All Forum Posts by: Craig Willard

@Andrew Syrios  Thank you!

I am looking at a foreclosure on multiple duplexes, they are asking 150k each.  I really want to buy several of them but don't have the necessary cash on hand to put 20% down.  I do have enough to by 2 however I would like more.  I am pretty confident that I can get the units for about 115K each, they could use some work however all are rented.  Is it possible to ask the seller to make the purchase price 150K however agree to 115k essentially dropping below 80% of the sale price and not requiring me to pay the 20%.  Thoughts? Is this legal?

@Tom Scott I am a believer in flip and rent!  You can get property WAY under market, repair what is needed and then rent it.  The 2% rule is talked about often as a good measure however often super hard to find.  In a flip and rent situation, you will most likely bring in over 2%.  Something else to consider - If you are going to flip and rent, your investment in repairs will probably be significantly lower.  If you would naturally replace cabinets or counter tops to make a solid sale, you could potentially keep existing and save even more money.  I would never invest the same quality of material in a rental that I would in a fix and flip (another money saver)… The potential to make several hundred dollars per door is this way is higher whereas many investors just look for 100-200/month/door.

True story!! Stop the bleeding now...

Sure, I'm in!

Kathleen - not sure if you are talking about the Rustoleum product or not, I have heard those complaints before. I have had my counter tops in my personal house painted with Rustoleum Countertop restoration for over a year, heat does not affect them, it doesn't scratch and it is not chipping even with 2 children under 10. If someone has chipping issues, they probably didn't do a good preparation job.

The owner uses a real estate company to manage the property. I told them without better books, the price would fall dramatically. Rental property value is based upon its income and when your income statements are greatly flawed, value has nowhere to go but ...down..

I found a stash of duplexes that I have become interested in potentially purchasing. The numbers look solid at 13% Cap Rate. The 2% rule is at 1.5 and COC return is close to 30% (20% down). After feeling good about that, I request financials from one of the duplexes. The accounting work is crazy, for example, the units rents for $765 however the year to month end is $9900. I have a statement for each side. the other side shows year to month end at 6000. One would think that if you are really interested in selling your rental property, at least make sure the accounting adds up. Have any of you all experienced bad accounting when investigating rental property purchase? What did you do if you did experience accounting numbers that mathematically did not make sense? Is this a sign?

I am not sure if this is the same thing, I have used Rustoleum Countertop restoratation and really like it. It is only about $300 for 45 linear feet.

http://www.rustoleum.com/product-catalog/consumer-brands/transformations

The nice thing about business taxes vs personal taxes is that you pay personal tax when you receive the income. In a business, you make the money and then pay the tax AFTER deductions. A good accountant that knows the business can help you shelter it with deductions. You can also 1031 the profits as mentioned above.