All Forum Posts by: Jeremy Rubin

Wow that's more than I would have expected! Where does one find those stats and similar?

Justin Williams has a Podcast called House Flipping HQ and the content is absolutely fantastic. Just search HFHQ on YouTube. He interviews other flippers and gets down to the nitty gritty step by step actions that they take that make them successful. 

It's your choice ultimately the best thing you can do is hear other perspectives and come to your own conclusion. The right answer for you might not be the best for someone else and vice versa.

My experience: I used 401k money (loan) to purchase my first property. I put 20% down around $50k. Bought a 4 bedroom with the intent of moving out of my parents house and having 3 roommates to help cover the mortgage. So far so good. 2.5 years later that property had appreciated about $63k which allowed to cash out re-fi and buy my first rental.

Now that rental has appreciated approx $60k over what I bought it at and I'm looking to use that equity to purchase another property. It all started with my 401k loan. I would still be saving for that 1st down payment had I not borrowed the money from my retirement. 

Looking back I realize I shot myself in the foot a little by not taking advantage of a low down FHA loan for my first house. But then again I wouldn't have had the ability to refi so soon with a small down.

You can generally only use the FHA 3.5% down on your first property so it might be good to do that first, then put 20%-25% down on your second property using the 401k loan.

I'm 27 so I know I have a lot of time before I'll be taking any withdrawals from my 401k so that played intoy decision as well.

Welcome to BP Brett!

Why townhomes? Just curious, not personally a fan of HOAs as they can change and kill your cash flow unless you pass that along to your tenants. 

Before you spend $20k to $30k as a down payment  just so that you can break even on the mortgage and expenses I would be very certain that the house I chose was either WAY under market value or there is a high probability of appreciation. And I mean high high probability as in they're building a new Hewlett-Packard plant or a University nearby in the near future. And that's still a gamble. Otherwise you're just tying up that money for 15 or 30 years. When the house is finally paid for you will start to recoup your investment. 

Most of us on here look to invest in a manner that we are cash flowing positive each month $100, $200 or $300 or more from day 1.

A safe estimate is that over the lifetime of your landlording that 50% of your gross rent will go to cover expenses, vacancies, taxes, insurance, etc. That does NOT include your mortgage payment. 

Just letting you know what I wish someone had told me before I had gotten started!

Cheers

Seems like a wise choice to me. Hope you don't take too big of a hit. Maybe a private party sale would net you more? Good luck!

P.S. I can't wait for the day that my RE portfolio is producing enough so that I can swoop up a Lambo :)

If ARV is $180k and he's asking $170k he's asking for retail price... Doesn't leave room for you to make any money.

If market rent is $1200 and his payment is $1430 he will be loosing $230 each month he keeps it with it rented. Not to mention tax and insurance and maintenance and vacancies etc...

If he keeps it and doesn't rent it he will be loosing the $1430 each month and possibly paying rent in a new place too.

I would bring these points up with the seller, then I would see if he would be willing to sell for what he owes on the property. 

The purchase price of $170k isn't good for a flip or for cash flow. On the other hand a $103k purchase price will allow you to sell or hold and rent out and put some money in your pocket each month. 

Assuming the property is in Georgia I'm nearly certain you can find better cash flow opportunities if that's what you're looking for. There should be areas not too far from you where you can get close to 2% of the property value in rent each month.

@Chris Simmons

I meet the potential tenants face to face or interview them over the phone. Only after I've pre-screened by getting to know them a little and a little bit about their work/life situation will I ask them to pay for the background check. I don't charge people an application only for credit/criminal background check IF they pass "gut feeling" check. 

I use old fashioned pen and paper for the application or email/scan. For background checks I use Amerusa.com and they're $30 a piece. 

Hey Edgar,

The short answer is yes you can assign a property aka "wholesale" it while there is a tenant with an active lease. The lease is still valid. There are buy and hold investors that will buy a property with tenants. 

As far as the offer, have you done a CMA to see what its worth? Most wholesalers 65% of the ARV then subtract repairs needed then subtract the amount you are charging as a fee. This will give you a ballpark number for an offer.

If you can, get him to make the first offer. When it's too high ask if that's the best he can do. Repeat that a few times until he gives you an offer close to what you have in mind.

Running an ad on Craigslist has worked great for me. Held two open houses a week apart, and found a solid tenant....Saturday from 10am-1pm seems to work well. Post the CL ad with "OPEN HOUSE SAT 10a-1pm, 3bed 2ba in xyz ville" or what ever neighborhood. Post one ad a week before the open house and one a day before. 

Posted a For Rent / Open House sign in the yard the day of along with mylar mickey mouse balloons at each turn from the main street... Lots of pics on the CL ad... pics of the balloons too.

Aside from that bring rental apps, clipboard, pens. I just let the potential tenants walk through, I don't try to sell them at all, if they are interested they will sell me on why they are the right person/family.

I don't commit to anyone that day. Review the applications and contact the most qualified, if you didn't get any good ones throw another open house.

Hope this helps!

Hello everyone! My name is Jeremy Rubin, new BP member here in Santa Maria, CA. Been lurking around the forums for a bit, just recently started posting. Thank you all who have posted questions and answers before me the knowledge on this site is fantastic!

I've been studying REI for the past year and learned a ton from the University of YouTube, BP, etc... This has been a year for cutting my teeth, closed my first wholesale flip and bought my first rental.

My plan for the rest of the year is to purchase 2 more homes by ramping marketing efforts to find deals. The ultimate goal for me is to create financial freedom through both flips and buy & hold properties. What does that look like to me? Work when I want to, not because I have to. Currently I have a w2 job and I can't wait to be able to support myself full time with RE.

Currently studying for my CA RE License and looking to learn as much as I can and share with others what I've learned in the little bit that I have done so far.

Cheers!