All Forum Posts by: Cory Dill

Thank you for the response and insight! I agree, I do not plan to back out of the conventional financing I am using to purchase the home. I was more-so asking is it advised against using private money for the renovation in addition to the conventional financing I am using for the purchase? To your point, I will likely end up reducing the amount of renovation we end up doing but wanted to see if there was any downside to also using private money aside from the obvious numbers I'd have to run to make sure it still met my return criteria.

Hello everyone,

New investor here. Closing on my first property this week. I got it off-market and at a great price. This is my first property and I am in on this with 2 partners who are effectively silent partners and I am running the rest. 

I am financing the property at 20% down and as a group, we should have enough to reno the entire property for 30k or so. This is about the ceiling for what we are looking to spend out of our own pockets. Some of the estimates I've gotten are between 30-40k for the renovation so this could be pushing it. My question is, would it make sense to utilize private money for the renovation? My understanding was it was one or the other because the entire purpose of private money is so you could refinance out immediately after receiving an appraisal and close out the loan. While if I move forward with conventional financing we'd have to wait 6 months for a "seasoning" period before being able to refinance. Is it advised against using both in a situation like this? Just want to make sure I am exploring all possible options. 

Thank you in advance for your time and expertise! 

Hello all,

I have been actively looking for my first investment property for the last few months and have had the opportunity to put in one offer so far based on what I am looking for numbers-wise. One thing that caught me by surprise was a "Broker Transaction Fee" of $995 in the buyer's agreement I was told to sign. I was surprised by this because I thought the seller paid for all commissions/fees on a real estate sale/purchase. When I asked about this I was more or less told that because they run the purchase/sale through the agent's brokerage firm it makes the process more efficient and there are all these moving parts etc. I have no reason to not trust this agent because he has been very good to me so far but there was no disclosure of this until I read through the contract. Is this a common practice? This fee amount seems a bit high, especially because my purchase price is 150k or less. Looking for any insight if possible! Also, I am in the Jacksonville, FL market if this helps given different costs nationally.

Best,

Cory Dill

Thank you for the input. I have considered door-knocking and other ways to find deals as I believe you are probably right. Any and all deals that fit my criteria are likely being swept up before they hit the mls or the day of as a cash offer. You also have me thinking about offers that have been sitting and could use rehab. Perhaps that would be the answer to the current market conditions. Thanks again!

Thank you for your response and I hear you. That all makes a lot of sense. I have tried sticking to my 10% number as a hard rule and think perhaps this is me trying to adjust my rules to the current market environment. I have spoken with a few co-workers who landlord themselves with a few properties and they've all said they hear from their tenants' max once a month. Which for an additional 10% in revenue sounds pretty fair to me. I am exclusively using Zillow and my realtor will send me properties through the MLS as well. Do you have another suggestion?

Hello all,

New to real estate investing and after running the numbers on dozens and dozens of properties, I’ve taken the step to get pre-approved for a conventional @ 20% (150k or less for property value) and am trying to find something that makes sense. I know we are in an inflated market but I wanted to see what numbers you all are using as your guidepost.

I'm having a hard time finding something that fits all of my criteria's. For reference, after covering the mortgage, putting 5% away for each vacancy, repairs, CAPEX, and 10% for a PM I am looking to have 10% on my COC ROI.

Am I expecting too much? Should I consider lowering that number or not have a PM since this will be my only property for now? After removing the PM from my calculations a lot of properties meet that 10% number. I suppose if I did this I'd need a solid team in place for when things pop up maintenance-wise. 

The goal is to get in the game, don't care about crazy returns but would like at least a fair amount of cash flow. Additionally, I'm looking in the Jacksonville, FL market where there are basically only condos at my purchase price which means HOA fees that eat up profits. Maybe I should look for SFH's instead? Would love to hear how you all have approached things, thanks!

Thank you Nathan. That is on my list to read next. I'll definitely give it a read and do my due diligence in an area I'm familair with.

Hello all,

New to BiggerPockets forums but have been lurking and learning for the past year or so. I'm currently in Jacksonville, FL, and am toying with the idea of long-distance real estate investing, at least to start out. I currently do not own any properties and I am moving to the Boston area towards the end of the year and everything I've seen tells me that properties there do not cash flow, at least not in the immediate area. I understand there are some towns farther out that will likely work out but I am ready to get into the game now. 

I would feel comfortable buying a property that cash flows in an area I am familiar with, even if it's long-distance if the numbers make sense. I am thinking about the town I went to college in, Gainesville, to be exact. It's a bigger name University and I have seen plenty of properties that cash flow and I would bet appreciation will work out in the long run too, but of course, I am not counting on that part. Would this be a bad idea? If the numbers make sense I don't see why it wouldn't work out. With that being said, I would love to be educated as to things to look out for or even reasons that would suggest this is a bad idea. Thanks for the help!

@Nick Riccio Thank you for responding! I am definitely taking that advice in that I want a team or group of people to work with who have done this many times over. I think that this will help eliminate or ease a large learning curve I would have struggled through if it were just me alone.

Hello @Will Fraser. Thank you for the information this is extremely helpful. I have just spoken with the first of many lenders I plan on consulting with in regard to this process. They didn't seem to have much experience in the house-hacking or investing space so I will continue taking your advice and look to find someone who has done this before with similar intentions to mine.