All Forum Posts by: Jimmy Epolito

Had a great call with the GC.  He feels very optimistic that we can complete this home in a timely fashion.  Indy is in a mandatory shutdown but real estate is deemed an essential business so it is business "sort of" as usual.  I feel that the rehab will be complete mid May so which I believe this virus will have lost its steam by then.  Still moving forward and set to close either this Friday or next Monday.  I will keep you posted.  I will admit that my feet have gone from Cold to hot to warm to cold to hot!! That is my personality even when things are great though. I am a cautious risk taker! LOL

@Whitney Hutten Fully understood! I have a scheduled call with the GC tomorrow to formulate a realistic game plan and timeline. I have also kept in close contact with the HML who is positioned with enough capital to weather the storm. I plan to add at least a month to the rehab as I know that things could turn up that are not planned. Plumbing issues are hard to see till you dive in and electrical issues can be tricky as well. I am going to stay optimistic and feel that the Covid19 chaos will be tamed sooner than later.

@Whitney Hutten Thanks for the advice. I have a decent amount in reserve and rehab should be completed in 6 weeks or less. I think the market will take longer to drop significantly. I also feel I was being conservative on my ARV based on surrounding homes.

 Hello Jaron!  Thanks for reaching out.  It is .2 miles south of E. Washington St.  Looks to be a little southeast of the Irvington Historic District. 

Hello All,

I am a new out of state investor and have a grand total of 1 property currently in my real estate portfolio. LOL.  It is cash flowing nicely with a good tenant who currently does not have fear of losing their job. I am under contract on number 2 and want to know your opinions. 

Location: S. Arlington Ave in Irvington

Purchase Price $74977

4 Bed 2 Bath 2370sq feet SFH

Has New HVAC, New Water Heater, Updated Electrical Panel (150A), roof is 4-5 years old with no leaks.  Water was off at inspection so there might be a need to allocate some money in the rehab budget for any discovered issues. House was a foreclosure and looks like it was possibly in the middle of a rehab by an investor.  Might have run out of money after installing new HVAC, Updating Electrical, New water heater, Paint, 1 side of vinyl, etc.

Rehab Needed: $25k (I am figuring $35k to have a cushion)

Scope of Work: Update Flooring with LVP, Update Kitchen with new cabinets, countertops, appliances, paint inside and out (interior does not need paint but has outdated color), update baths, install vinyl siding on 2 sides (2 sides already have vinyl), Replace Windows, Install new entry doors, freshen up the landscape. 

I have been told by a few people that due to the uncertainty that I should forfeit my EM and costs already put towards the process and walk away.  I think that this is panic and fear.  I feel that this property is positioned to become stable sooner than later.

My strategy is to Fix to Rent using BRRRR strategy. Purchase cost per sq ft is $32 Cost per sq ft after rehab (using $35k) $47. Median Sale Price per Sq Ft = $83. Targeted ARV Per Sq Ft. $68

Funding - HML with really good rates, low upfronts, no prepayment, can convert to 30 yr perm as soon as I have a lease signed. Expected rents $1100-1200.

I feel that we will have a tough next few months but also believe we will bounce back.  I feel that it is in a good enough neighborhood that worst case scenario I could still rent it for my anticipated mortgage pmt and take a small hit each month until the recovery happens. I truly believe it will not come to that.

What are you thoughts based on my scenario?

Thank you in advance. 

James

I see lots of comparisons to Italy. I have family there so I can speak from experience. Italy has a sub par health care system which could barely provide quality care before the covid-19. It is all government ran hospitals funded by extremely high income tax. The hospitals have always been inefficient and understaffed.  Italy has the oldest living demographic in the oldest continent on the planet. The masses of death are all occurring in the northern region near Bergamo. Loads of pollution and have you ever been to Italy?  I do not ask this to be crass I ask it because they live completely differently than here in the US.  Cities have homes that are all attached like super long apartment buildings and most have been originally built over 1000 years ago.  I imagine they are not as sterile as US homes. My family who live near Rome has not experienced any symptoms and all of them are calm.  I am not trying to make light of this but we cannot shut our country down because a much lesser equipped country failed.  Italy is smaller than California but has 20 million residents.  All cities are compacted and people live right on top each other. We do need to be mindful and I believe that the elderly and immune compromised need to be isolated but not the young and healthy who respond in a similar fashion to the common flu. Proper nutrition, hygiene, and exercise can keep the healthy prepared to overcome the virus.  A 103 year old in China just overcame the Covid-19 and 82902 others have also overcome it. Currently there are 117,246 global active cases.  117,246 are considered mild and 6439 are consider serious or critical.  These stats do not justify a global shut down.  Looking back at the world ending H1N1 there were 1 million reported cases in the US within the 1st two months. In 2003 SARS was thought to have come from a "never before seen by humans type of coronavirus" Does this sound familiar.  It did not make it very far however.  Anyway, this New Virus is obviously nasty but nasty viruses will always exist.  Feeding the panic and buying into the media hype will do nothing to help us overcome this. We, as a nation of free spirited forward thinkers, need to remain strong and not curl up in a ball.  With all of that being said, am I a little nervous about closing on the 30th of March. Sure! But I am optimistic that my exit strategies I have now will still work in the near future.  Worst case, I rent it very cheaply to help with cash flow until the market corrects, which it will!  God Bless you all!  

