All Forum Posts by: David Roe

Thank you for the reply, here where i am i know people on TDY that use AirBNB single rooms/shared house at $30-$60 a night vs a hotel room with a cap of $90 for government rates.  If people didnt want shared space AIRBNB and the other 5-6 companies wouldn't be in business.  It's popular for a reason.  Even a cheap $30 a night is $900 a month and there are single rooms that rent for $75 around me.  

Look at credit unions and find their investment property rates.  WPCU here in Dayton Ohio is 15% down at 4.75% with great credit and 2,500 for closing costs.  

You can buy a property with cash and rehab it with cash only put the house in one persons name like your wife or brother or father.  After the rehab is complete You can get the loan from your lender to purchase the house from them into your name only, long as the house appraises for the loan amount you're all set.  $70K loan with 15% down ($10,500) + $2,500 closing + $500 title +$450 appraisal = just under $14,000.  $56,000 cash out.  

On your second house repeat it.

My divorce really set me back into the stone age, had to pay to get out of a bad relationship and i'm still paying for it now. As far as family, time is the key not money, kids will remember the time you spent with them before they remember the trip to Disney or the game systems you bought them. I agree CC debt is a must to pay off, 18-30% just in their pockets is nuts. Other debts like house, cars, etc are ok. 1-5% is acceptable. I would never pay off a house if you are an investor unless you are making more than you need to live on and have fun. Equity in a house is just untapped funds that could be used to make more money. Like having the money in you mattress at home. Economics 101 is debt makes money, let someone else pay your loans while leveraging the cash flow into new investments. But in the end it all comes down to personal preference and what level of risk you are able to manage. I manage high risk multi Million dollar government contracts at work, so 100k house deals where i may have to borrow from 5 different people while having car loans, house loan and other debt, wouldn't bug me in the least.  -just my .02

Im going to bring this thing back from the dead here...    So here in Ohio thats 100% legal and doable long as you have a partner.   For example if your wife buys a forclosed house at $40,000 cash out of her pocket, puts $20,000 cash worth of rehab then sells said house to you for $100,000 (as long as it appraises for the 100k) You are able to cash out all of your profits and still keep the property for renting it out.  Key thing is your wife or partner would title it in their name only.  When you purchase the house from them you will have to title it in your name only.  And you're good.  Your wife gets her $60,000 investment plus $40,000 in profit paid to her, you will use an investment property mortgage on the property for my bank it only requires 15% down for single family and 20% for 1-4 unit. if this was a single family home you would mortgage 100k, pay $15,000 down $2,400 closing cost(my banks rates) at 4.75%   Total profits would be the $40,000 minus $17,400 and you're left with $22,600 profit plus you still own the property to rent out as a buy and hold.  You just have to make sure your new monthly payment and what you are able to rent the house out for makes since and you can still profit from holding the property.  

Dave-

Thats what i figured, last year when we thought we were going to have to move to Beavercreek we had two offers at 300k for the property, but then found out we didnt have to move.  We love the place but just wanted to update it with out pulling money out of our income or investment money.  I would rather update it after i have a few investment properties. Or pull out equity but that's not happening for a while.   And you're right, the comps in the area are horrible.  The house you're talking about with the 5,000 sqft is in need of a total rehab.  I looked at it since it's right down the street.  

Back in January I figured I would pull out some equity out of my current house I live in. I bought the house in March 2017 for $256,000 and it appraised for $298,000 when I bought it. The lawyer that owned in was already living in Texas with his new house and lawfirm and kept this house till his daughter finished school.  Got it at a good deal.  Zillow lists it today being worth $353,677. My plat was built in the 70s and my lot of land was sold to a contractor in 1986 and they finished my house in 1989 but on 2acres instead of the standard .48 acres in my neighborhood. Most houses in my plat are 2,600sqft and for livable space above the front door so is mine but I have 1,000 sqft of finished basement with a walk out back yard. So technically 3600 sqft compared to the rest of the neighborhood at 2600sqft.

I found 5 comps in my area with the same sqft close to the same age but i have more land, and they were sold for $290k to $350k. So I was sure I wouldn't have any issues, well long story short i first went VA and the VA appraiser Appraised my house at $268,000 saying something about appraisal rules have changed and that's all the house is worth. I submitted the 5 properties like mine from the 290k-350k that sold just weeks/months before my appraisal and she did not accept them. So i dropped the issue and decided to go another route, I was talking money and values to my normal local bank (US Bank) and the head loan officer at my location looked up my house and some comps and claimed she could get the value and loan at $330,000 with no issues. I told her I didn't want to go through the fight again but she insisted she could do it and do the appraisal for free on the house so i let her do it. Week later another appraiser comes, and few more days go by and they list the house as worth $278,000. The loan officer challenger the appraisal with local comps she herself looked up and they still denied the comps. What am I missing here? I know Zillow is not a binding appraisal system, but for it to be off by $60-75,000 in my price range seems off. Are appraisals getting tougher? The Zillow doesn't give my property any justice and the photos are old, we redid the flooring, paint and bed room sets on the third floor bed rooms and hallways, and basement has new LVT and paint and the bathroom was updated as well. I have replaced the kitchen with all stainless appliances, new AC and Furnace, and Water heater, new sump pump, new basement grinder pump, new pool pump, new pool cover, and done a lot of painting on the main floor of the house as well. Last year we also did about 15k worth of landscaping.

