All Forum Posts by: John G.

Damn, it seems pretty rare to find anyone on the "buy all cash" side of the fence!

So I've decided (as of right now anyway) that I'm going to buy the house in Jacksonvile ($11k down) AND the one in Indy ($16k down), and put some money in reserves for both.

BTW, i never mentioned that these are both turn-key. Morris Invest (JAX) and PARC (Indy).

Doesn't writing off mortgage interest and depreciation from the two leveraged properties also heavily favor scenario #1? I just asked my accountant and he didn't mention this.

@Cody L. My goal right now is is to create enough cashflow to quit my desk job.

You're right, the rent for the cash property should be a little less, something like $725. (Guess it's a good rental market!) 

@Alexander Felice As my goal is cashflow (for the long-term), having a house paid of increases this.

@Andrew Cummins The risk I was referring to was actually the neighborhood class of the $42k property vs the other two.

I've been reading everywhere that banks don't let on something like this $43k house as it's not worth the effort for them. Is this only true for some banks, not generally?

A little more detail... cash house is in Jacksonville, the other two are in Indy.

Hola! I'm on the verge of purchasing my first RE investment (s). Keeping neighborhood classes out of the argument and risk aversion is irrelevant, what would YOU do? As far as finances and tax advantages go!? Scenario #1 Purchase one property for $42,500 cash. Gross rent: $750 Scenario #2 Purchase two properties for $61,900 each. Leveraged (25% down, which is $15,475) Gross rent each $750 Debt service of about $242

Considering a PM company that manages rehab projects. Maybe that?

Hi BP Familia,

I'm looking for my first RE investment! Below is my current financial status.

• Have about $40-45k cash
• FICO of 800 and a decent annual salary (low six-figs)
• No liabilities at the moment. No car loan, no student loans, no mortgage (I rent). Though I have some nominal credit card debt (approx $3,000 total)

For the past few weeks I'd been researching cities and turnkey providers. Then last week, I spoke with a guy (referred to me by my RE lawyer) who after purchasing a couple of TK properties, moved to the Midwest and started buying low, rehabbing (using contractors), and then renting his properties himself. He's saving tons of $ on the TK markup. For example, if a TK provider sells a house for at $100k, it could potentially appraise for $80 making a REFI Cashout/HELOC impossible for a while (am I wrong with this assessment?). I get it though - it's a business and they need to make money too. And for many investors, it's worth it. But I want to maximize my first initial investment!

Sooo, I've hashed out this rough draft of a plan (this is where YOU all come in!). Keep in mind that this will happen with me in NY and the property in (probably) Atlanta (possibly Indy). I'll visit initially, but throughout most of the process, I'll be remote.

• Find an investor friendly foreclosure (Zillow/MLS?) at about $80k (assuming I've done my due diligence - ie, good neighborhood, low property taxes and vacancy rate, etc). Get it under contract - contingent on a home-inspection.
• Obtain traditional financing with 25% down ($20k)
• If after the inspection, it's cost effective to rehab, I'll get some contractor bids for the work (references anyone?). This could cost me the other $20k I started off with.
• Hire a property management company that also does rehab/construction management (again, taking references! I've also found a bunch via Google)
• Boom! Now I have a rent-ready, fully-rehabbed house (I'm only interested in SFH right now). So, let's say the ARV is $110k, TK may price this at $130k.
• Have that same PMC place a tenant and manage for the foreseeable future.
• Cashflow!

The way I see it (rough numbers, I'm probably waaay off), I have about $45k cash invested (closing costs, etc) and carry a mortgage of $60k. Versus the TK route $32.5k cash (down-payment) and a mortgage of $97k

Whew! If you're still with me, thank you! Okay, so I'm not totally sure about this plan, but welcome any feedback, suggestions and experience!

John

horowitzrealestate.com

I'm an out of state (NY) (wannabe) investor also looking to purchase a TK property (IN or ATL). I'm wondering if TK property prices negotiable like any other property?