All Forum Posts by: Drake Espenlaub

@Wayne Brooks when I did the contract, I did it as interest free, with a purchase price of $30,900. Essentially it is principal payments only of $515 until it is paid in full, there is roughly 27k left due on the note.

Earlier this year I purchased a property from someone who wanted to get rid of it fairly cheap. It is not in the greatest shape, but he got me in touch with someone that had been asking him about renting it. After I purchased it from him I met with this man and his wife, and discussed why they wanted it, what they can afford, and came up with a plan to sell it on contract which would be good for both parties. 

I gave them two payment options and they chose $515 per month for five years or $30,900 whichever comes first, said he would pay extra when he got his tax returns (which I am yet to find out if it is true or not only having it for 7 months). I have had it 7 months and it is good income for me however, I am in a spot where I gave a friend 30% of the deal to purchase it, he has moved to chicago and asked I buy him out, and I have a duplex under remodel I could use funds for. 

Anyone have an idea of how to calculate the sale of the contract? I was thinking 17k to purchase 10k in profit over the next 4.5 years?   If there a more simple way to figure a sale price?

@Joe Villeneuve you reccomend taking that to a real estate lawyer and having them do the appropriate forms. Also, in said contract it would just be in case of default the llc is returned to seller with all contract/assets.

I am a broker and have a client who listed his paid off investment property with me. His family is wanting to purchase a nicer home and in effort to get money down he is selling a ran down rental. He has someone contacting him to purchase the home for $700 a month for 3 years. The home is currently rented for $550. 

I offered my seller $10,000 cash to assume the risk of the deal in which he is likely going to take.

I know we shouldn’t assume..but I am talking with the potential contract buyer who sounds stand up. So ASSUMING he can come up with $1,500 down, and the $700 a month I would be willing to sell it to him for 25k. 

This would be my first wholesale/contract deal 

Best way to work this deal? Buy it, lawyer write up a contract sale document, give new buyer equitable title and move on?

Main question, how much debt should one carry to acquire more property, if any? Not income producing debt, I am strictly talking small payment debt. Car, cc, student loan. If you have a refi cash out, should you wipe all that out before making another purchase? Interested to hear who would go against a Dave Ramsy train of thought?

I am going through with my first cash out refi on a duplex. I have used most of my cash to get it up for remodel and carried some on cc, and refinanced an inexpensive paid off vehicle to complete the job. The refi is looking like it will be anywhere from 31k-40k cash out. I don't like the feeling of looming debt, however can I do more with the cash opposed to paying off the debt. Interested in thoughts. 

The debt looks something like this.

$4,000 on a 3% vehicle loan that is $150/mo-my mind is made up I am getting rid of the vehicle with a different plan, so this will be gone for sure.

$6,500 in cc debt. 

I also own another duplex on a 3 year ARM that I have had for about 5 months, I subject to borrowed on it for 32k and will want to refi it in the next year out of the ARM, would need it to be around 28k on the loan. I was going to put down 5k on that principal for the future refi.

Have another duplex that needs about 12k of work done before it can be rented.

That would be an interesting % to know about the sites users. However, I assume a lot of the FF investors won't be as active. Personally not financially free, but on a good path to be, it is all relative, if I had a family I would be much further from financial independence, but if all stays the same I could quit my job now and live comfortably. 

A question I would like to know is how many are financially happy/satisfied. I was just able to demote myself at work bc I have replaced enough income to slowly back myself away from a "job".  I am taking a $30,000 taxable pay cut (net maybe $20k), and replaced it only with $6,000 net. However I have freed up 10 hours a week, 40 hours a month, 480 hours a year. That's a lot of time which has a high cost to me, with that time if I find just one deal this year it will have paid for itself. Although not free, I have freed up almost 500 hours to get back to myself.

I was always going to invest in real estate, after starting to truly despise my job within the last year I decided to ramp it up. Bought my first duplex almost exactly 11 months ago to date, I then bought 2 more shortly after.  1 cash flows around $500 a month, should go to $650 after a refi, my first purchase is on the market for $750/$1100, when it rents it will be $1500 in cash flow and I will be at a dollar amount per month that I need to be at to live my lifestyle enjoyably.

It is cool to read how relative all of this is, there are people brining in 20k a month that want more, then I am sure there are plenty on the same side as me. Where if I can create 4k cash flow a month net, have $60-$100k cash liquid from leverage of those properties in the bank or other assets easy liquidated; I will be completely satisfied from there. If I create new expenses (kids, family, car, boat) negative assets, I would ideally like to purchase a property before gaining that expense.

What a thought for a 16 year old! Awesome, not sure if anyone has said this yet and it may be common knowledge, my advice is to build your credit as soon as possible. Don't bury yourself in debt, but make sure you are utilizing credit and paying it off showing the ability to do so will help you in your path to purchase your first property. A lot of problems with first time home buyers are they do not have the credit to make the purchase.  A lot of times it is not the score but the history, just be mindful but at the same time not shy about using and always keeping credit paid down or off.  Student loan debt is a large crutch. Although college is great make sure it is being paid for in other ways than loans. 

It is hard to say where the market will be in 2-4 years when you are ready to make your first purchase. If all stays the same (which is likely will not) look to take advantage of first time buyer hud homes. I would not do a flip for your first investment, get your feet wet with a stable rental that maybe needs some updating you can do to "learn the ropes". If the first time home buyer advantages stay in place utilize those to your advantage. Be it homepath or other foreclosures that offer to only first time buyers. 

Like others said I think the main thing is that you are inquisitive now, shows you will likely make it somewhere, good luck!

Research the site and you can find the information to get this question answered 400 times over.

I purchased a duplex and I have completely renovated it. Without dragging the post out too much, it was essentially a gut remodel (saved cabinets with paint), new bathrooms, new hvac, new windows, new flooring, new paint interior/exterior. I would say the project is 85% complete. 

The upstairs unit will be finished in the next week or so, my plan is to continue to live and work on the downstairs unit. Which has probably a month of work left at a slow rate (working when I get off work). Basically what it needs is trim, new doors, interior patching and finishing items with moldings etc, and a little exterior work.

My question, I have contacted a couple different banks to start the refi process. I have decided to do a cash out refi, in which will give me a proper appraisal of the entire property, not a "drive-by" appraisal. Curious if anyone has ever done the refi a little early? If they ran short on cash and needed to do it to complete, or another situation?

My situation is I am switching jobs internally with the same company, however I am taking a 50% pay cut and don't want to risk my debt to income ratio on a cash out as neither unit is rented just yet. I am able to show my last two pay stubs at my current rate for another 2-3 weeks.

Just looking for advice basically on if your home is lacking a few minor finishing items if the appraiser will do anything subject-to or if it is what it is. I realize this is probably extremely appraiser based, but just want to get an idea if anyone out there has done this?

I called a couple smaller firms and asked if any held real state investments. I ended up talking to an assistant at principal tax group who said the CPA does hers (and she held property), I met with her and she seemed to have good advice and a know how. I was told she also has properties, I made an appointment to have her do mind in late Feb, will follow up and let everyone know my thoughts.