All Forum Posts by: David Shultz

I am - pretty - sure i can keep the budget to under $25k. However, the only way the numbers work is by me doing almost all of it in my own. I think this property will cover expenses and a mortgage if we can get one later. I will have to manage the property but that is part of the plan anyway. I should be able to make this property eek out a little cash flow. Even with this little bit of experience, I think I will make a better buy on the second property. Had to get my feet wet though and i am going to do whatever i have to so this first one works. Now time to tear down wall paper!

Hey there. I'm actually in the property now about to deal w carpet that was glued to the original hardwood floors. The loan is odd in that, we actually don't pay the principal. Its a way to give my grandmother some extra income and provide us with fairly easy access to cash. The loan will transfer to my father eventually, and we are allowed to restructure at that point. We are using this cash - enough for two $80k projects - to set create equity and create two cash flowing properties. Our plan would then be to get a mortgage for at least one of the houses and free up enough cash for a flip. But yes, the whole budget is $80k on this one. $55k for the house and $25k for everything else. I am factoring 10% of rent for repairs, property management and vacancy. $566 insurance about $1000 taxes and we still should cash flow even at the lower end of the rental spectrum ($900-1000). I don't think this is a home run but I think it will be a good one to learn with. I will be self-managing so the PM 10% there is just for budgeting purposed to make sure it would work if I chose not to.

A family member approached my brother and I, and offered us cash as an interest only loan with the idea that we would invest in real estate. We pay 5% interest on the loan. We took her up on the offer, started an LLC.

After making 8 attempts at making a purchase, we finally closed on a home. It's more competitive out there than I was aware of.

This first house is in a working class neighborhood, but very close to a cool/ up and coming neighborhood. It's a good neighborhood to rent in, but won't be a piece of cake. We paid $55k for the house, and don't expect to pay more than $80k for the entire project (closing costs, rehab, etc...). Needs a new roof, new heat pump, and a pile of cosmetic upgrades.

3 bedroom SFR are renting between $900-$1000 in this neighborhood. I think we will be at the higher end of that. At first glance - how is this looking to any of you more experienced investors?

We only take cash as needed, and thus only pay interest on the amount we borrow. Which, for this first project will be $80k.

We have have another $80k available to us, and I like the idea of finding another rental property with the same vibe. A place that we can rehab and add equity to, and also get a decent rent.

The next step is one I'm not too sure about.

What have we done right? How would any of you navigate this situation in these early stages?