All Forum Posts by: James W.

Hi guys -

I got a property from an auction.

We nominated an agent on the buy side, and she gets 3%. However, the auction closing company really took care of all of it - except for the Certificate of Occupancy that she got for me.

Its time to sell the unit now. She's been helping to ready up the unit for sale, like talking to contractors etc.

It will be soon time to draw the sale contract. I assume she typically charges 5% to sell.

I wonder if its ok to ask her to count the buy side 3%towards her sell side commission. We can make it a total of 5% by paying the remainder.

It may sound odd - but the thing is - i can simply not nominate an agent next time. And pay her the same 5% on sale. 

That's no better for her. Because I can use any agent then. She can also benefit from an ongoing alliance here.

I also hope its right to ask the question.

Totally agreed.

I just find it more managable in that there's this psychological comfort that its backed by Loews or HomeDepot. The subcontractors they work with go through screening, and are normally very high quality and professional.

The work comes with warranty and standard set of knowns and templates. And the pricing is very much in range.

Lets say 75% of this correct. I'll know more though.

Thanks Jack.

Hi gys -

I find that getting a correct and trustworthy estimate for "paint and general repair" - is much more difficult than "standard rehab" items.

Standard Items like flooring, kitchen counter-tops, cabinets & appliances, windows & doors, HVAC - can be done by major home improvement companies - so there's this great satisfaction of paying the right cost.

however with paint and general repair - contractors are quoting me anything they want - and numbers are like 200% different.

how do I determine the actual cost of "paint and general repair"?

also - is there a standard list i can go through to make sure the unit is 100% done by the time contractor leaves?

I came up with the following in "General Repair".

Further below is "Standard Repair" - that I find easier to get done from standard improvement companies.

Home Inspection - Perhaps should be done first.

- Roof & General Water Leak problem, Mould, Radon, Insulation


General Repair - To be done by local Contractors

- Painting - Trims, Ceilings, Doors & Frames, Windows
- Sheet Rock, Dry Wall, Wall damages, Door Frame damages
- Caulking in Kitchen, Bathrooms
- Plumbing - Water Leaks in walls/ ceiling, Water runs freely, cold/ hot
valves, pipes under vanities and kitchen, invisible pipes
- Stair Railings, Decks
- Electrical - Fixtures, wires, insulation
- Professional Clean up in the end


Standard Items - can be done by home improvement franchises-
New Appliances
Flooring - Wood, Carpet, Tiles
Kitchen - Countertops, Cabinets
Bathrooms - Seats, Tubs, Vanities
HVAC - Water Boiler, Air conditioning

 Thanks Judy.

Sticking to non-occupied properties for now.

Something interesting I found -

http://www.npr.org/2015/09/25/443423954/99-homes-a-morality-play-built-on-foreclosures-and-evictions

Hi gys - 

I won a property at an Auction.

It does not need much work - needs new paint, living room floor and some cleaning.

May be some handyman work.

Any advice on how can I go about doing everything with minimum number of workers involved.

Are there any resources on this site to do this by area?

thank you.

 Thanks Chris.

I meant evicting the owner.

So send a notice - and if they dont evict - file judgment of possession?

By the way - I also find it morally disturbing - to ask an owner to leave. They might have a situation, kids and old people there.

How do investors deal with it?

Hi guys -

I know eviction process after winning an Auction has been discussed several times here - but this is very specific to New Jersey.

Has someone got an eviction done in NJ after winning an auction?

Can you lay out the steps?

Thank you.

 I see what you mean - thank you.

The thing is - Its generally very important for me to have a back-of-napkin calculation to quickly see the monthly returns or liability, you see. The closer the better.

My understanding is that its easy to estimate the monthly returns very accurately - simply by taking the Cash on Cash from Cap Rate - and deduct the Debt Service from it.

Of course it doesnt consider all expenses - but given that debt is the biggest expense - its very close.

So you see - you come across a listing that says 1MM @ Cap Rate 5%.

You know right away this yields 50K a year.

You realize you're going to take a loan on 75% of 1MM - at 4 %.

Your payments are now 3% of 1MM ( 750K x 0.04) = 30K. 

Principal is around a third of interest - so 10K.

You may have other expenses - 10K.

Total expenses 50K.

You know right away - the deal doesnt yield anything for you every month.

If this had a cap rate of 8% - i know i can simply deduct 3-4% - and it yields 4-5% annually.

You see - i did the above without using any term - NOI, GOP, or anything like that. To say that a quick calculation is a must. And can simply be done by knowing to reduce the debt payments from the yield that Cap Rate suggests.

Now - if my calculation is wrong above - i can use correction.

Thank you.

Agreed !

 ok. let us know what your loan and purchase figures come to be.

my guess is your net ROI should be ~3% less than the projected cap rate.

i say 3% because thats your yearly payments on 75% loan on purchase price, at 4%.