All Forum Posts by: Jeremy England

 My advice would be get some specific numbers on some type of specific specs.  

Find a floor man and ask him how much he charges for tile, wood, carpet.  Then put that into a spread sheet

Find an ac company and tell them what you are doing and give them the sf of the place, theyll come back and give you some specific numbers on units, labor, options . Put it in your spread sheet.  

Rinse, repeat with as many contractors as you can get to give you some prices.  

Look at home depot, lowes etc and find materials costs.  

That is if you plan on being your own gc.  Otherwise you should contact some gc's and talk generalities with them.  Theyll all say "it depends" but they can also tell you what is unrealistic.  You take a 1920's house to one and say "I want the whole thing redone" and I guarantee you none of them would ever say "20000 sounds about right"  

I was a builder for about 5 years precrash and I used to tell people the base model started at about 75 bucks per sf under roof and we go up from there.  

What are you basing your repair estimate off of?  Have you taken any bids from contractors on similar jobs and compared item cost?  If you haven't you should probably do that to get a more accurate grasp of costs in your market.  

Here I can get tile laid for prices that are untouchable in some markets.  

I'm no expert, but I have made about a dozen cash offers to wholesalers, REOs, and auction sites in the past month, each one the home ended up sold to a buyer paying over asking price.  I think wholesalers are getting paid though.  

I'm watiing to hear back from a wholesaler now.  Is a tough row to hoe in this market.  No room for profit.   This market is fillled with homes in the sub 100k price range so its there are lots of rental opportunities however.  

Based off your numbers, I wouldn't do it.  

ARV: 92k

Offer: 89K, that's near 100pct.  

Your down payment will remain in the property .

Then let's take into account your cash flows.

IF he is being honest 

Revenues: 18000

-2129

-2500

-2400

-1800 (maintenance) (assuming you don't do a complete rehab after purchase)

-540 (capex)

-1620 (management)

NOI: 7011, using the cap rate this property should be valued at like 70-75k

Debt service?  How much will your mortgage be?  Take that away now.  

Whatever you are left with is true cash flow.  Now how long will it take you in those cash flows to make up for that down payment?  

What's your worst case? can you afford it?  If so, jump in and see what happens.  

I never invest in anything that I can't just pay for with my own money (be it payments or cash).  That way if it blows up in my face, I'm good

Mine was dumb luck in 2007. Didn't know jack about ARV's, and what nots. I bought a house I thought was cheap (30k) then rehabbed it. I was in the construction business at the time so I just dove right in and didn't even do any real analysis.

bought it for 30k, put 30k into it, then rented it for 700/mo, refinanced and got my money back out.

 A year later I sold for 85k.  

I got out of the business for about a decade after the crash and just recently started to make some offers again.  Tough time to be getting back in though.  Prices are high,  subs want too much, haven't found any properties yet that I believe were  a deal.  

Looks like a good deal if you plan on living there.  Its not a BAD deal if you don't plan on living there you'll just have to figure another way to pay for it.  

If you are both on the mortgage, both incomes can be counted.  If its just you, then only your income.  

Also keep in mind your closing costs. The VA funding fee is going to be about 10g with this loan.

After reading what @Account Closed posted, you may be right brett.  

I'm not sure about that one.  I mean, why else would the lien be recorded in the county, same place the property is.  If that were the case, wouldn't it just be between the IRS and home owner in federal court, not involving the county?  

I was always told federal tax liens survive the foreclosure.  I could most definitely be wrong however.  

Thanks for the link, i'll check it out