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All Forum Posts by: Scott Dixon

Scott Dixon has started 14 posts and replied 188 times.

Post: Data Visualization and Big Data to Drive Smart Investing

Scott Dixon
Pro Member
Posted
  • Rental Property Investor
  • Champaign, IL
  • Posts 192
  • Votes 74

Hey @Jerry K.

I was speaking with some coworkers about this exact topic last Thursday.  They have some expertise in writing Python code and we were going to investigate making our own scraper. I will checkout iMacros and maybe give it a little test drive on the local county website.  

Sure you are under the same mindset but the sky is the limit for this type of automation.  If you can get the process from scraping > organizing/formatting > sending marketing > filtering calls all setup the scalability for such a system would be impressive.  How automated is your end-to-end process?

Thanks,

Scott Dixon

Post: Looking for Rehab Contractors in Peoria IL

Scott Dixon
Pro Member
Posted
  • Rental Property Investor
  • Champaign, IL
  • Posts 192
  • Votes 74

Hey @Venky B.

I only have one duplex in Peoria area and it is a fairly new place so I don't have personal experience with using local contracts for rehabs.  I do know there was a post a few weeks back from Morton, IL (Jason Mayhew) who had indicated we has done a number of rehabs in Peoria on the lower end properties and was inquiring to see if there were additional investors in the area who needed his services.  Might be worth a PM or call.

Best of Luck,

Scott Dixon

Post: duplex deal - need opinions on these numbers

Scott Dixon
Pro Member
Posted
  • Rental Property Investor
  • Champaign, IL
  • Posts 192
  • Votes 74

Hey @Brian Karlow

I have done a couple similar deals in the past a little further down state in Illinois.  Your numbers look fairly similar to a place I have in the Peoria area and the property taxes are almost exactly what I have been paying for 6 years now.  @Stephen Lovett was correct, the property taxes are a big issue when it comes to this type of property in Illinois and can seriously put a pinch on your cashflow.  I have been able to find pockets in my market where the property taxes are significantly reduced but the rest of the numbers look the same and the neighborhoods are great.  An example of this which I have found in my market is properties which are on a half lot have 1) a lower land assessment (obviously) and 2) also seem to repeatably have a lower improvement assessment.  This can make all the difference in the world when it comes to your cashflow for me I have 2 properties that fit this contrast well Property A I pay $7200/year in property taxes and Property B I pay $3000/year which as you can expect makes a MASSIVE difference in my cashflow comparing the 2 properties which have similar financials otherwise.

Best of Luck but I would keep pushing to find the niche in your market that can deliver strong financials but doesn't carry the HUGE property tax bill.  

Scott Dixon

Post: Looking for SFRs

Scott Dixon
Pro Member
Posted
  • Rental Property Investor
  • Champaign, IL
  • Posts 192
  • Votes 74

Hi @Bill Atkinson

Welcome to BP! Sounds like you are wanting to start finding properties for sale which are not listed at retail prices (99% of the MLS would usually be considered retails). There are several different ways to go about this and a ton of great posts, member blogs, BP blogs, BP podcast, books which cover this topic in great detail so I will just provide you a few terms to search and you will find all the information you could ever want right here on BP.

1)  Wholesaler - You are right if you could find a great wholesaler this could provide you a steady stream of properties which could be a good input into a fix/flip model.

2)  Motivated Sellers -  If you want to dive in you can start looking for the motivated sellers yourself but this is not a easy endeavor.  Whether you are posting craigslist adds, bandit signs, direct marketing, SEO website traffic, etc.  This all comes down to momentum and performing some or all of the above tasks in a consistent manner or a long period of time (greater than 6 months).  Once you get the momentum you will start finding motivated sellers.

3)  Network - This one could be the best way but again will take time. If you get out to your local REI club or speak with agents, investors, and property managers you will start to find a few people that will plug into what you are doing. Then when you prove you do what you say and perform in a timely manner you will find more deals coming your way.

4)  Websties -  There are numerous websites out there like homepath , HUD homestore, and Auction.com which still could have some deals.  

With all of these different paths to finding your next deal to fix and flip it will take time and effort.  Like anything that is worth doing you have to put in the hard work to reap the rewards.

Best of Luck

Scott Dixon

Post: Entering The Rental Market

Scott Dixon
Pro Member
Posted
  • Rental Property Investor
  • Champaign, IL
  • Posts 192
  • Votes 74

Hey @Nathan Gilbo

The strategy you are proposing is exactly how I started out and it worked fairly well. I stayed in the duplex I purchased with an FHA loan for a little over a year and then moved to a different home for my primary residence. After that first FHA loan you are going to have a hard time finding a lender that will offer any fixed-interest loan product with 3.5% or 5% down if you live in one unit of a 2-4 unit multi. This echoes the point that Nathaniel made above that the second property is going to be a bit tougher or at least take more down payment.