3721 Northfield Rd Dayton, OH 45415

https://www.zillow.com/homes/for_sale/3721-Northfield-Rd-Dayton,-OH,-45415_rb/

First off thank you for the response, i understand there are probably people out there that would want to attempt to use their families property for their own gains and risk them, i how ever am not one of them.  I wouldn't be asking the question if he wasn't interested in doing it.  And i would gain nothing in the deal until after the time comes for him to pass on.  The point of all of this is for him to benefit from it, make passive income and i get to know he isnt working anymore. If he can't do it then we wont be doing it.  

"IF" we did something with his property it could be under an LLC and the risk of him losing it would be low. And i agree with you that the paid off house is exactly like you said to him. It's a sign of achievement for him, but more so it's something nice to leave his kids when he dies. At the same time he complains all the time about having to still work to be able to do anything and is always trying to come up with some form of additional income. He does like the idea of real estate to achieve this. My idea was to leverage the equity in his home to get into a/or some cash flowing properties, i would purchase those properties and operate them and let him collect 100% of the cash flow from it or them. Then in the future when he does go be with the lord he will have left me not just one property but 2,3,or 4 that are cash flowing. For me its an equity investment and at the same time i help my father make passive income. I make enough money to cover him if anything ever went south, and he is on board with the idea and wants to do it. I'm just looking for the best way to do it.

I clear 150k a year with my W2 job, without side investments and have a 750 Fico, he has a 780 Fico but does have any income.  

I was looking for options and pros and cons as to each option related to expense not so much with emotions. Can he get an equity loan and i Cosign and use my income? Can he open an LLC and the LLC hold the property while i back the LLC? If he "Sells" the house to me or gifts it what's the best method and not pay the earned income?

My father paid his property off and just pays taxes and insurance.  He is willing the house to me when he dies (God forbid) and he continues to try to work these labor jobs that are killing him.  My idea is for us to pull out the equity in his property and buy him a rental property or two or muti-family that would cash flow enough to pay the equity loan and still leave some cash in his pocket.  But he works under the table and has little income and would no longer qualify for a loan.  Whats the best way to do this?  Should we transfer the property into my name, and I take out the equity to invest into other properties for him?  His place is worth $120k i could pull out 80% and use the money to get other properties.  What's the best method of doing this to keep from capital gains from a gifted house and such?  

Dave-

Co-Living…

I have seen a few posts here on this method but not as many as I would have expected. Most of the ones discussed here are house based not a building.  I have seen start ups in NY, LA ect of large buildings and rented by room, free laundry, free wifi, free corp cable, free common areas, free electric, gas, water, sewer, and trash; designed to be cost savings to high cost living areas. 

Here’s my spin on it, The area I am looking at is next to a major Military Base, 27000 employees with an addition to constant inflow and outflow of TDY personnel and people traveling for meetings and such. For Foreign Military Sales, Reps of those countries come to America for 12 month cycles of living/working here full time.

The Co-living idea excites me a little for this market, 30 to 360 day contracts can be developed for the incoming and outgoing of personnel from other countries, bases, and Contractors. These people are not going to furnish an apartment and sell it all off in 11 months when they pack up to leave.

So what am I gumming my mouth about here? I found a closed Assisted living complex (single building) with Kitchen, game room, Common living room, full finished unused basement, Laundry room, 23 bed rooms and 6 bath rooms. The building inside and out is in great shape just a snapshot of a 1970s home designs lol. The building is Listed @ $225,000 and the average rent for a 1 bed room apartment in the same town is $530 a month. Let’s say we pay asking price (never do it but) and we update the rooms, common areas and bathrooms. Then we furnish the whole thing, plan for maintenance cost and hire a property manager to operate it. I’m going to aim at an all price of $350,000 with $4,000 total operating costs per month

Local 1 bed rent is $530. Traditional furnishings of a 1 bed room apartment including kitchen can average $5,000 or more, Water/sewer $70 per door, electric varies but let’s aim for $75 per door, gas at $45. Average single bed apartment could expect $860-900 cost of living for rent and utilities and buying furnishings ect…

So we charge $950 a bed per month with 10% vacancy rate your still at $18,000 a month minus the $4,000 a month in expenses. AirBNB rate of $30 a night for a bed if you needed to rent for 30 days would be $900 a month. But a Co-living place like this with full kitchen, game room, Living room and more would go at a much higher rate.

I have a total of 3hours of looking at this concept, so what’s the big things I am missing here?

Dave Roe

I understand that process, only issue is that this area is going through a renaissance, each block has 1-2 houses in despair, some listed for sale as for closers some listed for sale as finished rehabs and are anywhere from 70,000 to 200,000 listings.  All of them are new listings with no comparable sales.  Zero comps to compare to.