All Forum Posts by: Farrukh Amini

Congrats on a successfully executed deal! Good job. You created a deal out of something that most likely wasn't even close to being a deal to a traditional investor. The power of creative deal structuring. 

Going forward, I'd suggest learning more creative exits on your sub2 deals, like selling with owner financing on contract for deed or wrap. That way you get all, if not more (or at the very least, most) of your invested capital back, creating an infinite cash-on-cash return. While renting it is good, you still got your 25k tied up in the deal for a long time, but also you're still responsible for maintenance, capex, and vacancies. Based on the numbers you provided (assuming $400 already includes TI), you'd typically account for about 8.5% economic vacancy, plus about 10% for maintenance and capex (given that you just rehabbed it), so this leaves you with roughly $333.5 net profit/month, which puts you at about 16% CoC ROI. This is even lower if you account for property managment costs (because eventually you'll grow your portfolio and will outsource management).

You can also sell on lease option, if you are adamant on taking advantage of depreciation, so there are lots of ways to go about it that may be better than just renting. 

What do you mean by balloon payment coming up? Does the current owner has a loan with a balloon? 

Check Path2homeownership platform. A lot of investors post their owner financing and lease option homes there:

https://path2homeownership.com...

Good to know. Thank you for the update. 

I haven't purchased anything all cash, but what I can tell you is that typically LTV on purchase is higher compared to refi, so more of your cash will be stuck in the deal when refinancing. I understand your goal with this strategy is to win the bid but keep this in mind.

https://www.biggerpockets.com/...

Look into owner financing options. Also, if you have down payment saved up you can go with investor loans. Here's also a good guide on VA loan limits and stuff state by state:

https://www.valoans.com/tools/...

Sounds good. You can direct message me. 

Thanks for sharing. Hope you reported them 

One advice I can share with you for self managing is anytime you connect with a realtor or a property manager ask for GC, handyman, plumber, drain cleaner, electrician, appliance tech, used appliance store, and roofer recommendations and keep saving those contacts in your phone. When you have a problem, you will be going down that list of contacts because it’s hard to find someone on short notice and someone good and reliable.