All Forum Posts by: John Horner

I would do everything you can to get a land contract with $1,000 down and balloon in 3 years. You can refinance then as long as the equity is there! This will get you the highest return with least amount down. If its that good of a deal and you just want to build cash reserves you should be able to wholesale quickly.

I would download all of Sean Terry's podcasts and listen to them carefully. He lays out exactly what to do within the first 30 episodes.

Thanks for the insight!

Peter Lohmann, would you mind giving us your insight on Linden and Hilltop for rentals? Those seem to be the 2 areas with the cheapest properties but higher crime rates. Do you recommend buy and holds for those areas?

Step 1 - Create an extensive cash buyers list with the specific criteria that each buyer is looking for.

Since you have already signed the contract, you want to start escrow with a title company. I would ask around and find out which title companies are comfortable dealing with assignment contracts. Many do not.

You will get paid when the buyer gives your the $1,000 - $2,500 down payment, and then the remainder during the simultaneous closing.

Do you have a cash investor in mind for this property, or are you just starting to look for one?

How many days do you have to close?

Hey Jake Kilfian, welcome to the Columbus Market.

That variable rate loan is a concern. That being said, your cash flow, cash on cash return and CAP rates all look fantastic, so I think you could still make it work.

Have you tried other lenders? Are they requiring you to get a commercial loan because of there are 5 units?

Maybe Dustin Faeth could chime in, I know he has done some deals in the Linden area.

It looks like the northern end of Linden is not too bad crime wise, but the south end is very rough with high crime rates. The further away you are form the multi-family housing, the better you will be.

If you haven't yet, I would contact a property management company who is familiar with that area. They will be able to give you an idea of vacancy and eviction rates, what they think it should rent for, what problems or expenses you may incur in that area, etc.

Hope this helps!

Don't feel like you have to answer, but my analysis relies largely on Cash on Cash Return. So for me it would depend on how much you are putting down, terms, etc.

Also, the difference between what your tenants are paying and the going rates is huge. At $1650 gross monthly I think it would be tight. If you are confident you could get $2200, then it looks pretty good to me!

One thing to look for is property tax, are you in Hilliard or Columbus Property Tax?

I have lived in Hilliard for 2 years and looking back at our property history, our real estate taxes have increased by $100 every year for the past SEVEN YEARS. May want to calculate for those increases if you will be paying Hilliard property taxes.

I would not rely on Zillow for comparison. You should really be doing your own comps for the area, comparing amenities, square footage, bed/bath, etc.

Try to use comps that have sold within last 90 days and within a quarter mile, if nothing is available then us 6 months and 1/2 mile. The further you go in date and radius the less reliable the comps will be.

Once you have the comps, you should take 65% to 70% of the ARV (after repair value), subtract any repairs that need done, closing costs and your fees. You will be left with the highest amount you should be putting it in contract for.

Example:
ARV=$300,000
65% ARV= $195,000
Repairs = $10,000
Closing costs = $5,000
Wholesaler Assignment fee = $10,000
Maximum contract price = $170,000

Using this calculation, the max you should contract the property for is $170,000, and flip it to the cash investor for $180,000 with him paying closing costs.

Thanks Mala S., I'll definitely check that out!

I just wanted to throw this out there to the newbies, like myself. I have been doing a lot of analysis in Columbus, OH and stumbled upon Trulia's Crime Map.

The Crime Map breaks bigger cities into specific neighborhoods and you can see exactly what kind of crimes and how often for a particular neighborhood.

I am newer to the Columbus area and I'm familiar with the West side, but when it comes to the East side I use this tool to help me find the better areas for buy and holds.

I have no affiliating with Trulia.com, not that they would need me, but just wanted to let everyone know what a great tool this is.