All Forum Posts by: Jay Dewberry

Property and land owned outright...and Thanks for the valuable info guys!

Thanks for the quick reply @Kevin Romines. I'm not sure there is much equity in the property as it is in bad shape and needs to be torn down. However, I do like the idea of possibly using the fix/flip and construction lenders as an option. It would really depend on the terms though. I was thinking of the loans that they give to people that want to reside in rural locations as well. Terms for those tend to be favorable. Thoughts?

I have a family member that owns a small, dilapidated home on three acres of land. She wants to tear down the home to build a new one to serve as a rental property.  I wanted to know if there were lending programs that will allow her to build/rebuild a new home for the purpose of renting, even if she has to reside in it for a year(as some loans do)? She is a veteran and the property is in a rural part of Georgia. Thanks in advance for any direction you can point me to.

Henry Ford once said:

"If you think you can do a thing or think you can't do a thing, you're right."

He also said:

“Nothing is particularly hard if you divide it into small jobs”

Once you get to the point of feeling overwhelmed, take a breath, sit back and divide your goals into smaller more manageable stages. Then as you accomplish each smaller stage, it brings you closer to your overall goal, thus giving you a sense of progress, success, and completion. Just thoughts. Good luck.

Firstly, welcome to BP Ben. Secondly, that's a tough call to make. My initial thoughts would be to make the improvements in order to justify the increased rents. At least then, you'll be close to a break even point, and you can write the improvements off on your taxes. I assume you're also writing off the depreciation as well. This could be a huge offset with the negative cashflow issue. I hesitate to mention selling, as you've had the unit for over 10 years and it sounds as if the property is in a desirable location. My only other thought would be to take the $10k and put toward another investment property that cashflows significantly enough to adsorb the negative from this property. Just thoughts. Good luck.

I factored in 10% PM, 4-5% Rep/Maint, 4-5% CapEx, and bumped up the Electricity figures as I doubt that it would be only $50/mo to provide elect. for two units(fully rented). But again, this was just my rough estimate. I'm sure once you've gotten all the hard figures, it would provide a much closer picture of the return on investment.

Hi Bryant. Make sure to run these numbers in the BP Calculator. From my initial look, this does seem as though it would be a cash-flowing property once its fully rented. However, I'm seeing more of a $450ish/mo in cashflow(unless you don't have to pay for tenants electricity). Your PM seems low. Most PM's would charge around 10% of the rents plus a one month for signing a tenant. Is there any rehab work needed? This would need to factored in as well. Otherwise, it seems solid as a positive cash-flowing property once its fully rented. Either way, good luck on the purchase. If you do decide to purchase, I would be looking to have this fully rented on day 366 of living there.

I suppose that would depend on the layout and residential builders requirements for land development. I know he isn't in AZ, but @Jay Hinrichs is a BP member and is a developer. Perhaps you can gain some insight from him. Just thoughts.

With conventional lending, you would be required to put down 20% in most cases. If house hacking and wanting to put 5% down, perhaps an FHA/HUD loan would be up your alley. As with the asking price, at $140k, paying 2100 in taxes and the water bill, you would be cutting it very close (with both sides rented), so you would have to ask how much am I willing to risk in negative cash flow to make this deal happen. Keep in mind, with house hacking method, you would most likely have to reside in the unit for around 1 year to fulfill the obligations of many loans. As with the acceptable offer, that would depend on several things: Market(Sales Comps), investment goals, repairs needed, ect. Just some initial thoughts. Good luck either way.

At my very first REIA meeting, I had several people approach me and network their ideas, and investment goals. During that meet, most asked for a business card, despite it being my very first time entering the arena. You may not have to have a logo, business name, website, ect, but to have a card with basic contact info on it, and your area of interest in the Real Estate market couldn't hurt. There are several inexpensive templates out there (Graphic River comes to mind) that you can buy and customize. Then get a couple of hundred printed up for now. As you advance in your investing career, just update the card info and go from there.