All Forum Posts by: Chad Huffer

Hey guys,

I'm working on my first deal and would appreciate any advice.  

I've got good credit currently 793 credit score and a total of about $119,000 in debt.  I also have a good annual income between my full time job and other sources of income, however, I don't have access to liquid capital at the moment and need to move fast to make an offer.

I'm looking at doing a hard money / REFI for the purchase and rehab to get them purchased and finished.

The property is a duplex that was foreclosed on after being dried in.  A small developer lost the whole subdivision after partially completing it.   All the interior framing is in place with rough electrical, HVAC and plumbing.  I've had 2 contractors check it out to provide estimates to complete the interiors (still waiting on those numbers but my agent is estimating 30K).  There are 2 adjoining units and 1 unit that is attached to a currently occupied unit.

I've had  a rental property in the area for the past 11 years and my property manager was saying they can't keep enough rentals, so I don't foresee any problems with keeping it rented.  

I believe this deal makes sense as either a flip or a buy and hold but I think I prefer to buy and hold initially.  I would like to build up a good base of passive income before beginning to flip properties.

Each Side is:

• 1575 sqft
• 3 bedroom
• 2 bath
• 1 car garage
• Projected rent is $1150.00/mo

Below is the numbers I've put together so far... Does this look right?  And more importantly do you agree that the deal makes sense?

Here are the number per unit:

• Vacancy rate:    4%
• Purchase:          $35,000
• Repair:              $35,000
• Mortgage:         $385
• ARV: $120,000
• ROI: 41.67%
• NOI: 8,286
• CAP Rate: 11.84%

Thanks for the input on this one guys...  Unfortunately  I was a bit late on this one.  Someone picked it up before I did.  However, hopefully I'll be better prepared for the next one.

I think I may have found a good deal, however, I'm not sure of the best approach to finance.

Background:  I work a regular 9 to 5 with pretty good pay and have a credit score around 795.  Currently have two rentals one has been been rented with zero vacancy for the last 15 years and the other is just about to be placed into service.  There is a mortgage on the first rental with maybe only about 25K equity at the moment and the second rental has no mortgage.

Possible Deal:  5K plus square feet with 24 acres close to a small college town built in 2003 4 br 4.5 bath with 3 of the four bedrooms having their own bathroom.  It does need very minor repairs but nothing major.

It's currently owned by the bank and I believe they would accept around 333K. I believe that the ARV would be at least near 500K.

Problem: I'm not familiar with attempting to finance a REO property and I know that most bigger banks will probably not even entertain the idea since I don't currently have the 20% down payment available. I've thought of trying to do an equity loan on the second rental I have to cover it but not sure if that's a good idea or not.

Anyone have any thoughts or ideas?