All Forum Posts by: Jiri B.

Hey @William Henry, welcome to BP! Not many multifamily properties here in Raleigh as you have probably noticed. I would recommend first talking to a lender. From your other posts, it looks like you are thinking about putting 3.5% down using FHA loans. Some bigger banks are starting to require much larger down payments to lower their risks due to the COVID pandemic.

If you are not familiar with loans, your estimate of what your price range is might be much different from what lenders will approve you for so talking to them first, might save you lots of time.

The market is still very competitive so just because you can get loan with 3.5% down does not mean your offer will look strong enough to the sellers. Just something to consider as well if you are in more competitive market.

Good luck!

Jiri

No. Pretty much the EMD is the only thing you get after the DD period if they did cash and there was nothing else in the contact about it. Assuming the buyer signs a release form otherwise it can get a bit more complicated but you should still get to keep it at the end.

You will also keep any DD they have already paid to you. I mean if there was any DD monies.

But you should really ask this to the attorney. Every contract is different. I'm just assuming they used the standard offer to purchase realtor form.

@Nikolai Sazonov I think this is the same as with any other industry. If they are not interested in your business, then take it somewhere else who will appreciate it. 

I think this is where the power of referrals comes in play. I'm more likely to work with investor who have been referred to me by previous clients. Sometimes, Realtors just don't have the time or ambition to pursue every lead that rings their phone or sends an email. Although, personally, if you you reach out to someone and they are not able to help, i think they should at least let you know that or refer you to someone else who can.

Also, you said you have contacted 4 Realtors, right? I don't think you will end up buying property with each of them so you can see, that even in your eyes, you are ready to buy, only 1 of those will likely get the commission so you have still contacted 3 other realtors and will give them nothing in return. So don't assume that just because you wave your money around, people will start jumping around around you. 

Real estate is very referral and connection driven business. 

No? The Amazon distribution center creates blue color jobs.. Not saying south Raleigh can't become upscale neighborhood but I would not expect that at all.

@Ryan Smith determining market rent is no different, then determining market sales price. You just look at the properties around your subject property that has been rented within the past 6 months and adjust for any differences (like extra room, garage, corner lot, etc). 

Renters are not as picky about specific finishes and from my experience, it is easier to rent a home with average upgrades than asking higher price for higher end finishes. 

But it also depends on the specific location and the price you charge. If you work with a realtor, ask them to send you rental comps as well when you looking at property to buy. That will usually help you figure out what your top purchase price should be in order to stay cashflow positive. Its pretty much the fastest way to figure out if property is yey or nay.

@Ashley Rummage Yeah, that makes sense. $300/mo seems a little optimistic but hey, even if that ends up $100 something else will still be paying your loans and the principle so I don't think you can't go wrong with that. Depending on how much PMI you would need to pay, you might as well just go with 20% down and not pay for that. Unless you can really refinance in 6 months and pull all that cash out, then it might be ok.

Personally i found it not worth it refinancing that early if i don't have to because it just cost too much in fees etc do that but if you need that money out, it might be worth it. But also remember once you do that, your cashflow will likely be gone.

1970 is not that old, but i would check for asbestos (especially in the popcorn ceiling). You also did not mentioned any bathroom remodels? I would guess those are original? You might be ok just re-surfacing it to make a little refresh. and if the cabinets and kitchen is in good shape, you might just get them painted, do a new laminate countertops and it will look like new and save you some $$$. I would just not go too crazy for this type of rental property.

Sounds like this might be your first investment so I would say if you are feeling good about it, go for it. 150k is a small risk to get started and the experience you get will worth way more in the long run.

Good luck!

@Ashley Rummage To be honestly, getting any SFH under 150k in Raleigh is very rare. Looks like yours would be in Garner, so that seems ok.

Here are some of the items that seems a little off on your report.

- 1300/mo rent in Garner for this type of property is a little too high, i would rather go with 1200/mo for the calculations.

- closing cost 8k? Should not really cost you more then 4-5k on 135k purchase

- downpayment should be at least 20% for investment property, your is about 15%

- 30 years amortized loan at 4.5% does not look like an investment property, so im guessing you are looking at the wrong loan or planning to live in it for a year?

- Also if you are rehabbing home, you won't have much repairs or at least should not have much repairs for few years at least.

- 5% vacancy seems a little too low as well, i would go with 15% to be on the safe side.

- Unless your 30k is cash, you will be also paying interest on that as well.

- 3 months fix timeframe is ok if you know what you are doing and depending on the amount of work, i would rather go with 6 months.

But overall it looks good. I have not seen the home and have no idea about the overall shape or the exact location though so just stating all this based on what you have provided. 

Also if the home is on septic tank and or well, would also add more cost and maintenance.

Hope this helps.

Jiri

Hey @Jessica Bullock, welcome to BP! Are you just starting in RE or have you been doing it for a while?

At first look, this sounds good. I'm in Raleigh NC and the market here is pretty tough for getting positive cashflow. Most SFH which are great for BRRRR starts from 100k+. So you will likely need about 30k for downpayment, closing cost, insurance etc so will be left with 20k. 20k would normally be somewhat ok for a small updates but since you are out of state, it will cost you about 30% to do this because you will need to higher more people. At that point, those numbers are very, very tough to meet, especially if this would be your first property.

I would just suggest maybe looking for something more move it ready (not much of the second R - rehab) in it, but that will allow you to purchase something around 200k which would be a nice 3bed 2bed SFH in good neighborhood. It will take longer for the equity to come around but at least you get into the game. I love doing BRRR but any type of rehab out of state, unless you already have the connections and trusted people in place, will just get way too expensive to make it worth it.

Trying to learn more directly from other investors if this would be something you would find valuable, worthy and be interested in? Please share your thoughts and feedback.

This would initially only apply to investors in the triangle area (Raleigh, Cary, Apex, Morrisville, Knightdale, Wake Forest, etc)

Here are the details:

This is a self served platform when you enter your property info, pictures, contact info etc.

All listing would then go and be posted on MLS, Zillow, Realtor, Trulia, Hotpads, Homes and 60+ other property websites

- One time $100 account sign up / setup fee for each investor

- Each for rent listing would cost $100 (plus 10% commission to the buyers agent of first month rent if realtor finds you a tenant, no commission if you find tenant yourself. All leads goes directly to you. Only realtors getting your info on the MLS would be able to bring you a new tenant)

- Each for sale listing would cost $800 (plus 3% commission to the buyers agent of sales price for the buyers realtor who finds you a buyer. All leads from non-mls goes directly to you so the 3% commission only applies applies if Realtors from MLS brings you their buyer). This would typically save you 90% of the cost, or at least half of the cost if you get your own buyer from the leads you receive)

Would anyone be interested in the pilot program?

What do you think about the cost / value of the program? Would there be any other items you would need to be more successful?

This is really to make it easier for investors to expose their listing and save some cash as most investors pretty much know what are doing and what they need / want.