All Forum Posts by: Jason Robinson

All good info guys, appraisal (ACV) came in at $215k, just FYI. Progress has been slow due to permits so waiting to get demo started but ready to take the leap. Should close on loan in coming weeks.

Not sure in my area what % vacancy looks like, since I'm new I don't have anything to go off of for maintenance budget either. I'll have to do more research here for sure. 

As for funding. Bank is offering a construction loan up front on it w/ the as-complete appraisal. They will issue the loan and allow me to draw against it to purchase the home, then do repairs. After 18mos (interest only note) I can convert to a different financing package.

Good to hear I'm not off in left field; I'm sharpening my pencil and digging in deep. Was blessed to be brought up with a variety of experiences and resources. Maybe that'll payoff as I head down this adventure :)

@Ryan Faber - Thanks for the info; I heard about the group this week. Will likely plugin soon. Still gathering information on this property and I'm hoping to move forward with it in a few weeks.

@Gary Parilis - Opportunity is off-market; my in-laws place they moved out of a while back and just kept the property. I don't plan to do much work myself since in reality my day job will prevent a lot of that. Bank I'm working with is looking to do 'as complete' appraisal when I get all my bids gathered. 

House is 1137sqft now; planning to finish out basement for additional 550sqft. Cost of property is $95,500 - built in the 70's. Reno estimate is $50k, would make the property a 3BR/2BA (main floor) with separate 550sqft Studio/MIL Suite in basement.

I haven't been able to find out rules/regs on doing short-term leases in the city; but ideally I would like to eventually rent it out so main living space is long-term and studio/basement was like an AirBnB...This is just where my thoughts have been. Open to input for sure.

I am trying to educate myself in this space so with a couple of podcasts under my belt and some grassroots research this is the napkin math I've done. (Just trying to learn CoC and calculate myself)

Cost $95,5000 + $50,000 reno = $145,500 all in

“AS COMPLETE” with new sqft (~1650sqft) @ $120/ft = Est value $198,000

Bank will loan 80% of AS COMPLETE … $158,400 – covering my reno cost.

When reno is done and we spend $145,500 – convert loan and rent out.

20% down is $29,100 (Cash out of my pocket) – 4%/30YR note w/ 1% tax & 1% ins = $834.21/mo PMT {{guessing here}}

So my Out of Pocket is $29,100 (+ est Closing $4000) so is CoC figured as how much over the payment rent is divided by CoC?

$1,100 - $834.21 = $265.79(*12) = $3,189.48 (annual cash flow)

$3189.48(cash flow)/($29,100 + $4,000)[down pmt + closing] = .096*100 = 9.6% CoC???? – is this correct?

I'm super green so please guide me anywhere you see I'm planning wrong or mis-stepping. 
Appreciate the feedback!

I'm interested in REI as a long-term passive income for my family. (Computer nerd by day) I'm located in Northwest Arkansas and have lived in the area my entire life. I was raised by a tradesman; have seen some construction projects ran and I'm familiar with contractors in my area. I have an opportunity to purchase a home and I would like to check the opportunity with an experienced investor to see if my thoughts/approach is correct. My goal for the property would be to renovate and rent.

Where is the best place to bounce this information on the forums? There is a ton of information on here and I'm trying to be methodical in my approach to absorb as much information as efficiently as possible. 

Thanks in advance!