All Forum Posts by: Javier Segura

@Abhi Golhar,

I loved the video! Thanks for your feedback. Please see my message.

Are investors bringing a contractor or inspector to property visits (before inspection process)? If so, are they usually paying for the service or just using one of their connections.

For my last deal that fell through (Kansas City), I could have really used someone with inspection or rehab experience before making my offer. I am on to the next deal and I would like to know what others are doing to ensure a better understanding before committing to a deal?

Thanks,

Thanks @Valerie Hiscoe.

What drew me to flipping is creating a renting opportunity that makes sense. I am having trouble finding properties that are turn key. I am seeing a lot of expensive turn key properties or turn key properties in an area's with low school ratings. I would like to put some work into a property. I this will allow me to fix it up to justifies good rents, have a lower mortgage payment, and in return the property would cash flow.

I will do my due diligence to mitigate my risks, but I am not afraid to take the risks involved.

A follow up question would be:

Should I just be the land lord and if problems occur (repairs or early maintenance), should I just call a property service instead of hiring a property manager?

Hello,

I have a long term goal to rehab properties and Rent them to generate a lifestyle of financial freedom.

How do investors find the time to rehab properties while working a full time job? Are most investors working with sub-contractors to do the work? Are these estimates close to actual cost? Does rehabbing a property require the investor to be on the jobsite? Are there a lot of questions that need to be answered from the property rehab team during time of repairs? What challenges are investors facing or could face when attempting to rehab a property from a distance (At work or out of State)?

Thanks

Javier Segura

Repairs needed are as follows:

Install 3 firewalls in the attic

Replace the 4 back decks

Replace 3 wire boxes

Replace 3 walls with wood rot damage - 10 ft x10ft sheet rock

Small facets and leak repairs

Driveway concert patchwork

Few roof patchwork.

I just don't know what the expect with the FHA requirements and how to get a loan from them with all these replacement needed items.

Thanks @Dan Krupa & @Sarah Ziehr for you interest!

Property deals: 

Property is located in Blue Spring, MO (9/10 school ratings) between 2 golf courses and near a shopping plaza. They property recently renovated one unit and the other 3 were occupied (75% occupancy). The rents were between $595 and $696 ($.54 - $.63 PSF for 2 BR) and the seller was an out of state manager. These units were renting below market price (value opportunity) as 9 apartment complexes were averaging $815/month or ($.74 PSF for 2 BR) within a 5 mile radius (Per REIS report). 

As-Is Cash Flow:

Income: = 30,960 with a 95% occupancy = $29,412

Expenses = $4,200 (Taxes) $3,500 (My insurance quote) $3,000 (R&M @ 1.2% value) $2,125 (PMI @ .85%) = $12,825

Debt Service = Around $13,100 (30 yr am @ 3.25% interest rate)

Cash Flow of $3,487 or Not MUCH!

However, I was focused on the future value opportunity. Seller is in the process of increasing rents to $700/month.  Market rates of $815 would Cash Flows with the same occupancy scenario of 37,164 (Income)  less $12,825 (Exp) less 13,100 (DS) = $11,239.  

My short term investment goal is to stop paying rent. I am going to accomplish this by utilizing an FHA loan to acquire a 2-4plex property with a low down payment (Turn Key property). I would also have the sellers pay for the closing and prepaids.

Long term goal is to acquire distressed multifamily properties for cash or a conventional loan, rehab the property, and flip or hold (depending on the present opportunity). 

I could have asked for all repairs to be made and still been able to increase the purchase price. One year ago, the same structured property across the street sold for $20,000 more (270K) than the current asking price of the this one.  

With the above in mind, what would you both advise? 

Thanks,

Javier Segura

Thanks @Luka Milicevic and @Mike D'Arrigo. I will begin applying your advice.

Hello,

I recently had a 4 plex offer accepted in Kansas City but walked away after I seen the inspection. As I am new, please advise on the structure of the deal and what possible strategies could I use next time (see below). 

Story:

I felt great about the 4 plex property until I receive the inspection list (42 items). I began to second think if the FHA was going to accept the property? The seller mentioned they would be willing to make repairs upon a price negotiation.

The structure of the deal:

Cost $250K. I initially offered $253K with the seller agreeing to cover my prepaid and closing ($7k). Repairs were going to cost around $15k, so I was going to increase offer to $260K (seller cover prepaids and closing cost) and have the seller repair the property to FHA's standards.

Question:

How can I feel confident that the FHA will accept a property after it has been repaired. I did not want to waist the seller's time and money if the deal did not go through.

Thanks for the link @Dan Krupa.

@Mike D'Arrigo - What is the best way to find turn keys that are not listed?

Hello,

I have recently missed out on a few buying opportunities due to great opportunities selling quickly. It seems like enough "sunny days" will cause the market to dry. I am working with a RE Agent in the Kansas City area. I am looking to buy my first multifamily property using a conventional or FHA loan (1-4 unit). What have other investors and FHA home owners done to:

Move quickly to close a deal?

Accurately know how much repairs will cost?

Structure deals that could favor your offer over others?

Obtain great tenants soon after the loan closes on an accepted offer?

Thanks,

Javier Segura