All Forum Posts by: Joel Carrasco

@Wes Blackwell similar location and size to the recent sale you shared, thanks for digging that up. Appreciate the advice on the financing, we are going to talk to lenders and family/partners as our next step and simultaneously running numbers again to squeeze this as much as possible before making a final decision. Thanks again for your feedback and support!

@Joe Villeneuve appreciate your feedback, considering the numbers we’ve provided, reducing repair costs to $5k assuming we can do repairs ourselves) what purchase price would make this a buy and hold deal? I heard and read that every house has a deal it’s just a numbers game, so I’m curious where you think the threshold is?

Also any input on the financing question, thanks!

A neighbor urgently needs to sell their home due to medical issues & moving out of state. They want to sell for around $235,000. It’s a 2 bed / 1 bath historic home near central Phoenix, AZ. My home is also historic & I’ve done a lot of work on it, which I don’t mind. The home needs work, maybe $15,000 in repairs. A recent appraisal was $275,000 in it’s current state. Homes in our neighborhood that are move-in ready sell for around $310,000, so it seems to be a good price. I want to get into the real estate business to own rental properties long-term. I want to offer $220,000, make the $15,000 in repairs and rent it for around $1,650 per month. Cashflow will be about $60 (Mortgage $1,143 – Taxes $183 – Insurance $80 – Vacancy 5% $83 – Repairs/Maintenance 3% $50 – Management Fees 3% $50 Total Expenses $1,589). This looks good for the area and I want to hold onto it for the long-term as well as acquire more properties each year.

The problem I am having is financing. I can get a hard money loan for the few months it takes to rehab the property. But when it comes to refinancing, how can I refinance it?

My debt to income ratio is already being used up for my own home’s mortgage and student loans, so it doesn’t look like I could afford another mortgage unless the new properties’ rental income is counted. I talked to a lender and they said in order to count rent as income to help with financing I need a 1 year rent history of a property.

I plan to open an LLC to establish a rental property business. I am willing to get very creative and I know I'll probably pay more because it is my first property.

Is there some way to count projected rental income as income?

Could I get a renter in during the hard money loan period and extend it for a few months to prove income to take to a bank?

Should I bring a plan to a regular bank to see what they might do before I get under contract?

@Wes Blackwell thanks we agreed that it wasn’t looking to be our deal however got a better idea/number from them that might work after all, we are still considering all our options. They are ready to sell as is and it’s not move in ready so owner occupied might have a challenge, unless its someone like me that wants a fixer upper.

@Pamela Sandberg. Thx, sent you pm, happy to explore other areas.

@Jake Saliba thx yes rehab ourselves as much as possible to keep costs down. Thx for the pm, appreciate your insight.

@Sue K. Thanks for the suggestions and additional resources, unfortunately it’s not move in ready so we will have to rehab a bit, at least flooring, kitchen also needs a gas line repair and possibly some insulation. We think we may as well improve it more significantly to get the value and rent up, maybe add bed and bath...still considering all our options.

@Stone Jin thanks for the suggestion, we’re going to explore however I know they have a home equity loan also, so that may make things more complicated, any way to do subject to on that as well as any additional equity they want? Thanks again for your time!

We are in Phoenix and have been really wanting to get into real estate investing. My neighbor wants to sell us their home (single family). They had an appraisal done April 2019 appraising at $273,000. Zillow, Redfin, and some comps show estimate around between $285,000-$310,000. They gave us about a week to consider it before they seek out other options. They urgently want to sell and plan to move out of state this month due to serious health issues. They do have a loan on it, but I’m not sure how much they owe. However, the home is not move-in condition and needs some work. It is a historic home, like ours, that would need the hardwood floors refinished, update the kitchen completely, new paint, fix a gasline issue, and do landscaping (estimating $15,000 in repairs). We would not mind the work of a fixer upper house like this one and have experience from completely renovating our own historic home. Otherwise the home is in good condition, it’s a solid brick home in a cute historic neighborhood.

We really want to get into buy & hold, so we can have rental income long-term. We have run the numbers to buy at $270,000 for buy and hold and it is cashflowing negative. According to the calculator we could only offer $185,000 for it to break even.

We tried running the numbers for fix & flip, but if shows we could offer $260,000 just to break even (we would want at least $20,000 to take on a fix & flip).

We have considered buying it and using the property as a lease to own option.

We also thought about taking over their mortgage somehow or asking if they would do seller financing, but I’m not sure if they are interested or capable of that.

We’ve also considered wholesaling the property, but have never tried that and wondered if it’s worth the risk?

Also, with the virus closing everything down, are people still buying homes or would we risk sitting on it for an extended time until things are back to normal?

Considering all these options, none of them seem like a “deal”, but we don’t want to pass on the opportunity of our chance to get into real estate and possibly own an income property right by us. Is there something we aren’t considering? Is the Phoenix market not good right now for buy & hold? Is that pricing just too high for a fix & flip? How would we go about wholesaling this deal? Would any investors be interested in partnering on this? Does anyone have experience with lease to own?