sure what the best sort of partnership contract would look like. I don't think there's much work to do to this property as I know the owners and they are contractors themselves. In our partnership, I'd be the contractor that would keep the place running and do most of the sweat labor. My partner found the property and would be mostly a financial investor. I have the ability to find private money to invest in this but the interest rate would probably be around 8%.  

I don't have a lot of experience in investing in real estate yet.  I own my own home but that is the extent of my experience. 

I'd love to hear any advice you may have. What would your partnership look like?