All Forum Posts by: Geordy Rostad

@Tony Dinh

What is the property? Is it a multifamily? 

The only thing that really jumps off the page at me is the $935 appraisal. That is probably 40% higher than I would expect for a house but your area may be a lot different than mine.

Your lender is taking a big fee but it's nothing abnormal IMO. 

Section E, F, & G you can't do anything about.

Section C is all reasonably standard.

@Ryan McLeaird Yes!! You've got your head around this thing the right way I think. You can season the paper on the mobiles and sell that off too if you need to raise cash. I'd expect there would be a LOT of buyers for a $20,000 note at 15%-18%!

Just make sure your numbers work with the gross income at $300-$350*number_of_pads instead of the BS number he's telling you because of the mobile rents. 

@Kevin Grasse

If it were me, I would probably use the time all of that will take to analyze more properties and do more deals instead. It don't think the ROI is really there if you factor in all the time/money/hassle that this will cost.

Rule #1: Don't fall in love with a deal.

Hi Ed,

Is she working with an attorney? If your state is anything like Washington State, she needs to petition the court become the executor of the estate. The attorney will need to file some stuff to push the probate through. 

It's the government. Their job is to make things hard enough that rocket science looks simple.

@Account Closed

Looks like you already did RUBS? And it's still not profitable?

Should we assume the rents are totally maxed for the area and everyone is on a 1 year lease already?

Do you have coin op laundry?

Are there storage units? You could start charging $25/mo to use them or something like that.

12% management seems a little steep, especially when you are losing money on it. Have you shopped that around?

You aren't actually spending capex and repairs every month, right? Assuming you are just saving it like you're supposed to?

Looking at that cap rate, it looks a bit dismal. How did you end up in that deal? Please share, this could be a valuable cautionary tale for the BP forum.

@Gustavo Mejia

In my area, a certificate of occupancy is typically issued by a city or county on new construction homes once they are completely. I've only ran into needing to worry about this for brand new homes. Your area may be different.

@George H.

The property you own is always easier to obtain than the one you don't. That said, how are you calculating your cashflow?

Are you factoring in tax, insurance, principle, interest, property management(you're leaving the area, someone needs to take care of things), maintenance, utilities, vacancy, etc? Or are you saying "I pay $2000/mo and I can rent it for $1700/mo".

I would not invest for appreciation, I would invest for cashflow. This doesn't have it. Sell the house, take the money and buy yourself an apartment building or a better investment somewhere else where the numbers work. $300/mo lost is $3600/yr. That's going to add up quick! That's compounding working against you.

Could you refi the property for a better rate or just to reset the 30 year amortization schedule? Would that get you closer to a cashflow? I'm assuming you have checked rentometer? Have you also comped rents on craigslist, etc?

Here's a better idea... Have you considered renting it with a lease option? You can get a higher rent, sell for a higher future value, you could make the tenant responsible for all repairs (thus possibly eliminating management need), and collect a big chunk of change right up front. A lease option should easily be able to cashflow it.

@Brooke O'Bryan

In my basement, I did a coated concrete finish. If I were to do it again, I might just do a grind and seal on it. Depending what part of the country you are in, that might play well to the market OR.... people might not understand.

Probably best to just carpet it. Something that makes the basement seem "warm". Especially if you are in a colder climate. 

Look around at other listing pictures in your local area and pay attention to what flooring other people are putting in basements.

@Chris Banman

Buy an apartment building where the numbers are good enough for you to hire management. Professional property management is the ONLY way to scale your investment portfolio IMO. Even if you want to create a company to do property management, you can't be everywhere and doing everything. If you had a 25 units, things would be going wrong often enough that you would get sick of the calls pretty quick.

Don't think of property management as a perk or a luxury. Property management is an essential piece of the business. The percentage goes down for larger properties. It could be 10% for a house or 5% for 20 units. Make sure you have all the fee schedules and some references for any manager you are looking to hire. They are your front line of defense.

Don't worry about getting two properties. Worry about getting one so you don't lose that 1031 benefit. Go man go! 

@Nicole Van Logtenberg

I don't want to burst your bubble but auctions are really not the best place for a first time property investor. There is a lot of risk there since usually you will not be able to see inside the home before purchasing it. Also, you will need to bring cash to the auction. If the IRS happens to have a lien on it, they have a redemption period where they can buy you out of the deal you just scored. If you have fixed it up during the redemption period, tough luck. You also need to know whether you are buying a first or second lien. That makes ALL the difference in the world and it's something you'd probably want a title company to verify for you.

You should definitely GO to the auctions. Watch what happens. Meet some of the players. Trade business cards or whatever but leave your wallet at home.

Join up with some local investor meetups. Check meetup.com and the bigger pockets events page. Meet some of the players in the community you are trying to invest in. Build your contacts up and learn, learn, learn. Don't be the dumb money who goes to the auction, pays too much, and goes broke or breaks even on it.

Slow down a bit. Read Anson Young's Finding and Funding Great Deals:

https://www.biggerpockets.com/store/finding-and-funding-great-deals-ultimate