All Forum Posts by: Jeremy England

Pretty vague questions.  

I think you need to read some books on valuation and investments strategies.  I can recommend J Scotts book on flipping houses and Anson Youngs Finding and funding deals.  

Its not an all cash offer if you are financing.  It is a financed offer.  An all cash offer would literally mean you can show up to the closing with all the money in cash, the advantage is fewer hassles, fewer costs, quicker closings.  An all cash deal can be closed in about 4 days.  A financed offer will take weeks or months.  

Whether your offer is realistic would depend on many factors.  Seller motivation, condition of property, comparable sales, etc.  USe the search feature  here and do some research.  Read or listen to some books.  You don't have to buy any if you don't want to  either.  You can find similar books at amazon for free that use similar strategies.  

back to your ira, just like if you had it in the stock market

Lend some, I know I could use some private money.  Thus far i've been going it on my own.  Have your people contact my people (by that I mean pm me lol)

Things you could do with 20k self directed IRA:

1. Offer rehab hard money financing to other investors. Lots of HML wont lend so little money, some have a 100k minimum so you could have an advantage there. Some investors spend their cash getting the property and need money to finish the rehab. Just read up on lending and the ins and outs of it to make sure you don't get screwed. You could end up foreclosing on a property that an investor didn't pay you on which could be good and bad.

2.  Offer transactional funding, granted this probably wont be an option for so little money, but you never know.  

3.  Partner with another investor contributing 20k.  this is a good option.  The other investor would be in charge here and you are simply a money guy.  You are essentially investing in his business.  That makes it nice and legal for IRS rules.  Even if you are simply investing in his business so he may take that money and buy 20k worth of marketing, this could result in huge returns for you

I'd sell the first one, you aren't cashflowing enough to cover all expenses.  You could likely even take a small loss, reinvest those funds toward 2 or 3 less expensive properties.  Just make sure you are cashflowing.  A good rule of thumb is 40-50% of rents will be used for expenses.  Then debt service.  

Property mgt: 9%

Vacancy: 8%

Maint: %5

Capex: 3%

Property taxes:??

Insurance: ??

THEN debt service.  What's left will be cashflow

A true cashflowing property means you have all bills accounted for, and do not have to lift a finger, its true mailbox money.  

1. Water 3x day for about 15-20 min

2. You may not have good root to ground contact on those brown areas.  I'd suggest taking some top soil and filling in the gap between the two sod pieces. Or take a garden spade then cut out the area where the grass is pulling away and replace with top soil or another sod piece

Whatever you chose to do, negotiate the price down.  I replaced 4 windows here in florida and due to all the energy crap, wind crap and what not, the first quote I got was 4000 installed.  I called two more contractors then negotiated with the cheaper one down to 2400

I know the right answer here and that is to legally evict, but I also don't think you'd be prosecuted if you waited til the guy left then went in and changed the locks.  If he calls the cops, they'd show up, see your paperwork and be like "its a civil matter".  Then the guy would be forced to go get a lawyer.  Don't think there would be many juries siding with him.  It may teach him a lesson, but itll end up costing you money. 

Treat it as business.  You could try the self eviction, if the dude lawyers up, then pay him off.  

I'd like to get some opinions from bp on the rehab.  The house currently has tile throughout, however, the br are different color tile than the hall, and the 1 bath has a different color tile than the br.  

Durable?  yes

Aesthetically pleasing? no

Cost for tear out and replacement of br tile and putting carpet down might be about 750-1000 for the 3 bedrooms.  It will not get me more in rents, but will probably get the house rented quicker imo.  

I'm thinking its not worth it but like to hear from others.  

So I got back into rei this past few months after sitting on the sideline about 6 months before that.  I'm a former builder who got rocked pretty good in 2008 then took a job out of state and just recently moved back to the gulf coast.  

Anyways, so I found bp, soaked up the podcasts, read the forums, started to apply some of the ttp's.  Found a couple realtors that had similar mindsets, networked with other investors, made offers on auctions, reo's, wholesalers, and continued to grind.   so now I got a property under contract for about 62pct of its arv.  I found the property by tracking a fsbo that was in reality an investor who picked the property up at auction.  Rehab should cost no more than 15k (realistically it might even cost less than 7k depending on what I decide to do with it and how much I'll do myself.

More importantly I am not using any of my own money.  I got this property with the use of a personal loan from Sofi.  They gave me 100k at 8.6 pct amortized over 7 years.  Making my payments about 1590 per month but only 600 of that is interest, the other 1000 is principle.  I got the loan about a month before this purchase for a trustee auction but the auction was cancelled so I gave myself 3 months to either use the funds or repay the loan and call it a 1600 loss.  The use of the personal loan was invaluable because I could realistically make all cash offers because the money was sitting in my bank account. Plus closing costs were a fraction of what I have paid in the past.  Quick closings etc.  we signed the contract this past thurs.  We close tuesday.  Sofi may or may not be an option for some, they only lend to people with high credit scores and high incomes apparently.  I do ok with my ft job so I took advantage.  

So the numbers (so far) are:

Purchase price: 62k

ARV: 105,000

Buying costs: 961.00

Rehab: 7-15k

Unsure of what the holding costs will be until its rented but I'm estimating 4 months.

Utilities: 650

Taxes: 300

Insurance: 500

Interest: 2400

So I'll be in it for about 70% ARV.

Projected rent: 12000

Costs: prop mgt: 1080

Maint: 600

Capex: 360

Utilities: 0 (tenant pays)

Vacancy: 1200

Tax: 800 (this will go up in october but maybe only 300)

Insurance:  still getting numbers but no more than 1200

NOI: 6760

Debt service will be accounted for after rehab and when I find a good refi option, but I figure I'll pay about 5.5pct and have lending costs (unsure of what those will be) associated with it.  Theyll require a survey, and I'll pay some origination.  

That should leave me with all my money back and a property that cashflows at $149.00.  I'll go do it again after.  

If I get held up with seasoning periods to refinance i could be looking at an additional 1200 in interest costs. 

We'll see how it goes