All Forum Posts by: Edward Robinson

I don't think anyone really knows what's going to happen next year. I, for one, don't have 2020 vision

(Had to make the obvious joke when I saw no one had. Sorry not sorry)

Personally, my goal is to invest in such a manner that I really wouldn't have to worry about any kind of recession.

@Pat L. That's not a bad idea at all. May just have to do that

@Theresa Harris I sure will. The plan is to document my entire experience with my first house and rehab :)

I've been informed about the permitting needed by the contractor I'm going to be using. There is a lot that will need to go into this place, but that's all been figured into the budget.

As for whether I'm going for it, I went ahead and agreed to the 12k. Now I just need to come up with the money @.@

I'm not too worried about borrowing to do the renovation, I have private money helping me out. I only got confused when the realtor had tried to tell me I could borrow against tax assessed value. It would have made this a whole lot easier if I could do that and I'm grateful to everyone for helping me learn otherwise.

As to the 25 year vacancy, I wasn't really concerned about the state of things like plumbing and electrical because I was just assuming it all needed replaced anyway, so I never thought to worry about making sure it worked. (If this is me being colossally stupid, please let me know)

The duplex is in a good area of the city, near a really good park, 2 blocks away from the main road through the city and situated right in between both public and private schools. If I had to grade it, I would say C+ area.

I've already had 2 contractors give me an estimate and both came in around 45k so far. I was hoping to save some money by doing my own flooring, drywall, cabinets and painting which is why I'm estimating around 40k. My wife's uncle has been in construction for over 20 years and I could have him look at it Sunday, but I've been iffy on bringing in family because of the horror stories I've heard about going into business with family.

I dont want 1k to be the difference between getting started on this path and putting it off for another year like I've already done. I could maybe save that 1k somewhere else? I would gladly spend 1k if it meant having a cash flowing asset that would help me out.

That being said, I think I just answered my own question about whether the nickle and diming is worth it or not.

As to the tax assessed value my real estate agent says i could borrow against, that kind of makes me feel iffy about this agent. That sucks because I really liked her and was hoping to put her on my team as she also invests in real estate too :/

How would I be able to figure out the actual value of the property? Would I need to hire someone to look at it? Or is that a contingency I could put in a contract during my due diligence period that the property has to assess for the value i was quoted by the real estate agent?

Hey BiggerPockets, I could really use some help here with a property I put an offer on.

I put in a cash offer of 11,000 firm for a duplex that has an ARV of around 70,000 that will need about 40,000 of work and each side could rent for about 750 a month. The seller countered at 12,500 and I reminded them that I'm firm at 11,000. The seller then came back at 12,000 and wont accept less as they thought they could get 25,000 for the property and feel they're being more than reasonable.

At this point, the real estate agent we're both working through brought up that the Tax Assessed Value of the property is 47,800 and told me I would be getting instant equity at 12,000 and could pull some of that out to fund the rehad. I hadn't heard anything about the tax assessed value before and wasn't sure if that is what the home is actually worth? The problem I have is that this property is most definitely not worth 47,800. It hasnt been occupied in 25 years, has a damaged foundation, needs a new roof, needs electrical updated along with the central air units and furnace.

I guess my question is, is the tax assessed value the value I could borrow against or is it only used for tax purposes? Also, any advice on whether this is a good deal would be appreciated. This would be a buy and hold property.

@Ryan Valdez

Unfortunately, no deals yet. I'm working with little capital and am looking for the right deal. Currently I'm looking at doing a house hack by getting either a duplex or triplex. My interest is mostly in Multifamily, but doing either some flipping or even wholesaling wouldn't go amiss to build my monetary reserves. I'm trying to do the house hack quickly though before winter hits, so I can save some money to hit the ground running when spring rolls around. I'm actually going to a duplex that needs some rehab on Saturday to see if there is a deal there. I would like to use a 203k FHA loan, but if that doesn't work I have some private money I can tap into. Theres a very fine line I'm riding between trying to do everything right and just jumping in.

What are your interests in REI? There isnt really a good flipping market in most of Springfield as everyone is usually renting, though if BRRRR'ing is your thing you're in the right place.

@Ryan Valdez

Hey Ryan! Central Illinois native here. Glad to hear that someone else sees potential in Illinois. Personally, I'm from Springfield and have a few deals being vetted right now. If you're looking for a recommendation from a native, there is a lot of positive stuff going on in central Illinois.

Peoria is a growing city with an expanding economy, but that's all I'm aware of about Peoria as I'm looking more local in my own county.

I've only ever driven through Galesburg while driving my truck routes and it's a good looking college town but I couldn't comment on where its headed.

Now Springfield, it's an interesting city with a growing downtown area. There has also been a lot of money poured into both of the hospitals in the area, and both are expanding as well. Crime is a pretty big issue for most of the city. Some areas are better than others, but those areas can be only a block apart.

Property values ARE rising in Springfield but slowly. You should also keep in mind that Illinois has some pretty hefty property taxes.

That being said, there is a mass exodus of people leaving illinois due to policy changes, taxes, businesses leaving illinois and a history of having bad governors. Idk if you ascribe to Warren Buffett's idea to be greedy when others are afraid, but I personally feel now is a great opportunity to jump in and snatch up properties for very cheap, as people are motivated to sell so they can move. Houses for 50k can rent for 800 (VERY Conservative number), and there are enough run down houses that there is room for profit everywhere.

I guess what I'm saying is, if you're looking in this area, I dont believe you will be disappointed. Theres plenty of room for more people and if you ever need a local boots on the ground, dont hesitate to hit me up :)

@Melba Chambers

I had some time to look for and analyze some deals. This is the first time one has worked on the numbers side and I just wanted some input.

As to why I haven't seen it yet is because I was hoping to put in a "site unseen" offer and get it under contract, then do an inspection to see if my worst-case scenario numbers still worked.

Also, I'm a truck driver and not in town at the moment. If the advice is to try and look at the property I would schedule a showing if the seller allowed it. But they're selling "as-is" so I wasn't sure if they would allow showings

I attempted to get ahold of the property manager but he hasnt been responding. I can only assume that this isn't going anywhere as I'm not really comfortable spamming somebody with a bunch of messages trying to buy their deal.

However, I have to say I'm grateful to him. He's inadvertently brought me back to my original dream of investing in real estate. I still have a little ways to go in my personal life, but with the help of my friends I had that conversation with, maybe I could make something work.

Thank you guys for the advice, I hope I see you around the forums and that you have a wonderful day :)