All Forum Posts by: Jason Chen

 Ok, the deal can still technically work then. The profits just won't be as fat or ridiculous as the typical "yo i bought a house for $100k, put $30k into it, and sold it a few months later for $200k after listing it for $225k" kind of deal you read on here.

Even if you manage to make $5000-$10,000, the experience you got from this is worth far more than that, and you got to make money at the same time. What do you think you will LIST the price as when you sell it, and you do plan on using a realtor right?

Perhaps I'm reading something wrong here, so correct me if I'm wrong.

My general impression upon the numbers you provided at first had me thinking that you need to have bigger profit numbers for this to be really worth it. It's your first deal so I understand things aren't going to be perfect.

Then I read about five paragraphs into the inspection stage, and I started to get kind of worried for you because I think you might've overpaid on this property tremendously without realizing it. I didn't even want to read the rest in-depth so I scanned it.

When a property is in need of very serious rehab and repair like this one, and you plan on flipping it, you need to make the numbers make sense. A great flip would've been if you had gotten the property for a ridiculous deal, because the deal just has to be like that to be very workable. This might slightly shock you, but I believe you overpaid by about 80% more than what you really should have paid. I think a purchase price of $50,000 would've made more sense and would've given you the necessary cushion to make what you really should make. I hope things turn out well for you and you at least make $5,000 in profit from the flip.

The problem with major structural problems is that when you sell it, the next potential buyer who previews your property will think "this structure has had structural issues, and it has been fixed. however, there is a similar equivalent property nearby selling for the same $145,000, and it has never had major structural issues that needed to be remedied. why should i buy yours?". And the problem of the issue could potentially arise again even though it's been fixed.

By the end of the day, I take a step back and ask myself, did the buyer win here, or did the seller win? I believe the seller has won in this situation by more than a small margin. He had a property in obviously terrible shape, and was able to sell it for more than just pennies. He's probably pretty happy with the sale right now because he knows how much it would really cost him to fix it (or perhaps he doesn't have a good clue). At under $50,000, I would say that you guys have the upper hand, and it's all about having the upper hand in every deal.

When rehabbing properties such as this, the main objective is to buy them for pennies on the dollar. Even lower than $50,000 would've been great, even if the owner would've had a 99.9% chance of rejecting it. You just gotta walk away from that deal. The owner is also kind of silly for listing his distressed property for basically $149,000 which is $5,000 above your ARV. I hope your ARV was excessively conservative because then this deal at least would make more sense.

Please keep us updated and tell us how things go. This is an exciting thread.

 Please explain to me why it takes the cake for dumbness. Please show me other posts in threads other than this that I have made that seem "dumb"

Definitely recommend tertiary market. Like cities with ~50,000 people. Every city is so unique so I don't want to categorize them too hard.

Multifamily or flipping SFH... im pretty 50/50 on this one. One will generate you cash flow, but youd still be short of your $10,000/month goal unless you get yourself a RIDICULOUS deal for your $300,000. It's still technically possible, but youd have to look for just that right market, and at just the right time with just the right bidding price, and the seller has to be cool with you getting the loan approved or whatever. $300,000 with an additional $600,000 in loans could very well get you that property that gets you maybe $5,000-$6,000 / month. My numbers are rough.

I remember your thread

How are you going to pay for repairs and renovations and such?

Also, I don't know of the specific "rules" about loans that one bank has vs. another because they always seem to vary so much and change so frequently. I'd just keep shopping, reading, and checking back on this thread.

I would replace the locks asap

Anyone could duplicate a key for like a dollar at Home Depot. It looks like whoever came in was just looking for small easy things to steal like copper pipes and such which is good, as it looks like they didn't steal that much stuff and just left cigarette butts around. People will always steal when you leave valuables around, so just be as secure as possible next time. 

Personally, I would show up to the property and drive by at random times at night for fun, and if I saw anyone in there, I would simply just call the cops.

Self-driving and electric cars are very similar to downtown Ocala, FL - they will never take off. They've had decades to do so, and Im pretty sure they still won't for the next 50 years. We will be senile by the time self-driving cars will become even remotely popular.

What is the cost of this parking lot and where is it located in relation to the business areas of the city? IF both seem good, I'm pretty sure you should buy this, and I usually don't say that for most of the deals I reply to here (go read my post history). I believe in the coming years, parking lots will become even more valuable, and theyre a super interesting niche type of investment where you don't really have to do ANY work at all to maintain them.

 I like the student loan idea more. I don't like this one even though it would put extra money in his pocket.

You could just compromise and just dabble in a property or two each year starting at age 21, and do it as a more full-time thing when youre 28 or something. It would probably make more sense for you then to quit your full time job. At that point, you'd still be way ahead than most people. 

The smartest decision you're making is simply the fact that you're starting to seriously research at your age (19?20?). Most people don't really get involved with financial wealth creation until theyre age 50-55+ (when theyre old and arent as vigorous as in their youth age) and have kids to manage and college bills to pay for their kids. Time is of the essence and is the most valuable commodity, and it looks like you started at the right time.

This is a garbage investment

Here's why: asking price of $100,000 a unit

Just LOL @ paying anything remotely close to $100,000 per unit in 2017 when you can buy ultra high-cash flow units for $25,000 each. Tbose prices would be awesome if the year was something like 2138

I am sure if you do 2 more hours of solid research, you can find deals better than this that certainly cost less than $1,000,000