For most 30-year fixed conventional loans tied to investment properties you will need the following

Downpayment 

4 loans and under

Single Family = 20%

Multi Family (2-4 units) = 25%

5 loans to 10 loans 

Note: you will not be able to perform cash out refinances of these loans which could be a big hit depending on your strategy.

Single Family = 25%

Multi Family (2-4 units) = 30%

Reserves (Bank likes to see some funds in case of a rainy day)

4 loans and under = 6 months PITI reserves for the property you are purchasing and 2 months PITI for the other rental properties you own

5 loans to 10 loans = 6 months PITI for all properties

Credit Score Requirement  (sure this moves around with time and different lenders)

4 loans and under =  620 credit score

5 loans to 10 loans = 720 credit score

Lower the score is to the threshold the higher the interest rate.

I am not a lender and everything written above is what I experienced over the past couple years with 3 investments and 1 primary residence properties tied to 30-year fixed interest loans (1 FHA and 3 Conventional).

Best of Luck,

Scott Dixon

Post: Cashing out 401k loan

Scott Dixon
Pro Member
Posted
  • Rental Property Investor
  • Champaign, IL
  • Posts 192
  • Votes 74

Hey @Lane Kawaoka

I can't comment on other 401K plans other than the one I have dealt with over the past couple years with my employer.  In terms of the risk associated with a lose of your job this could be an issue and will have to be taken into consideration with your own situation and risk tolerance.  Nothing is 100% but for my job I feel that this is a risk that I was willing to take on for the associated reward.  I can get a "general purpose" loan which has the shorter term (60 months max) opposed to 117 months max for a primary residence loan.  The 60 month term is short but I take this into consideration while doing my analysis of the properties I am looking to acquire.  If the property can't pay for the 401K loan, 30-year fixed interest loan, insurance, property tax, normal repairs, and a little set aside for capital improvements then I won't do the deal.  With this said most of the cashflow gets taken up by the 401K loan and my cashflow doesn't really kick in till 60 months when the loan is paid off.  This is my own strategy and revolves around securing large assets (200K plus) with 30-year fixed interest loans all out of my own pocket without partners.  This is not for everyone but just my own personal strategy and what I prefer over putting all of my retirement in the stock market.

Best of Luck

Scott Dixon 

Post: Cashing out 401k loan

Scott Dixon
Pro Member
Posted
  • Rental Property Investor
  • Champaign, IL
  • Posts 192
  • Votes 74

Hey @Justin Cooke

For general purpose loans (everything other than primary residence) my company allows a 60 month term with give or take 4% interest being paid back to you into your 401K.  The only cost I have is $75 - $100 for processing fee.

Scott Dixon

Post: Cashing out 401k loan

Scott Dixon
Pro Member
Posted
  • Rental Property Investor
  • Champaign, IL
  • Posts 192
  • Votes 74

Hi @Lane Kawaoka stated I have used a 401K loan to purchase 2 multi-family properties and most likely a third in 2015.  I believe every employer can vary a bit but I am able to take out a max of 50% of the value in my 401k or a max of $50,000.  I also have a limit of 2 loans which can be taken out at any given time.  If your employer supports the 401K and you are responsible with your money this is a great tool to help new investors which might need funds to execute on a deal.

Best of Luck,

Scott Dixon

Post: Real Estate Lawyer vs Title company

Scott Dixon
Pro Member
Posted
  • Rental Property Investor
  • Champaign, IL
  • Posts 192
  • Votes 74

Hi @Joseph Wilson

Your real estate lawyer can help you with putting together your contracts and any other forms you might use/need while working as a wholesaler.  When it comes to closing a real estate transaction in the state of Illinois you will need to use a title company and the title company will perform all the title searches and provide title insurance for the transaction.  Hope this helps.

Best of Luck

Scott Dixon

Post: Buying proprty in Dekalb, IL to rent out to college students/young professionals

Scott Dixon
Pro Member
Posted
  • Rental Property Investor
  • Champaign, IL
  • Posts 192
  • Votes 74

Hi @Nye Eddings 

Although I don't have direct experience with student rentals at NIU I do have a handful of units down at U of I.  The experience has been a good one thus far but overall student rentals will demand more time for management.  My student rental turnover is considerably higher compared to traditional rentals and not uncommon for the majority of units to only have tenants for 1 year.  The obvious biggest benefit for student rentals is the higher rent compared to non-student rentals as long as the unit is in a good location. I would encourage you to continue to pursue getting local contacts preferably from someone who has invested at NIU for a number of years.  Things are changing fairly dramatically closer to campus down at U of I in terms of higher end unit construction and if NIU is similar you will want to ensure your plan takes this into account.  

Best of Luck

Scott Dixon