All Forum Posts by: Matt T.

My city is quite a bit smaller than yours but I usually take a scenic route when going anywhere and make a note of properties that look obviously vacant. We also have online property records so I regularly do a search for properties taken over by the city. My city seems happy to practically give them away to someone that is willing to fix them up.

Welcome to the site Benjamin,

I'm also typing this response from Afghanistan. I'd recommend continuing to soak up as much from this site as you can until you decide where you want to live. Once that's done and you secure that first job on the "outside" you will have all the information necessary to get started.

Since you mentioned wanting to focus on a buy and hold strategy, I'd look seriously into a multifamily unit (duplex or triplex). You'll be able to get pretty good terms on one of those using your VA loan. The rent from the other unit(s) will offset your expenses. Give it a year or so and move onto another house if you want. Keep in mind you can only get one VA loan at a time.

Cherry is also popular in my area. I use a cherry cabinet with light colored granite counter tops, stainless steel appliances and ceramic tile floor. For the first time buyer market I'm in (95-110k) it's really the kitchen that gets all the comments and seals the deal for us. It also takes up about 25% of my typical rehab budget.

I agree, and that's why it pays to shop around. They are giving 30 year fixed at 5% for 75% of appraisal after owning six months. My dad was in lending for 40 years and wouldn't believe the terms until I showed it to him in writing.

For me, it varies on the amount of money I have into the project. I shoot for $xx profit rather than a percentage. My personal goal is $20,000 for my market. Here are a couple examples why percentages could be misleading:

1. purchase price $26,000 cash...$50,000 rehab/holding cost....$10,000 real estate fees/closing costs paid. Sale price of $106,000

$106,000 (sale) - $76,000 (total invested) - $10,000 (sales cost) = $20,000 profit before taxes
$20,000 / $76,000 = 26%

2. purchase price $38,000 owner financed with $5,000 down....$30,000 rehab/holding costs/payments...$9,000 real estate fees/closing costs paid. Sale price of $97,000.

$97,000 (sale) - $32,000(loan pay off) - $35,000 (cash invested) - $9,000 (sales costs) = $21,000 profit before taxes
$21,000 / $35,000 = 60%

I've only done two flips and have at best a loose understanding of figuring ROIs. There are some very experienced flippers on this site that will come along eventually to weigh in.

This is really going to be specific to your area. Try calling smaller banks and credit unions in your region and see what they offer. Other posters have indicated banks require 12 months seasoning. There is a credit union, specific to my locale only, that offers cash out refinancing (75%) after 6 months of ownership. They base the loan amount on appraisal, not purchase price.

It would be in your interest to shop around within 60 miles or so of where you intend to invest and let them know your plans.

I had a licensed contractor living in one side of a duplex. I had recently completed an eviction on the other side and it was in rough shape. The tenant, contractor, was short on money so I worked out an arrangement for him to work on the other side in exchange for rent. He tore out a lot of things I wouldn't have touched and didn't fix anything. Not only did he move out in the middle of the night without completing the work, but I was left with a hefty water bill from his side. Water is the only utility that follows the property rather than the tenant in my area.

Two lessons learned for me:

1. You don't have your rent, you are out, period. NO deals.
2. Water stays in my name for my units and I raised the rent accordingly.

Welcome to the site Wayne. I'd talk to a few local banks before spending the time and money to set up an LLC. You may find owning properties in an LLC can make it more difficult to obtain financing. I currently own my rentals in my name but have sufficient (I hope, lol) insurance to cover any litigation.

Do you currently own a home? Without knowing more details, it will be difficult to give much advice. If I were to start all over, I would have bought a multifamily (duplex or triplex) and lived in one unit while renting the other. It seems relatively easy to get financing for owner occupied even without perfect credit.

I know the credit union I work with won't count renal income from "roommates" in your primary residence. You might want to call a few banks and find out their policies.

Some banks will require tax returns as proof of the rental income. The bank I deal with only asks for copies of the leases. They only count 75% of the rent I receive as income.

That makes a pretty strong case for spending a few bucks for title insurance.