All Forum Posts by: Frank S.

Read about delayed financing.  No need to wait 6 months. 

Get a reputable agent,  not craigslist.

Welcome and best wishes! Enjoy your journey.

Rich Dad Poor Dad is fantasy, although he pushed it as reality. Kiyosaki is nothing but a motivational speaker clown, don't take it seriously. Same goes with the four hour work week and the stoner from e-myth.

Read about taxes,  management,  tenant psychology,  body language,  negotiation, listening, construction estimation, and investing calculations. 

The blogs are great.  A lot of the podcasts are awesome. Josh and Brandon put their souls into them. 

Once again,  best of luck, 

Frank

Mine went up a few points after the last one (805). Google for credit simulators.

You need a MEP engineering firm. Alternatively, an engineer or architect could do the whole thing. Ask your architect for references. You need plans and specifications.  Consider requesting construction documents.

You may need an engineer registered in California to stamp them.

PM me if you need plumbing permit documents. 

Frank

Is that amount with property insurance ($1000/year)?

Will you refinance after the 60k ish, ish, rehab?  Then,  your property taxes will double. 

Save 10% for Capex and turnovers, assume 8% for property management, and 10% for vacancy, an umbrella policy for 1M is cheap-get it.

Good luck, 

Frank

I don't see how it can cashflow $9,600/year after accounting for insurance,  property taxes,  maintenance, and management fees. The deal is at 1% (cost/ rent). Check your numbers. 

Good luck, 

Frank

I see,  $1300 is very different than $600/$800 in rent.  If accurate,  that changes the calculations. Check your numbers as you increased the rent considerably. 

You have big repairs.  Keep the scope of work under control. I think you should define if this is a flip with a rental as a secondary exit a strategy, or if you are going to keep it as a buy and hold from the get-go. 

Some very rough numbers may look like this,  roof and gutters 10k, bath/floor 7k, kitchen 10k, paint patch 7k, floors 3k, windows 2.5k, hvac 7k (central air and furnace), electric  trim, lights 1 k, doors $200a piece (door and  hardware),  water heater and plumbing (excluding bath and kitchen above) $1,800, driveway ($10/sf for concrete), ceiling at basement $800,  demo $1000, electric,  water,  taxes,  holding costs,  etc . You may be looking at a $55,000 to $65,000 rehab depending on finishes, work you can do,  and contractors prices.

Exterior work,  landscaping,  realtor fees,  and closing costs are to be accounted for a flip. 

Best of luck, 

Frank

With all that work required,   it won't work as a rental unless you leave a large percentage of equity in the deal. 

What did you allocate for roof,  bath and kitchen gut, hvac, and driveway? Are there issues with the electrical system? 

Start by taking to your agent(s) about this. This is very important, respect their time.

Maybe,  you could start with an easy rehab (cosmetics: floors, paint, cabinets).  Use your building and your contractors to give you prices on whatever you want to learn or replace later (roof, heating system,  water heaters,  all electric,  etc.)

Visit other investor's projects and have them explain the cost. You may be able to pick up a few contractors. Do you have a REIA near you? Attend and ask questions.

I focus on a specific area and I only need to see a handful of buildings, most are not be worth my time. The 100 building rule is a waste of time.

Price the rehab in $10k, $30k, or $50k, or $100k chunks. Don't worry if the $25,000 estimate ended up costing you $27,567. It's close enough. E.g, electric 6k, HVAC, 7k, floors 3k, paint 2.5 k, roof 7k, each window 300, and so on. It will be ok. Be careful of hidden gremlins, however (Capex).

Good luck,

Frank