All Forum Posts by: Hector Serna

Hello Hector, congratulations on your first deal. As a new investor myself, my biggest concern with your plan is how much you would be cash flowing each month? Is the mortgage itself $1.9K? Or is your PITI payment $1.9K? Because you can very easily fall short on your cash flow by forgetting about insurance and taxes on this deal. Especially if we are already looking at only a possible $200/month AFTER we invest $20K.

I do like the plan of paying down the principle by a high number each month to bring the loan down and refinance, but its going to take a few years in order to see a real difference in your mortgage payments. Also, do you know your ARV? This can really make the difference in your plan to refinance this deal to see a good amount of cash flow coming in from this property.

@Hector Serna with a single-family home, it all depends on the area. What kind of areas is this deal in? Is this a solid area with good schools? Generally speaking, I haven't seen any homes for sale for 180k in the areas I operate in. 

I would also dig deep into the rents. If you can rent the place for $2400, it makes a huge difference. This is not unrealistic depending on where the home is located. 

So much of this really depends on the location for me. There are some areas where I would pick up the 180k house in an instance even if it was cash flow neutral because there is so much equity upside. There are other areas where I wouldn't touch the 180k home with a 10-foot pole. 

@Hector Serna the bigger question here isn't whether the bank will negotiate on the price up front. The real question is, what is on that compliance report..... that could make or break this deal for you. 

@Hector Serna I'll take the opposite approach of the others, I don't know the area and it may be a good deal. But cash wise, if you're renting it for $2k and your mortgage is $1900, then you're losing money each month once you account for vacancy, maint, CAPEX, etc.

Plus with it being an investment property, 25% down on $180k = $45k cash (plus closing costs), plus another $20k for repairs, that's $65k cash out of pocket to be break even each month at best (and again, prob losing money each month accounting for other expenses).

Hey @Hector Serna - Without any other information...I'd say go for it!  Just do your due diligence....have you run it through any of the BP calculators?

What's your overall long-term strategy with the property?  Long-term hold? Live & flip?

What part of Chicago is it in?  Is there any reason you can't buy a multi-unit property instead?

@Hector Serna with a single-family home, it all depends on the area. What kind of areas is this deal in? Is this a solid area with good schools? Generally speaking, I haven't seen any homes for sale for 180k in the areas I operate in. 

I would also dig deep into the rents. If you can rent the place for $2400, it makes a huge difference. This is not unrealistic depending on where the home is located. 

So much of this really depends on the location for me. There are some areas where I would pick up the 180k house in an instance even if it was cash flow neutral because there is so much equity upside. There are other areas where I wouldn't touch the 180k home with a 10-foot pole.