All Forum Posts by: Devin Wanzor

I don't see anything that looks to out of line. Maybe a little high on the PM fees, but perhaps a little bit low on maintenance. I'd assume close to $6k per year for maintenance. Looks like a pretty solid deal if you like the location.

Ben Leybovich

I am looking at 15% + cash on cash returns when using a conventional 30 year loan. Couple that with the opportunity to buy homes less than 3 years old at approx. 85% of current new construction cost (still building and selling homes in this neighborhood) and to me it looks like a pretty solid deal.

Ben you are correct.

They are financed with commercial loans held on the books of a local community bank. I have an interest in the LLC that owns the properties, but no direct ownership to the properties (properties are deeded in the name of the LLC).

Still looks clear as mud, conflicting opinions. Anyone else offer insight on this question?

I currently have 9 properties that are owned in a partnership with one other individual. We own the partnership 50/50. Of of the 9 properties, 6 are financed on a commercial loan together, and the remaining 3 are financed on a commercial loan together. The loans are in the name of our LLC and we personally guaranty the loans. These loans do not show up on our personal credit reports.

I am wanting to buy a SFR as a rental in my own name and finance via a conventional mortgage.

I am having a hard time determining if I am going to run into the "4 financed properties rule". Can anyone clarify this for me?

I have ownership in 10 total financed properties (my primary residence is financed on a conventional loan, and I own 50% of the 9 properties financed via 2 seperate commercial loans).

Thoughts?

I am targeting single family houses in a new entry level neighborhood near where I live. The neighborhood still has ongoing construction. Buying new from the builder, the homes are selling for $147k to about $165k.

I have my eye on 2 existing homes in this neighborhood. Both are currently listed FSBO. Both homes are exactly the same floor plan. Both homes were originally purchased about 2-3 years ago for $149k and cost to build this floor plan new right now is about $152k to $154k.

Both of the owners are asking in the mid $140's. They realize they are competing with new construction and also the target market is first time homebuyers. Both sellers assume they will have to pay some closing costs for a buyer in order to sell their homes. Both sellers owe exactly $139k on their homes.

It is eery how similar the two deals are.

So here is the issue:

Neither homeowner is in any kind of financial hardship so a short sale is not on the table. Both homeowners have already communicated to me that they will take an option that has them walking away with no funds out of pocket.

The only option I really see is to offer a contract at their payoff amount ($139k) and also pay all of the sellers closing costs (no realtor involved to seller costs will be minimal).

The problem is that my target buy price for this neighborhood is really in the $133k range and below.

The homeowners want to sell and I'd like to buy, however their current mortgage amounts and lack of financial hardship seem to be a roadblock to me.

Does anyone see any way to help these people sell and help me get a little bit better price?

I plan to either hold these long term as rentals or potentially do lease option deals to aspiring first time home buyers.

Thanks.

Hi, my name is Devin, 28 years old, and I'm from Tulsa, OK. I've been a real estate investor for about 3 years. I've also worked as a commercial banker for about 6 years now and it is that line of work that first exposed me to REI and taught me most of what I have learned.

So far my portfolio consists of 9 condo units. Stats are as follows:
- Total cost of $317,500
- Total market value of $365,000
- Annual rents of $77,280
- Annual net cash flow of $14,000 after debt service
- Annual NOI of $38,696 (12.2% CAP on cost basis)

There are still plenty of these condo deals out there to pick up, but I am a bit leery of the long term value of the units, plus the turnover seems to be fairly high. Lastly, because I also have a "day job" that requires at least 50 hours per week of my time, I am trying to refine my strategy as I move forward to manage my time requirement. I do all property management and plan to always keep it that way (I really enjoy that park of the business).

Right now I am contemplating moving into SFR deals, simply because they produce more cash flow per unit and assuming I want to retire off my portfolio someday, I'll need less SFR's as opposed to condo's to reach my income goals.

The SFR's I am looking at are as follows:
- built from 2008 to 2010
- Cost to build new from $149k to $155k (same cost to build now)
- Target acquisition prices of $133k to $139k (through short sales and FSBO's)
- Monthly rents of $1,200 to $1,350 per house
- Annual taxes of $2,000 per house
- Annual insurance of $900 per house
- Maintenance should be lower than normal for awhile due to age of houses

By my calculation, I am looking at being in these houses at CAP rates between 8% and 8.5%. This is much lower than the CAPs I am currently achieving on my condos, but to me it feels like a good tradeoff given that the houses are in very good areas with potential for appreciation, good school, should attract good longer-term tenants, etc.

I have also kicked around the idea of doing lease options on these houses and trying to sell for $10k to $15k profit within a few years but I am the type of person who really hates to sell anything and my end goal is buy and hold.

I would be curious to her what other experienced investors have to say about my desire to move up the food chain a bit.

Thanks!