All Forum Posts by: George Gao

Hi All,  I just attended one of Marko Rubel's webinars on foreclosure/shorts-sale strategies.  It seems credible (depending on marketing success) and he seems to have a proven track record from sellers and students.  More importantly, he offers an established program to follow which for a beginner like me is most valuable.  The program itself is not that expensive and he offers 30-day money back guarantee.  Does anyone have experience with his programs? Thanks in advance.

I bought two deals from them last year as a newbie.  In hindsight, they were a little thin, but not terrible deals.

1. Missouri City 3/1: Purchase price $60k. Inherited tenant left after 6mo. Rehab $12k; ARV 105k; Current rent 950. Not a 2% deal

2. Medical Center 3/2: PP $59k. Rehab $5k; ARV 95k; current rent: 1050. It's a better deal than the first.

Positives: great/fast communication, very responsive, tons of leads (I get 5+ emails from them daily), have connections/referrals to HML, contractors if needed

Negatives: double closing cost; $5k upfront fee (a little high); have to sort through the leads (some off-market, some MLS, some from other wholesalers, quantityvsquality); can be a little more pushy than other wholesalers.

Agree with other comments above.

I'll be there.  Thanks for organizing the meetup.

This would be my 5th deal. The HML quotes I got on this deal are around 4pts, 12%.

You could be right on the 10% cost be on the low side.  Probably better to be more conservative there.

Hi BP,

I recently came across a triplex in south Houston near Medical Center area. It consists of two separately buildings on one lot. The front SFR is 925sf with 3bd/1ba that's half rehabbed (still needs kitchen, bathroom, flooring and some electrical). Plus there is a duplex in the back with 1,500sf that has 1bd/1ba each, but is down to the studs and needs complete rehab. I guesstimate the total rehab will be around $45k to bring it up to rent-ready conditions. There has been a recent appraisal done by a HML for $150k ARV. Asking is $75k.

The good news is I think the 2% rule almost works on this one. Rent on the front house is approx. $850-900/mo. The duplex can get around $550-600 each side. Total rent income should be around $2k. If I purchase for $75k plus $45k plus 10% closing costs (since I plan on using HML for financing).

Refinancing into a perm loan will be tight for BRRRR strategy. Typically, conventional lender with max out at 70% ARV, which mean I'll be coming out of pocket for at least $30k for this deal.

Also, the neighborhood is C-, D+ at best (but not war zone). It’s trending in the right direction around that area, but still sketchy at night. There are 2-3 boarded-up houses nearby. This will be the first rehabbed house on the block.

Lastly, the parking situation is kind of tight. There are only 3 spots available between the front house and the duplex that has to be shared by 3 families. The lot is not big, so no room for parking expansion. Plus the street is not that wide. Should that be a big concern?

Overall, the deal is not a home run, but should cash flow well (1k/mo after PITI) and generate a great return on paper.

A couple of private money lenders already turned me down due to the neighborhood and also because it's harder to comp multi-families in that area. But I know HML would do the deal.

Is this something that you would consider?

Great job!  Did you use a design firm for the new layout? or did you design everything yourself?

Hi Matthew, I'm a realtor from Houston. I live in the Katy area where there are high inventory on SFR rentals as well. But if you dig a little deeper, there are pockets/subdivisions within Katy that rents extremely well and have low DOM. So sometimes it does depend on street, location, and specific school. I'd be happy to run some comps for you if that helps.