All Forum Posts by: Charles Montgomery

Im looking for a home for our family. The home is in a new subdivision with new builds and a lot of empty lots with homes going up. All are custom homes by different builders that have to meet architectural reviews.

The house we like in our price range happens to be the smallest house on the smallest lot in there. It is a new build with tons of upgrades. 

My question is based on values when I decide to sell. This house is at $165'ish sq ft. There were three other houses of similar quality but 400-550 sq ft bigger that went for $140 sq ft last year.

The one we are looking at is 1450 sq ft where others are 1700-1900 sq ft (all 3 bedrooms). Their price ranges are from $279K-$290K for the ones for sale. The one we are looking at is $240K

Is this a good investment?

Im not a flipper. Im a home buyer. I have a question. The home market is hot in my area. Houses in neighborhoods where prices were $160's last year are now in the $220's. Where it used to be $350K, its now $450K. Its insane. Not only that, they are gone in minutes of being listed.

My question. Would it be good to rent for a year and let the market cool off, then buy? Or are we risking interest rates increasing? We sold our house and have been looking for a month - putting in offers and getting outbid. But...our house is sold so we are free to do what we like.

I wish I knew how to rehab a property. There's a couple on the market that I love, but never really looked into costs to fix them.

@Amy Edinger any of those in Mobile or Baldwin Co?

When is the next meeting.

Thumbtack is great. It will also be a round for a long time to come. That's because Google Ventures backs the company. It is Google's version of Angies List that focuses solely on handyman type services.

 This is another source of confusion. I do not have the investment to put $150K into a house. That was an example. But, I could finance and that brings up another situation.

You say I would be in a better position with a mortgage? Im very conservative and financing is scary. If I financed a property with 20% down, I would have 20% equity, but that really means nothing to me. This s confusing. But again, I have never invested in anything.

Say some one bought 10 turnkey rentals for $70K each. That would be $140K in down payments on a conventional loan and $140K in equity. That equity is only as good as the ability to get out of the house at a later point, right?

I guess you could try to cash flow ~$150 month per house and you would have $1500  per month in income. Im just trying to weigh the risks of financing, equity and the reward of cash flow.

I dont really understand equity, especially on the buy/hold strategies. It seems like equity is subjective and speculative.

For example, reading some of the BRRR threads. People talk about Cash out refinancing for 70-80$ LTV, leaving the investor with 30-30% equity. But, does equity really equal wealth?

If I buy a house and rehab it all with cash, say $150K total, and that house is worth $150K. I have 100% equity. But do I have wealth? Great, I get cash flow from renters, but if the home loses value,, I still have 100% equity, its just that I have 100% of a lesser value.

I feel like I am overthinking. Just trying to figure out if buying some turnkey rentals is a good place to have my money tied up, versus tying the money up for shorter periods of time by flipping.

Ive tried finding wholesalers in my area. All the ones I find want me to join their email list or website so I do, and I have only seen 1 property from the 5-6 so called "wholesalers" in my area.

Really,, I wanted to go through the process of finding a home just for the experience of going through the entire process. Im some one who wants to understand everything, even if it is something I let others do for me later.

Im looking in Mobile, Alabama and Pensacola, Florida. Looks like REO, foreclosure, AS-is on CL and others are all near retail. According to the book by J Scott, that is a bad sign.

I am looking at properties to buy. This will be my 1st investment, I have been looking for 3 weeks, spending countless hours trying to get a feel for what a good potential property would look like,

In every case I find a property, looking at recent sales in the area, the house is basically retail. I am looking at REO, Auctions, Short Sales, As-is and so on.

My goal is to rehab and flip the 1st 4 properties to generate more cash, before going buy/hold.

Here is an example. This house looked good http://bit.ly/1OxkhTw But looking at the recently sold properties in the neighborhood, I dont see how it is a good deal. This one looks better based on comps http://bit.ly/1RUVH5q, I guess.

Am I doing the right thing trying to find properties below retail as the book buy J Scott suggests?