All Forum Posts by: Joseph Weisenbloom

I vote cash

Was the first property you mentioned a short sale? Someone could have been waiting for 100+ days for an offer to be approved by the bank. Or you could just be in a hot market. I know down here properties that may have been sitting around for a while are getting snatched up like gangbusters. I made 4 offers during the month on January all were snatched away from me by investors that were paying above asking price. I cant speak for your area though.

As far as if the realtor is tipping someone else off about the property or buying themselves I find this less likely. If this was a repeated thing then OK I would be suspicious but after one time? I dunno.

BTW appreciate the use of the word shenanigans :)

I see you are from Lowell I used to live in Westford so I am familiar with the area.Id be interested in seeing some more numbers as far price of the home and monthly rents. I noticed you said cash flow after both mortgage payments and tax and insurance is $1100. Don't forget major expenses in there like vacancy, maintenance, management and utilities. I haven't lived in the area in a number of years but I remember Lowell having some sketchier areas just make sure this property is in a part of town you are comfortable in.

As far as determining equity a property under 4 units is typically evaluated with comps. This is something a Realtor would help you with to pull comparable sales in the area of similar properties.

If the numbers you give are correct this looks good. The only thing I would caution is don't underestimate those repair costs. I know just a fridge and stove would exceed your projected budget of $1000. Get the house inspected make sure there are no other issues that are not readily apparent from just walking through the house.

This property is similar to the property I am currently working on closing right now. The cash flow per month isn't spectacular but I am investing so little into the project that my CoC % return is still high. Good way to dip your toe in the water of investing without too much money.

In my opinion I like buy and hold more than wholesaling because it is the easiest way to start out. People flock to wholesaling because you don't have to invest anything other than marketing. The truth is in order to compensate for lack of funds you need to have a strong knowledge of the market which newbies don't often have. I would be interested in getting into wholesaling someday but after I get a stream of passive cash flow. My 2 cents.

So @Cal C. $2500 per house is a safe amount to have stashed away? Does it depend on the size of the house? For example $2500 for a SFH and $4000 for a 4 plex. Does this change once you have more houses and more readily availiable cashflow?

I am about to acquire my first property and I need to plan this out.

I'm curious how others are handling this as well. How are you guys organizing your funds? Everything in one account seems like it would be hard to determine which funds are for which property. On the flip side if there are multiple accounts it could get cumbersome after a while like @Adam Craig is mentioning.

Welcome to DFW and BP. The Dallas BP community is very strong so make sure you come to one of the BP meetups.

Becoming a real estate agent is certainly one path to learn the industry. Any job related to real estate would be a good place to start. What I did when I just started is to go on the MLS and start looking at houses in our area to learn your market. Crunch some numbers and see if you can find a deal just for practice. Go knock on doors in an area where you are interested in investing in and become an expert of area rents, house prices, inventory and what other investors are doing.

As far as meeting local investors I have met lots of friends through my local BP meet up which meets once a month. I'm not sure if they have this for Houston but our Dallas chapter is very strong.

Good Luck

@Kenneth Hynes I will make sure lead paint is added to the review.

Any idea how much it would cost to have the water separated? I think its a lot more expensive to have the city come out and add a meter than just add a smaller sub meter. I talked to one contractor and he said that it would be around $1500 but that seems ridiculously low.

@Joel Owens

I agree a full inspection of the house needs to be done to determine the condition of the necessary components. I have yet to do that and plan on getting an inspector review before I move further.

I was not aware that there is financing difficulties with two house on one lot. I was planning on going FHA as you guys could tell. Does FHA inspection usually not approve this kind of set up? Is there any way to work around it?

I do think given the numbers it is worthy of further review. I was going to ask you about water because water bills are a cash flow killer and I would rather defer this to the tenant if I could. How do you usually handle these? I was considering just lowering the rent and putting the water bill in the tenants name but that seems borderline unethical/illegal to have the tenant paying my personal water consumption. Or I have heard of people installing a small sub-meter system to monitor usage.

@John Chapman

I was trying to be conservative in estimating numbers but I'm still learning. Its good to have local guys that are actually investing in this market. It sounds like you think the numbers are good contingent there are no other major repairs? What about water what do you usually pay for water, sewage, and garbage?

I did not know that it was customary for the seller to pay the realtor fees. That is good because I'm trying to put as little money in this deal as I can.

@Bill Jacobsen

I'm not sure I quite understand your logic on the "PMI you will be paying above 5.65%" maybe explain your numbers a little bit more. The reason I am using FHA is because I was not able to get conventional financing at 5% down for 2 units. I would much rather get conventional but all the lenders I have talked to want a minimum 25% for 2 units or more. If you could figure out a way to get me conventional that would be awesome.