All Forum Posts by: Greg Lott

Following. I'm not in Philly but about 2 hours west. Would love to spectate a conversation. 

Second what Chris said. Once you have enough data, you could consider seeing what a safe amount to start taking off the top might be. I personally take nothing and let it grow. It's nice to know there's some padding in case something big needs taken care of (we just had a 5K tree removal bill that our reserves will cover)

Doesn't look like a good deal at the current price/rent. You've got 4% for vacancy, 4% for maintenance, and I see nothing for capex. That's a lot of unknowns and risk for a 4.8% CoC return. I'd pass or lowball.

The biggest variables seem to be your rent and capex. You've listed your capex at 5%. Is it recently renovated? I prefer to be conservative, especially with capex. Bump it to 10% and see if it still works. Like Kenneth said, be certain that your rent is realistic. The number of beds, baths, and square footage seems like it might be realistic, but I don't know your market. 

    Absolutely. I've joined several FB groups and have been browsing local auctions to see what I can attend just to network. I'm a guy that likes to have a solution or two though before I approach someone for help. I think approaching an established real estate rehabber with a pitch that I can just generally help them would get less traction than if I came to them saying "I can chase your contractors, or stop by properties" etc etc, which leads me to this topic I created: what would bring the most value to the established rehabbers on these forums if the commodity I'm offering is my time?

I'm thoroughly interested in getting my feet wet with flipping and the BRRRR strategy, but my biggest hurdle is getting familiar with the ins and out and the minutia of flips, getting better at estimating rehab costs, and going through the paces, start to finish, of a rehab or flip. One of the best ways I can come up with to do this, without just diving in head first and doing it myself, is to do a 'ride-along' with someone who's been around the block. Basically, start to finish, work with them through the whole deal to get an inside look at the process and learn as much as I can. But, if I put myself in that person's shoes, I'm sure I'm not the only person who's come their doorstep and asked for them to be my mentor. So, what could someone offer you, a seasoned flipper or rehabber, to open you to the possibility of mentoring them and bringing them along on your next deal?

The best I can offer right now is my time and labor. I can make phone calls, periodically visit properties local to me, and keep tabs on things, all for free obviously. And in return, all I ask is that I get an inside look at the process, start to finish.

Would this be worth considering to you seasoned flippers and rehabbers out there? Is there something more I could offer? What gap do you need filled in your daily to help you do more deals or do you current deals better?  

@Stephen Dickey yes it is listed at full price. The tax assessment was for $225,000.

@Andrew Johnson I NEED the cold water guy to come in here before I miss something or fail to take something into consideration. I think I have a real opportunity to get it discounted since it's been up for a while. Again, I still haven't visited the property, so there might be some glaring issues which making it clear why it's been on the market for so long. I definitely want to work out as many utilities as possible before I even consider dropping an offer, and I'd like to verify rents too of course, but these are my typical due diligence tasks. Thanks for the feedback.

Hello everyone,

I’ve analyzed several deals over the past 2 or 3 weeks and finally have come across one I think might be a winner. It’s a 4-plex in a nearby college-town. The house is about as far from the university as you can get while still being in the town (about a 1 mile/20 minute walk). Asking price is $179,900, and supposed rent is $650/month for two of the units (2 bed), $675/month for the other two (3 bed). This property also comes with a 2 unit garage. It was built in 1940 and has been on the market for 131 days. Owner paid water and heat from what I can tell off the listing sheet. Would also have to include lawn care (small yard) and snow removal (side walk).

Asking: $179,900

Projected closing cost (provided by lender): $8,000

Down payment (20%): $35,980

Monthlies:

Mortgage (30 yr fixed rate at 4.75%): $751/mo

Vacancy (5%): $132.50

Maintenance (10%): $265

Insurance (their number): $158.75

Property Tax: $304.17

Utilities (complete guess at this time, $2500/yr): $208.33

Management (don’t plan to use): $265

Cap Ex (10%): $265

Contingency (5% added to all expenses)

Total Monthly Expenses: $2467

Rent Income: $2650

Monthly Cash Flow: $183

CoC ROI: 5%

NOI: $2196

Unknowns:

Rent (numbers provided by listing agent, will need to verify 100%)

Utilities

Insurance (probably won’t change enormously, though)

The reason the seller is selling

Notes: To me my estimates seem conservative (which I always aim for). With a perfect situation (ie removing management fees and the 5% contingency), I end up with over $550/mo in cash flow. This says to me that, even in the event of a miscalculation I’ll still cash flow decently. Am I missing anything crazy? I think I might even be able to get a slightly better deal on this place, solely because it’s been listed for over 4 months. I have not visited the property yet, but barring any crazy notes from the listing agent, I will likely set up an appointment in the next week or so. Let me know your thoughts.

What do you look out for and what questions do you ask when buying old properties? I just visited a 4plex built in 1806 that looked great on the inside, but quickly realized I didn't know what age related questions to ask the agent about the property. What are the greatest issue's with old properties that you've experienced?