All Forum Posts by: James Denon

@Elizabeth Wilson@Larry Fried @Grant Diggles @Keith Jourdan @Grant Diggles thank you for the insight from your markets. I will send you a PM to see if there is opportunities to work together.

As I said, I am looking to buy the property in cash, looking to pay for the rehab and get it appraised such that I have ~20-25% equity and manage it. I am looking for long distance investor friendly providers.

@Michael Noto The decent properties here locally are few and far between. I was drooling over the 2 family property you sold in Southington which is probably good B+ property. I saw it and did not call you right away and it went into contract 1 day later.

I don't think you see similar properties that often whether it is already rehabbed or lend itself to BRRRR.

@Alex Craig This property was in Indiana. I don't want to give the address because to your point maybe my underestimating the rehab costs. It has been 2 years that I have been involved in any kind of rehab. Maybe the material prices have gone up.

I want to be able to have the flexibility to sell the asset couple of years down the road if I need the liquidity at a minimal loss.. So maybe Turnkey is not the right model for me since it doesn't leave much on the bone for the end investor. 

@Kyle McCorkel I will send you a PM. 

@Alex Craig, I would like to do a full up rehab with plank floors, SS appliances, updated cabinets, new roof etc. I am just trying to avoid the huge markup that kills the exit strategy.

For example, I see that the property was bought in an auction for 15K. As far as I can tell, ~15K-20K worth of rehab was done. It is being sold on turnkey website for 70K. If you look at the recently sold comps in the past 2 months in the local market, they sold for 45K to 50K. I am ok with paying 45-50K for that property. Not 70K. 

In 6 years, you don't build much equity and you only make $200/month X 6yrs X 12months= $14400 cashflow.

If you sell it at 50K, you just owned a house for 6 years as a hobby without accomplishing any financial goal..

I am checking turnkey properties. Seems like all of them are charging above retail prices if you compare them with local comps. This makes the exit strategy difficult for the investor. If you hold the turnkey property 5-6 years and it is in a slow appreciating market like Indiana, you may lose money overall selling the house despite the $200/month cashflow you made because you paid too much buying it.

Are there reputable turnkey service providers out there who will wholesale you the property, charge you reasonable amount for rehab and manage the property for you? Essentially helping you do a BRRR in a good market like Memphis, Florida, Atlanta, Texas etc. and maybe indiana or chicago. I would imagine not, since they probably make most of their money with the markup they sell the property after rehab. So charging "reasonable rehab costs" would not fit into their business model. Thoughts?

I am interested in turnkey markets which are likely to keep up with inflation with their appreciation. So that would be 3% appreciation per year. I live in Connecticut and it really sucks because good cash flowing B- properties are hard to come by. Anything that cashflows well is a war zone. Also the appreciation is low in areas that make sense to invest for cashflow.

@Jacob Reilly I would like to join and meet you guys tomorrow. Can you please add me to the list? Thanks.

@Chris 

@Chris Mason and @Thomas S. thanks for the prompt response.

Can you guys also comment on the income tax obligations on my side as well for either options?

My friend is buying a condo in Cape Cod MA. It is a bank owned property

The pipes are damaged and there is a risk of flooding if the water is turned on. The bank would not let them turn on the water because of this risk. They could not get it appraised to get a loan for the property. They cant even get a 203K loan for some reason although they are first time buyers. I really would like to lend him 80K they need to purchase the property. They have been told the only option they have is a portfolio loan.

We thought of 2 options:

1. I carry a note for 80K as a lien on the property with a payment schedule.

2. I get part ownership of the property and I give him back the ownership when he pays off the loan.

Any thoughts on which is the better option? What would be my income tax obligations under each option when he pays me back what he owes?

I am thinking Option 2 is  better. Since he can pay me on a monthly basis and I can sell him my share of the property for 1$ when he pays back the full principal. Maybe we can create an escrow account and he can make payments to this account on a monthly basis.

@Marcia Maynard Thanks. If you are an admin, can you please change it to analyze deals category?

I could have sworn, I categorized it as such.

@Brian Pulaski, If you look at the market rents around, you can charge 900-1150 in that neighborhood. It  probably is all section 8 though.

Why were you followed and threatened?

I dont know any of the rehab details. I have been told the heat and hot water are all seperate utilities. I have been told it needs a new roof. However, I cannot see the inside of the property to make an estimate at all.  It is boarded up and site unseen.

It was under contract and it fell through. It just went back on the market. I think bank got multiple offers the first time and it took a while to respond. Zillow shows the under contract date of 1/31.