All Forum Posts by: Jamie DeRossett

This depends on your state and laws concerning eviction.  This can be a nightmare and is why I do not buy occupied properties.  I takes time to get a tenant out if they will not leave willingly.  In most states you have to go through the courts to evict a tenant and you cannot start the process until you get the deed in KY.  During the housing crisis 2007-2010 some states enacted new laws to protect home owners even after foreclosure.  You just need to check your local and state laws regarding eviction and the process can't start until you get the deed.  I just had to evict a tenant this month and as soon as he got served by the constable he just moved out.  Some investors locally go to the tenant and try to work a deal and pay them $500 to leave and not damage anything.  Whatever you do go out of your way to be as nice as you can to the occupant no matter what.  These people are just looking for a reason to tear the place up and if you have a bad attitude the probabilty goes way up. Good luck and thanks for the post.  Have a great night. 

Based on $180,000 at 4%the mortgage payment without taxes and insurance is about $1,400 and the taxes and insurance are normally about 10% ($140). That makes it $1,540 without vacany or repair items (hotwater tank, furnace, applainces, ect.) which we will estimate another 10%($140), which is low considering you have had high turnover, and the condition of the property is unknown.  So now plug the numbers. This is a best case scenario in my opinion. The property rents for $1,800.  

$1,800 - $1,400 - $140 - $140 = $120 x 12= $1,440 annual income if you keep and this is a best case scenario with low vacancy and almost no repairs.

If you sale.  The amount of $ needed to get it to $300,000 makes a big difference.  I am going to pull $20,000 out of thin air and use it for this example.

$300,000 (what you can sell it for after updating) - $20,000 (hypothetical expense number pulled out of thin air) - $180,000 (what you owe) = $100,000x.02 if it were in a low interest account = $2,000.  

What the numbers show:

Best case scenario for renting in my opinion is $1,440 annual income and you have to collect the rent every month, make sure taxes and insurance are paid, pray there is no repairs and the property stays rented.

Cash out the $100,000 and put it in a low interest account and do nothing and the worst case scenario is $2,000 and do not have to get insurance, pay taxes, or worry about vacancy, pay the payment, and all the other headaches that come along with rental property.  

The numbers reveal it is a no brainer.  Sell! The rent is very low for a $300,000 property. All markets are different and In my market most investors look properties that rent monthly x 100 = value. Here is a quick example using your info if you have a $300,000 property it should rent for $3,000 a month. What I look for myself is double that a $300,000 property should rent for $6,000  and your $300,000 is rented for $1,800 which is very low and barely cash flowing if everything goes perfect and it never does.  

If it were me I would sell and maybe look for another property around $150,000 and pay the $100,000.  The payment would be really low on this note and you could pound the principle with the excess rent and in no time have it paid off.  Then at that time invest that extra money in another cash cow and keep pounding the principle.  For an income producing property to pay off you must pay cash or at least 50% down or get a great deal with alot of equity.  Cash flow is name of the game with income property and your current property just does not cash flow enough.  I hope this will help.  Thanks for the post and have a great night.

It all depends on the property.  Many times house built around 1900-1920 are in the best locations close to the city center.  Houses built then that are still standing were well built and normally close to the city center.  Is it worth anything?  You must go to the flipping formula.  acquisition cost (cost of property, cost of money, closing costs)+rehab(deferred maintenance and modernization)-after rehab value-expenses(realtor fees, buyer closing costs if appicable) = profit. Just plug the numbers into the formula. cost + rehab -final value- expenses = profit.  Just plug the numbers.  I can tell you that being built in 1900 if it had not been updated and modernized over the years the rehab costs would most likely be through the roof so if it is not in a great neighborhood I have a feeling there may not be much profit on this one, but with the limited information provided a detailed analysis is impossible.  Thanks for the post and have a great day! 

Why bless my with such a bounty of riches?  My banker only buys from a wholesaler hear in Lexington and the deals are great.  The wholesaler is tied up in a big multi-family project and has no capital so the wholesaler is getting great deals.  There so good there is 20-30% margin after the wholesaler takes his cut which is $5,000-$10,000 and on one recent deal the wholesaler made $30,000 and my banker still got the property at 50% of market value.  I go through all the transfers on the pva website just to keep track of everything going through and I have seen these transfers and I am like I can't believe they got that good a deal and that was after the wholesaler took his cut because there is just one closing.  How do they get that good of a deal? I would like to know for myself so I could get rick quick instead of grinding out $20,000-$30,000 a fix and flip.

If the price is right they will come.  Every market different, but if the deals are priced right there are serious buyers that will jump on it immediately especially with how good major markets are right now.  If you don't have money for postcards you could try a newspaper add or bandit signs.  I sell houses!CHEAP!

I am fix and flip cash buyer.  I also wholesale but keep all the deals for myself and it all depends on the property and the locate. If you get anything on the southside outside New Circle Rd between Richmond Rd and Versailles Rd we will make you a cash offer and close as fast as you can.  Good luck, Thanks and have a great evening!

Hey Mike I have been appraising in Lexington for the past 20 years and investing with my wife who is a broker/agent for the past 10.  We are currently working 2 fix and flips, 1 in Lexington and 1 in Richmond.  We are also contractors that do all of our own rehabs.  We are closing on a fix and flip tomorrow that I plan to upload before and after pics on the site. I would be happy to talk about any questions you might.  I believe I know the Lexington market better than anybody being a appraiser, investor and contract and married to a broker.  We eat breath and sleep Lexington real estate and happy to help.  Go cats! Thanks and have a great evening! 

Hey Antonina thanks for the post.  I have been appraising in Lexington for the past 20 years and investing for the past 10.  My wife is a agent/broker and we work together in our fix and flip business and we also have several rental properties.  Lexington is a great market and there are most certainly properties that meet your criteria; however, at that price they are not in the best location or condition.  You can get the best deals with cash if you know where and what to buy.  There are properties that sell from $20,000-$50,000 daily they just need $20,000-$50,000 in repairs.  We are also contractors that do all of our own rehabs.  We are currently working on 2 fix and flip deals in Lexington and would be happy to assist you in your property search.  We have loads of experience with exactly what you are doing are would be thrilled to give assist you in your search.  Thank you and have a great day!

Go Cats! I like that and I have been appraising in Lexington and the surrounding counties for the past 20 years and investing for the last 10.  I just did a fix and flip on Gemini Trail in Harbour Village in Georgetown earlier this year and made approximately $40,000.  I love Georgetown it is the second best market in KY behind Lexington.  We currently have 2 properties we will have on the market this month.  As you can propably tell by now it is high competitive market in Georgetown and Lexington; however, there are great deals out there every day you just have to be able to find them and hear lately they have been coming to us because we have a large network that knows we buy houses and my wife is a mega agent/broker in Lexington.  I hope everything is going well and if I can be of any assistance as you get started maybe I can help you learn from my mistakes and everyone makes them in the begining.  Good luck and thanks for the post! 

My wife is also a realtor/broker and we work together with rental properties and fix and flips in Lexington.  We currently have 2 in progress, 1 in Lexington and 1 in Richmond.  It is great that your husband works in construction as labor is always the biggest cost associated with rehab and my wifes commision sweetens the pot every time we do a deal.  We make 3% on the front end and save 3% on the back end.  The 2 of you working together should work out great.  Best of luck to you!