All Forum Posts by: Account Closed

@Roy N. , I appreciate the feedback. I'll be making the offer today and will keep you posted where I shake out.

@Will Porter I like the forced appreciation perspective. Although I have some digging to do, it's likely that rent could go up another $1,200/year for each unit #1 and #2. I will definitely look into this further. We'll see if he's as motivated as he appeared to be when I first met him at the property.

@Roy N. The house is currently fully occupied so that's why I didn't bump it up to 10% vacancy but I definitely agree with increasing PM and Maintenance. The units are separately metered so all utilities are paid by the tenants. I will have to ask about the garbage. Re: your minimum cash flow of $100-$150/month requirement, how much equity would you have in that scenario? What would you need your cash on cash return to be?

@Sara Cunningham It sounds like PM goes for 4% to 10% in this area, so I didn't think 6% was unreasonable, but bumping it up to another % probably makes sense.

Hi Everyone -

I've been doing direct mail marketing to absentee owners. Although I'm a rehabber, I get a lot of leads for properties that are tenant occupied. In an effort to not pass up a lead, I'm analyzing a triplex with a garage in Drexel Hill, Pennsylvania (20 minutes outside of Philadelphia).

Here are the facts:

• Rents:
  • Unit #1 - $10,200/year
  • Unit #2 - $9,900/year
  • Unit #3 - $7,080/year
  • Garage - $1,500/year
• Landlord expenses -
  • Property taxes - $6,000/year
  • Insurance - $1,000/year

I'm going to assume (for projection purposes) 8.33% vacancy rate, 6.00% property management fee and $50/unit/month in repairs & maintenance. In terms of a rental, it seems to be in decent shape. If I were to flip it though, I would update each unit (kitchen, bathroom, flooring and paint).

My opinion is to get it under contract for cash and assign it to someone that invests down in that area of Delaware County, Pennsylvania.

The owner of the property seems motivated to downsize so I'm likely to be able to negotiate him down - he's asking $200,000 for this property.

I'd love to hear the community's perspective. It would be interesting to get the perspective of a buy and hold investor in that part of Delaware County to see what they like to find in a rental in terms (ROI and monthly cash flow, refinancing requirements etc. etc.)

Looking forward to the discussion.

Hi Everyone -

Does anyone know how one could get a data dump of historical real estate transactions within a particular county and within a particular period? Would this be something a title company might be able to generate and provide to me for a fee?

Any insight would be greatly appreciated.

Thanks,

Termites and mold are common problems. It might be worth following him/her to learn what he looks for and what he does. For instance,  now I know to take a screwdriver with and if I see termite or mold problems in in the basement,  I might stick the screwdriver into the joists or framing. If it goes in easy, then there's damage and I think that is a typical test an inspector would do. 

@Victor Noriega 

, great post! I had the similar problem where I wanted to get into the real estate business so bad but never sat down and thought through each process. Then I had a discussion with another investor and he said you have to treat your business like a business. Not only should you set up annual goals and long term aspirations but you should also have monthly and quarterly budget/projections to work towards.

But my personal opinion is not to overthink things "paralysis by analysis". In his book Think and Grow Rich, Napoleon Hill states "Analysis of several hundred people who had accumulated fortunes well beyond the million dollar mark, disclosed the fact that every one of them had the habit of reaching decisions promptly, and of changing these decisions slowly, if, and when they were changed. People who fail to accumulate money, without exception, have the habit of reaching decisions, if at all, very slowly, and of changing these decisions quickly and often." I'm still trying to strike the right balance (I love analyzing deals and doing crazy amounts of scenario analysis) though...Good luck!

@Alex S. 

why not get a line of credit against all these properties and use it to private lend? You should be able to get a sizable LOC. Private lenders are charging 2-5 points up front and then 8-12% on the loan. Compare that to your LOC rate and you'll see it's a nice payday. And you can be picky on which deals you want to fund. Good luck.

Hi @Brandon Sturgill  , I haven't used it but just looked it up and it looks pretty comprehensive. How are you looking to leverage it? Are you an appraiser? Have you seen J. Scott's book on estimating rehab costs?

Hey @Jordan Archer 

, I have this on my radar as well but haven't gotten the information yet. I've heard that you just need to find the name of the judge that is responsible for evictions in your targeted counties. He/she might have a regular schedule of doing the evictions. Good luck.

Hi @Account Closed 

1. To determine rehab costs, you should walk through the property and see what is needed to bring it up to today's standards. I use costs I've actually incurred on the flips I've done and supplement that information with "The Book on Estimating Rehab Costs" by J Scott - a good summary of major repair components and their estimated costs.  If you haven't flipped a property yet, it might be worth thinking about connecting with a general contractor; you could set up a payment arrangement for each time he comes out and looks at the property. I would then track what he/she gives you in costs for each property and you can start to develop a cost estimate database for common repairs and estimates. Costs can vary based on if an investor wants to flip it or rent it out.

2. To determine if a property is worth flipping, you should apply the 65% or 70% Rule. Meaning, you would determine that after repair value (based on the comparables to the house you are looking at) and multiply that value by 65% or 70% (based on how much of a margin you want) and then subtract your rehab costs. Also, you should find out how much the existing mortgage is (or any liens) to see if it even makes sense to make an offer.

Happy to discuss further if you would like. I think your 2 main questions can make for a very in depth discussion.