I am a newbie investor but I have to disagree with the statement that only a "pro" or someone with a million in liquid should invest right now.  That is too broad of a statement.  I would agree with this statement instead.  Newbie investors should consider the risk, scope of work, neighborhood, exit strategies, and ability to hang on if rent amounts or vacancies are not at the today's current level by the time rehab is complete.   

I am under contract on a home that is not very expensive and in a B neighborhood in Indianapolis.  Once rehabbed I should not have hardly any capex for the 1st year and I am finding it hard to believe that even if the economy tanks that I could not find at least 1 person to rent it for at least my mortgage payment or even a little less until things looked up. And that scenario is if the real estate market completely tanks.  I lived in Atlanta during the dive in 2008 and the rental market exploded because people were jumping out of there homes which were underwater. Homeowners were turning toward rentals far before the foreclosure process even started. My strategy is  to buy and hold and not flip.  If we operate in fear only we will never take any action. I am honestly a little bit  fearful of the worst that can happen but I am also very optimistic of what great things can happen. I am confident that this too shall pass. Even with the DOW tanking 10k points it is still higher than it was in 2016. The government as always will bail out the big businesses which in turn means people will have jobs. I feel thatin a B neighborhood in a great investment city those potential tenants are usually not living paycheck to paycheck. I would be concerned in high crime low income areas and I would be worried if I was working on a 200k house in need of 100k in rehab but I am not.  $75k price $30-35k rehab are my numbers on the one I am closing on soon. Quite a difference in my opinion. 

I pray that each of you and your families do not suffer from this scare and that you prosper financially in whichever endeavor you take on.  

Sincerely,

James

This is the greatest think I have read since all this nonsense started! I am pumped up even more now. I am a new investor but grabbed a good deal in Indy and am set to close in 2 weeks. Needs rehab and should BRRRR well. I am a little concerned with material suppliers being able to deliver to the property and how long will the rehab take now. I am keeping the faith and remember why I entered escrow in the first place. I am a father of 3 girls and 1 boy and the oldest is only turning 6 in July. I am 46 and building a portfolio for the future of my kids. Fear will get us nowhere. Stay calculated and determined. We will get through this. Thanks again for inspiring me!!

 Thank you!  It is in Irvington.

I am pretty excited to say the least. I have analyzed a little over 100 deals, made 30 or so offers, and have finally had one accepted! Set to close at the end of this month. It has been a great early learning process. I found myself early on trying to justify the deals with emotion vs sticking to the numbers. I found myself chasing deals due to my competitive spirit. I hated to get outbid! Early into the process I had an agent make a verbal counter offer and I accepted. As we were preparing the new offer agreement the sellers agent asked if I would like to revise my offer since she had received a few offers over her counter offer to me. I felt a bit angry that she would go back on her word but I do not operate that way. I have principals I adhere to and did not want to compromise those principals just to get a deal. That was a learning lesson and a little deflating. I picked myself up, said some prayers for renewed strength, and pressed on. There were times where I would have 4 offers hanging at the same time which was a little stressful. I know you can easily walk away if you have an inspection contingency but I am not that guy. If all 4 were accepted I would find a way to fund them all. A few nights of lost sleep only to be outbid on all 4 properties. This happened a few times. I eventually ended up with the dreaded analysis paralysis counting every possible penny on each deal. I bid on MLS deals, off market deals, REO deals, you name it! I have bid on homes on the VA foreclosure site and Homepath. Well, the one I am under contract now was a HomePath home and so far it looks to be a winner. It has been inspected and my GC has toured the home as well and we have a game plan. It is in an up and coming neighborhood in Indianapolis and I couldn't be more thrilled to initiate my first attempt at a BRRRR. I felt like sharing this so that other newbies could see that no matter what, you must keep pushing and remove all emotion and use MATH instead. Determine the type of strategy fits your personality and risk tolerance. Determine a market or 2 or 3 which you would like to have properties. Determine what type of tenants you want if you are buying and holding. Determine, determine, and stay determined. It will eventually happen. Network on FB Investor groups and here on BP and get some people on your team with a solid track record who you can trust. Good Luck to all fellow newbies and Stay the Course!