All Forum Posts by: Exo Dallas

In your lease, it should state that the lease automatically renews for 1 month UNLESS either party sends a certified written notice to NOT renew (30 day notice). For lower income areas, this is the way to go.

I've been debating this question for the longest time, please give me you input (pros and cons). One of my targeted market for SFHs are 3bd/2bath in working class neighborhoods. The issue is that most of the houses in these areas are RENTAL houses and will probably will always be rental houses (ie, you will make more renting them then fixing, flipping them). I'm a buy and hold guy. How long am I holding??? At least til I pay it off the mortgage, which is about 10-15 yrs.

The houses usually, runs about $65K (that total cost, purchase price, rehab, closing costs, holding). And they rent for about $1000. My credit is great, 790's range, and I can get these at about 6% mortgage rate.

So, my question is this. Is it wise to invest in these houses, if the only option is to always rent them???

Thanks!

Exo

Nationwidepi - You are correct and I wasn't very clear.

Comps will be more for the larger house. Comps in the area is about $90 per sqft. So bigger house, bigger resale (assuming I need to sell later). As for rent, I could probably get $50-100 more per month for the bigger house.

Thanks.

Exo

Here is a pretty noobie question:
I have 2 houses, in the same neighborhood, about 2 streets apart.

1. First house, is smaller (about 1100 sq ft), 3 bd/2bath, brick, selling for $50K. Rehab to make it RENTABLE is about $15K. Total cost: 65K
2. Second house, is bigger (about 1500 sq ft), 3 bd/2bath, brick, selling for $67K. Rehab to make it RENTABLE is about $10K. This house is about 10 years younger. Total cost: 77K.

The comps for the neighborhood is about $110s. BUT the rent for the neighborhood is about $1050/mth. Price per sq. footage is virtually the same at about $45 per sqft.

My question, since my strategy is Buy, Fix, RENT. Does it make sense to buy the bigger house for $12K (based on Total cost) more, when the rent is will pretty much be the same??

Also, how much should I care about resell comps for ARVs if I plan to RENT?

Thanks!

EXO

Texas is a BIG state! Any specific area or suburbs? The reason for asking is that depending where the apts are located, the city ordinances could be detrimental to you occupancy. Example, there are a few cities in the DFW area that is trying to pass local laws banning renting to ILLEGAL immigrants. So, know where you tenants are from... I own apts in TX but not in the Dallas area, though I am from the area.

Okay. From the 50% rule to the .02 rule, this deal is great. It's 7 SFH that has combined rent for $2850/month asking for $125K. That's NOT a typo! HOWEVER, the "problem" is that the houses are in the hood. Now, it's a relatively small town where I grew up, not South Dallas (Oak Cliff) hood. So this "hood" is more like the poorest area of town. I wouldn't go there at night, and my other rentals are in decent neighborhoods. I've been avoiding the "hood" on purpose, but this seems like such a great deal.

Questions: What other factors should I consider? Why wouldn't this be a great deal?

Thanks in advance - EXO

What should I do? I live in a town that is NOT affected (much) by the housing market. About 125,000 in population, with a MAJOR highway corridor being built and 4 yr university is now here and several big factories moving in because of it. It's the 2nd/3rd fastest growing city in the state and is predicted to double in population in the next 7-10 years.

Rent houses stay vacant for about 1-2 weeks. Even in the "hood", you can rent something pretty quickly. I can pick up a few houses and small complexes using the 2% rule. I've never been a landlord, and plan to hiring a PM.

I make about $200K/yr from my job (this won't last forever, but a good 2 or 3 yrs left), great credit, about $750K in assets, $200K in cash, and NO debt.

My question: Should I just pick up as many SFH as possible (assuming the 2% rule) or go after complexes? If complexes, which ones? Big, med, small? They may not fall in the 2% rule though, maybe 1.7% or so. I see a lot of growth, but not sure how to capitalize on it.

Maybe it's not even real estate that is the key, maybe it's something else. I don't know. Please advise and let's assume my population growth turns out as expected.

Thanks!

T

I understand this rule and why I must use it. BUT, is there any other criteria that should be consider? Do I ever go down to 1.75% or say (rent x 55) for example? OR is this the 2% the minimal I should ever use.

Also, does it matter if it's a SFH or a apt complex (30 or fewer unit)? My goal is 100/unit like everyone else...

Thanks!

Exo

I have an opportunity for to buy a 16 unit apt. complex. 14 unit is 2/1 ($395/mth), 2 unit is 3/1 ($575/mth), tenants pays their own utilities. It's in a low income neighborhood (not war zone), no tenants are section 8 at this time.

13 of the 16 is currently rented out. So, monthly income if all filled ($6830/mnth income), monthly expenses is about $1,500 (via the seller). The asking price is $275K (let's assume I buy it at this price - which I won't). Let's assume I go 20% down and 7% rate (owner will finance at this rate). He's an out of town owner, so now he just wants out.

I live in the town and can do all the minor repair stuff.

How does this deal sound to you guys? What am I not looking at that will catch me off guard?

Thanks!

TL

Hey Everyone - I've search a this forum and a few others and I've seen a lot of 'equations' for Buy/Flip as being AVR(*70%)-rehab cost=max purchase price. NOW, my question is, what about non-flips? Is there a good equation for that as well? Or should I just use the same one as Flips?

Thanks!

Exo