All Forum Posts by: Jon Arthur

Welcome to BP @Aniket B., Like Dawn said it is always good to have another person from NC on!

Welcome to BP @Eric Sample, when you start finding deals let me know I'm not to far from Fayetteville.

@Lee Huffman 

That does not sound to bad on the numbers. I guess you have your brother to look after the houses for you? 

Fayetteville is only about 20 to 30 minutes from me, it is interesting to hear about more and more people that are doing investing in NC.

Good luck on your investing!

@Michael Hassell and @Wendell De Guzman 

The idea of doing owner finance does look promising and it may be the way I go with this home. My main end goal is to have rental property long term, but if I could get my money right out of this one and move faster to the next one that would be awesome!

I do not know if I could keep finding these properties at this price. It was dumb luck finding something so cheap in this area. I will be calling on every for sell by owner for now own.

@Bill Roerich Welcome to BP! 

I think with the small size of the home I can learn most of the same stuff as a larger home and apply them next time when I do buy a larger home. I think the tub needs to go but I will look into the kit, I guess Lowe's would sell that? I actually like the kitchen sink. It is an old farm house sink, I would like to put it into a new cabinet with a new faucet.

I was thinking of having it covered, and when I was out at the house today the contractor said he has just covered it before and everything is fine as long as he is not cutting into it and getting it in the air. But I know that will be one of the biggest cost and if that could wait that would be ok with me. I did not know you could power wash asbestos. I will check with the town to see if its ok to just cover over it tomorrow.

I do think sanding the living room will be a good possibility the other 3 rooms do have some water damage and would need to be taken up. The living room is the first room of the house and would add a big impact to a future renter.

After looking up what Pex is it does look like the type of piping that would be easy to use due to its flexibility. I better get some other tools first like a cordless screwdriver and a skil saw. I have always borrowed tools but I think I should own some tools.

I was looking up how to put replacement windows in on YouTube and it does not seem that hard. Maybe with the contractor there fixing other things around the house he can show or tell me how to put one in.

The home owner was saying the Habitat for Humanity store had a lot of good thing that are a lot cheaper than buying from Lowe's. Looking for a cheaper way to get materials is something I'm interested in and I have no problem reusing quality items.

I do think painting the panel will look the best for this home and it should be the most cost effective.

Haha I'm not sure if you would want to move to NC for this house, but thanks for the post and great ideas!

@John Moore 

It does have a septic system so that is a good thing. Why would the size of the property matter with a drain field? Also Sewer runs by the home so maybe that is something I can fall back on if something big happens.

City water is hooked up but turned off, power was on and seemed to work everywhere in the home.

The home is right out side of town but is in it's ETJ. What do you mean isolation distances could be a challenge?

@Rick Baggenstoss 

I would like to put a new roof on, siding, windows, doors, flooring, cabinets, lights/fans, paint and ceilings(maybe). I would have to look into what else I need to do. Things I can do and have done before would be like painting, putting up lights, and laying floor. I would like to learn how to set the cabinets, hang Sheetrock, and put a sink and toilet in.

I was defiantly wrong about the 5% on vacancy I got that out of the Modern Real Estate Practice book for NC. How would I calculate that better? 

Why do you say I would have to replace the roof every 10 years? I was thinking if 20-30 year shingles are put on then it should last for a bit longer than 10 years.

@Scott Stevens 

I also agree with you and @Rick Baggenstoss there may not be much worth saving, but at the price I can get it I don't think it is a bad deal. I know this thing will be a headache for a few months and that is ok. I do not know a lot about fixing a home, I have helped on fixing up other family owned homes but that is it. I hope to learn a lot by doing it, and I'm certainly not going to try and do it all by myself. I would let a contractor do everything on the outside, roof, vinyl, doors, windows and HVAC.

I can only wish this would be like the TV shows well 30 minutes in and the house looks great! Not going to happen here and I understand. I keep looking at the numbers and that gives me comfort. The contractor will have insurance so if he messes up I guess that would be covered? And I know there will be some Big problems that come up, but that goes with every house right? I do not see the home selling for more that $40,000 at the time, I do hope to clean up the area and make it more desirable to people.

@Rick Baggenstoss 

I under stand were you are coming from. It is a lot of cash to put upfront. Help me with the numbers. I talked with the home owner today and he will take $5,000 for the home.

So...

Price of home:  $5,000

Numbers to fix: $20,000 (will confirm tomorrow with contractor)

Projected rent:  $500 to $550 or $6,000 to $6,600 per year

GPI:                 $6,000

(Vacancy) 5%:  $300

EGI:                 $5,700

Tax:                 $168

Insurance:        $500 (will confirm tomorrow)

Maintenance:   $600

NOI: $4432 or $4400 for easy numbers

No debt service!

BTCF              $4400 or $366 per month

Cash on Cash $4,400/$25,000 17.6%

Is that awesome? maybe but probably not for the first year. How do you find out your cash on cash when you have no mortgage on the property? I probably will use a bank and get a mortgage on other properties but it does not make sense on this one.

Help me see what you see.

Right now I'm living in a home owned by family and I'm not paying market rent by no means. I think it is best to stay were I am for another two years. I'm ready to buy for myself and stop piggy backing off family, but for two more years or so I could save that money and buy more homes.

Thank you for any Information you can give me!

@Kendall T. 

I think letting a contractor live there and fix it up rent free is an amazing idea in theory, if the person could keep their word it would work well. I could not see someone getting it fix as fast as I would like but that would be awesome. 

I'm not looking to do a seller finance deal for this type of property.

@Jameen Adams 

I'm just as new as you are when it comes to buying homes, from what I understand you get the title searched for know that it is free and clear. I might not want to buy it with a cloud on the title/deed.

I'm going to talk with an attorney tomorrow, get a contractor to come look at the property and get some more information on the numbers.

Also the home just behind it is the brother of the $6,000 home.