All Forum Posts by: Cory Wells

Thanks @Sam B., The person could not find a loan to bring money to close, so the realtor is going to list the property on the MLS and see if they get any takers. The property will probably go to foreclosure at some point since he is no longer paying the mortgage. The realtor did not think it would be worth the commission to try the short sale option.

Being all in for 65K would still be on okay deal for my first - projecting $200 cash flow and a 9% ROI and leaving 20-25K in the deal after refinance. However, I wanted to shoot for 12% ROI and not leaving quite so much in the deal.

I have an off market deal I am looking at where the price I would like to offer is around 8-10K less than what the seller currently owes. I brought up the idea of purchasing subject to his existing mortgage from the realtor who is representing him, but they asked how would we report that at the closing table. So I am not sure if I can purchase this property subject to if there is already a realtor in place, or can I just pay them the commission outside the sale and not have an actual closing? The realtor has not listed this property on the MLS. Seller seems very motivated per discussion and is willing to just walk away from the property and let the bank foreclose. My all in price with rehab would be around 50K-55K, ARV is around 74K, and the rent is 800. My plan is to hold as a rental. Any ideas on how to make this work other than the seller bringing 8K to closing?

@Jeremy Woods I will be there. Let me know if anything changes on your end. 

@Jeremy Woods I am free also. Let me know the time and place and I will be there. 

Where I am located, due to state laws, I cannot use sites like List Source to buy mailing lists as they do not sell them. Therefore, I was thinking about using our local property tax website to create a list of 2-4 units that I could send mail to. I can use this website to locate neighborhoods in my price and rent range and then pull ownership info from that. On most of the houses I can gather the address, property value, year purchased, and number of beds and baths. My goal is to buy these properties as rentals using the BRRRR method. Currently, I am thinking I will pull the owner information and mail to addresses that have the following criteria:

• If the address listed is out of state
• If the address listed is local, but not of the residence in question(assuming this would mean it’s a local, possibly burnt out landlord)
• Properties that have the same mailing address, but have been owned at least 10 years. Is this enough time, or should I shoot for a longer period of time?

Is this good start or is there other information that I should be trying to pull when I compile my lists. I want to pull as much information so I do not have to go back through, but I also want to be efficient. This is all manual entry so I don’t want to type in every single house in the neighborhood if they just bought the house last year.

@Caleb Heimsoth you are correct that it is not a full Rehab. I am planning on 3-4K for exterior and interior paint, 3k for flooring, 4k bathroom remodel, 2K to paint the kitchen cabinets and install new counters, and then 2K for Misc items.

@Jorge Ruiz If I left around 6K in the deal, I would cash flow $100 a month and my COC would be 21.8%. So that would be getting into the deal for around a 10% down payment instead of 20%.

Here is a little more background info for everyone to double check my initial repair and expense numbers that I used so I can be more knowledgeable going forward The house is a 3/1 built in 1955 with 1100 sqft and it would be in a C neighborhood.

Also, what amount of cash flow and COC after all expenses is everyone seeing with 60-70K houses? Otherwise it looks like I am close, just need to find a house that I can push the rent up into the lower 800's and then I would over the $100 mark with a 30 year refi.

I have a lead on a house that I can get for 30K cash with an estimated rehab cost of 15K. The ARV is 70K and will rent for $750. My numbers look like:

Rent                            $750

Vacancy(8.3%)            $62

Property Taxes           $71

Insurance                    $58

Repairs/capex(18%)   $135

Management(10%)    $75

Cash Flow                    $349

Option 1: refinance at 6M-1Y with a  30 yr mortgage. Mortgage would be 283, which leaves cash flow at $71 and an infinite return

Option 2: When I refinance, I leave about 7-8K in the deal or whatever amount leaves me at $100 per door

Option 3: refinance immediately with a portfolio lender at 20 yr fixed. Mortgage would be 343, which leaves a measly cash flow of $11 and an infinite return.(not really an option at this point, but I don't see how anyone makes a portfolio loan work after their max amount of Fannie loans)

My question is should I shoot for $100 per door and pass on this deal if I can't get it for a lower price and all my money back, or go with it since my ROI is infinite? My goal is to get to 20 doors in the next 5 years or as quickly as possible with at least $100 per door and 12-15% ROI.

I have come across a portfolio deal with an investor, but I am not seeing how I can make their asking numbers work so I have tried to come up with a couple options to counter back with. Since they were already willing to seller finance, I am hoping you guys have some additional ways to counter to make this a good deal and to verify that my current analysis looks okay. I have come up with 3 options so far, but option 1 does not meet my minimum monthly goal of $100 a door, but the two other options are closer. I am wondering if I need to lower my asking price even more, but I don't believe he is super motivated and will accept a low ball offer.

All the homes were built around 1950 and range from 850-1100 Sqft. I have not done a full analysis of each rental to see what the deferred maintenance is as I figured that would be after I am in contract with the seller.

One item that concerns me is that I am coming up with an actual expense ratio of 55-60% instead of following closer to the 50% rule. It makes me wonder if I am off on my costs somewhere. let me know what you think