All Forum Posts by: Hilaree Fraly

Thank you for your input! Unfortunately, it is in the Bay City area

I am in a position to purchase a house from my landlords of three years. They have decided to sell me the house and allow me to place the last three years rent payments towards the asking price, with "back interest" added. They are asking $115,000 for the house, and the math shakes out to be a final price of $104,000. After running comps in the area (I plan to get it appraised before I make ANY final decisions), the house is expected to land in the $145-150,000 range, and the landlords know of this but they are older and just want to get rid of the house and are found of me, etc, etc... Anyway, SEEMS like a great opportunity to buy and have equity almost instantly? I have been looking into 1031 exchange if I do buy. If I do buy, I would be doing a conventional loan, so estimating around 20% in a down payment.

However, I am wondering if I should instead take the 20% (~$20k) and walk away and look at lower costing properties, as my goal is single-family rentals? 

I just want to be very strategtic with this money and wanted to reach out to the forums to see if anyone had any kind advice to throw my way! Thank you in advance!

@Joe Villeneuve

Joe, would you be willing to explain this further?

I would like to understand better. Thanks.

@Charles Kao

it was a home built in 1900’s and had new foundation, furnace, windows and steel roof. So I did 5% due to a majority of the big ticket items being new.

@Joe Villeneuve

Thank you! That’s really good insight on deals vs. properties. I need to remember that!

Ignoring the 1-2% rule, I’d still be at a cash flow of ~$350/month.. that’s probably my hang-up. I of course would PREFER to not put more money down (at the $59000 offer) but if I did, I could still make it cash flow at that $350.

So I guess that’s my question... I’m unsure what “good” cash flow is. Any thoughts?

@Nathan G.

I REALLY appreciate that feedback. That was/is a major concern of mine and was something I thought was unfortunately possible.

Hi!

I’m looking for some thoughts and advice on a deal I am currently looking at. It would be my first bank loan deal with a real estate agent.

I’ve used the BP analysis calculator and ran the numbers.

Original asking price: $59,900

1st offer: $50,000 - felt good about the numbers!

After I submitted my offer, my agent received a courtesy call that the other offer I was up against was at least asking price ($59,900). I have ran the numbers for $60,000 (below). Now, I’m just trying to rethink and analyze as this would require a larger down payment - which, is doable but there are some cosmetic touch ups that need to be done, etc.

Just a new investor looking for some advice!

I know the 2% rule and the 50% rule...

I’m over the 50% and I’m at about 1.39%.

I know some investors see those as general guidelines and focus on one more so than the other, or, just on cash flow alone. This is probably my biggest hang-up...

Numbers at $60,000:

Rental income: $1000-$1100 average (know the area, rentometer, etc)

Total operating expenses: $391 (5% est for CapEx, maintenance and vacancy)

Mortgage expenses: $258

Cash flow: $350

I am able to get a conventional loan for 4.5% interest with 15% down.

@Wendy Patton

Thanks Wendy!

If I remember right, you offered a seminar a while back down by Troy? Unfortunately, I wasn’t able to make it work with my schedule at that time but do you offer them often? If so, how can I get more information?

Hi!

This is my first post to the BP forums but I’m a long time reader!

I’m interested to see who all is investing in Michigan and in what (rentals, flips, etc)?

Excited to make my first deal and looking for the right one!