All Forum Posts by: Chase Webster

Google it...

Thank you all for your responses. I have been leaning toward selling, so this validates that decision. 

One consideration is that we could buy a home up to about $250K on a second VA loan without selling our current home. Would that info change your recommendation? I appreciate your response.

My wife and I bought our house in 2012 for $175K on a VA loan with 0 down. With the funding fee we ended up financing $178. We currently owe $136 and could probably sell somewhere between $200 and $210 in our current market, meaning that we might be able to walk away with a $50K check at least. The other option is to keep it. A conservative NOI is around $820 (accounting for CAPEX and maint/repairs) with a debt service of $825. The absolute max we could probably rent for is $1700, meaning we will be very close to breaking even. The house was built in 1994 and has the original AC, water heater, furnace (worried about that stuff in the next 5 years or so as well as a paint job on the outside eventually). Has a new roof that insurance put on in 2012. We are at a point that we would make around $5,000 per year in equity and $5,000 in depreciation. However, especially in the first couple of years, I don't think we will make much in cash flow at all (after setting aside $150 per month for CAPEX and maint/repairs). So, I guess my question is whether I should keep the house and rent it or if I should sell it, take the cash, and maybe buy something else. I feel like we are just barely on the line of this being a good decision, but I wanted to get other opinions. We are moving to Japan this summer, so anything I would buy would likely be purchased from out of state.

Thank you all for the advice. I won't be making an offer. I appreciate you all being up front and candid. Here's hoping for a good deal in the not too distant future.

Would any of your responses change if it were possible to get a rental contract from the current tenants and put off maintenance for one and a half months until getting back from deployment? Rehabs beside maybe the plumbing are not urgent... Not questioning your experience or advice, but just another thing to consider.

Today I located a property in my area for 35K from a wholesaler. The renters were paying 1000 a month until there was a leak behind the dishwasher and whoever was the landlord at the time took it out without replacement and lowered to 750. He does not have a copy of the current rental agreement, so I can't verify this except maybe to ask the tenant. However $1000 a month jives with the rent zestimate on Zillow. If he doesn't have a copy of the lease...then how does he hold the tenant accountable for payment......????? Says he does not have a rental history for the current tenants. Seller told me that he acquired properties from someone who left town quickly. I found the original owner's name online, but the seller provided a different last name, so I think she probably got divorced. She now lives in Texas, and I have tried to contact her for more info with no luck yet. He says the house "Needs minimal work, brand new roof, needs new AC, electrical needs in the basement." Also mentioned on the phone that there is a small leak in the basement that would need to be repaired as well. The property has a Zestimate of $88K. I know this is not always accurate, but until I get comps, it is what I have to work with, and even at $80K ARV, 70% would still give me $21K to work with on rehabs. If I refinanced at 60K I could still cash flow about $100-200 a month based on ROUGH but conservative (I think) estimates. Seller says he has two other buyers who have said they will bring earnest money on Monday and that he wants to close in 10 days. I understand he could just be saying that to rush me in to making a quick decision or simply to reduce his holding costs. I could finance with a bank or probably get together enough to pay cash. The property was listed on craigslist 6 days ago and is otherwise off market. I am thinking of trying to make an offer tomorrow or early Monday morning.

I know that I need to:

Get a contractor to look at the house and give me a rehab estimate (either before I make the offer or during due diligence period)

Get comps from a realtor for sale price and rents

Get an inspection

Have a survey completed (maybe?)

Have a lawyer look over my offer. (My mother-in-law is a lawyer, but not specifically a real estate lawyer. I imagine she could navigate a real estate offer. Am I wrong?)

I could probably get comps and a contract together by tomorrow.

My questions are:

Is this too quick? 

Does it seem like this guy is scamming me? 

I am leaving on a deployment with the military on 7 March. Do I have enough time to work my 9-5 job, do my due diligence, and get property management in place by then? 

Should I make an offer on this house now with escape clauses in case it starts looking shady? 

I am working without a realtor and have never bought without one before. What should I include in the contract (escape clause for maintenance?, survey of property?, escape clause for appraisal value?)? 

A realtor needs to be there for inspection correct?

WHAT AM I MISSING (aside from the obvious records that I would expect to accompany a purchased rental)?

This would be my first deal if I did it, and I don't want to completely screw it up, but the cash outlay looks like about $12K, so not really putting the farm on the line if it didn't pan out. Please respond quickly and specifically to each question if you can. Any added advice is welcome. Thank you.

Does anyone have any recommendation for general contractors or companies in the Omaha area? My criteria are speed of work and accuracy of estimate. I am looking for someone who is easy to work with that might be able to go look at properties with me.

Do any of you have any preferred lenders when making a BRRRR deal? Any banks able and willing to refinance without a seasoning period? How have you gone about finding refinancing? Have you just called the banks and asked the question? What type of bank typically fits the profile?

Sean Sullivan good to see you here. We should chat when I'm back from RF. You on the road?