All Forum Posts by: Steven Grabowski

It may also be the heat exchanger in the furnace itself. Leaking fumes into house.

I just replaced 2 very old furnaces in which this was the case.

$500 is the higher end of the market in this town. However, I think as a college student rental, I can rent it 'per room' and get an overall higher rate. My goal is to have the project done under $35k total.

I guess, if I can get it done under $35k total, and my rents are $1000 a month total - is it a good deal?

Yes, I need to come up with 20% down of the purchase price, then the project needs to appraise at least at 90% of finished cost (which I am sure it will). My closing costs and prepaids will be financed as well (I just did this on another deal about 3 months ago - same bank).

My only other 'out of pocket' will be the inspection and appraisal ($300 each approximately).

If the house appraises at $60k I can get $52k in financing - I don't want to though, the numbers won't be good enough for me. I want to have it finished and all in at $35k leaving me plenty of equity and cashflow.

I'm pretty sure this is a good deal - my offer was accepted, but I still have an inspection that needs to pass.

Duplex (side by side, 1,600 sq ft each side)
Purchase Price: $19,000
20% down - $3,800
Mortgage on $15,200 @ 7% (commercial loan) $117.84
Taxes $2,300

Rents $1,000 ($500 a side)

Now, this alone is an unbelievable deal - but it needs work. New roof, paint inside and out, and new kitchens.

The question is, how much can I put into it to still make it a good deal?

My preliminary estimates for work are $22,000 for a total project price of 22k + 19k = $41,000
Mortgage on $37,200 at 7% will be: $288.41

50% rule states I have $500 - $288.41 = $211.59 profit

Cash on cash return for this is 66% right? ($2,532 profit a year / $3800 cash out of pocket...)

Good deal?

I have a similar airflow issue, but I haven't had time to see if there's anything far down in the duct.

After reading this, I'm not sure I want to look :)

So you're financing $100,000?

If so, payments for that at 7% / 20 years (commercial setup) will be $775.30.

Rent is only $950

You still have taxes and insurance to pay.

How can you refi and pull out any money?

Or are you putting 20% down? At which case:

Mortgage on $80k: $620.24
Expenses (40%): $380
Rent: $950

Loss: $50.24

I agree - doesn't seem fair. There is a college town near me that doesn't allow you to rent your home!

I have friends trying to sell their home, it isn't moving - and they aren't allowed to rent it to college kids either!

Talk about unconstitutional!

You forgot the most important - a checkbook! :)

Are they rentals? If so, are you at least breaking even on them?

Originally posted by Steve Might:

Developer:
That is what I thought too. Are any of you planning to buy some more rental properties?

I just purchased a 4 unit (all 3 bedroom) property with 10 garages right before the 'panic' began (closed Aug. 29th). I am also looking to purchase some of the neighboring properties since there are some good deals out there now. Out of town landlords needing to sell, other people who are feeling the 'pinch' elsewhere and just need to get out of their loans, etc.

However, I don't want to get sucked in to thinking that there are a TON of good deals. They still have to be carefully selected. But I do think in times like these, when people panic, and want to sell or need to sell is when there is opportunity.

Everyone here says that the money is made when you buy - I think we have a 3 (or so) year window of time to get the good deals. Once it starts picking back up, prices go up.

The problem new landlords / RE investors face I 'think' is that credit is tight. To get into Multitenant properties, you need to do commercial loans, and many banks want you to have a proven track record of property management, development, etc.

Any thoughts on my theories?