All Forum Posts by: Curt Neider

Roger, 

It depends on what kind of an investor you want to be and the kind of ROI you are looking for. Is $333 a month the only benefit that you see? Consider if any tax benefit is available, such as a 1031 or Cost Segregation. You would also make another $4,000 in year one from principal payments, and you need to consider what the appreciation may be. If you are buying high, it could be some time before you seen any appreciation. If you are getting a decent deal, you may get some extra appreciation. Based on inflation alone, you ought to be able to get another 1-2% ($3,500-7000) a year in appreciation.

To me, and it's a strong basis for whether any upgrades or repairs can be done, is how quickly can you get your invested cast back out of the property? As long as you have a big chunk of cash invested, you are limited by your ability to grow your portfolio and there is an ROI evaluation. As soon as you can get your cash out, your ROI goes to infinity and you can move on to the next project.

Again, it all boils down to what kind of an investor do you want to be? 

Good luck! 

Curt

Paul, 

That works out great for "back of the napkin" math. In reality, you'll want to consider closing costs, finance fees, interest, etc. because these can add up quickly. Even in an "all cash" scenario, you would still need to build in some buffers. 

Good luck! 

Curt  

Depends on the rehab. What is the budget for renovation? 

Also, the answer depends on your personal expectations as well as your cost to carry. 

It really depends on what your long term goals are, but if you are hoping to acquire and build your portfolio, my opinion is, CASH IS KING! Hang on to it and leverage that cheap HELOC $$$.

Investment Info:

Single-family residence buy & hold investment in Lehi.

Purchase price: $207,000
Cash invested: $1,500
Sale price: $289,000

Bought in 2007 at arguably one of the worst times. It's one of the things I love about real estate. They aren't making any more of it! Time can heal all wounds (unless you are financed wrong...)

I rented it out at a break even for a short period. Turned a small monthly profit for a while after that and cashed in at a time that worked for me. It would have a lot more equity in it now, but I am happy with the investment I rolled the equity into more.

What made you interested in investing in this type of deal?

$1000 deposit and then waited for 9 months of appreciation while I waited for the builder.

How did you find this deal and how did you negotiate it?

Through good connections.

How did you finance this deal?

Conventional

How did you add value to the deal?

Realtor connection

What was the outcome?

$75k+ profit

Lessons learned? Challenges?

Buy more!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Jimmy Rex in Utah.