All Forum Posts by: Jose Lopez

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Thanks for your input @Randy Thomason.  

May I respectfully ask what the average cash flow on your properties for you to view $250 or more per month an unacceptable number?

Even if I end up spending $10K out of pocket to finalize this deal. With a projected 5% vacancy rate, and 10% factored in for annual operating expenses, and a conservative $800 per month rent, I'm still calculating a Cash on Cash ROI of 19%.

If possible could you provide slightly less subjective feedback, and share with me what you think an acceptable cashflow should be. 

Thanks again,

Jose

@Account Closed, and hope to learn from your responses. 

Thanks,

Jose

I'm excited to share that the listing agent just contacted me to inform that the seller has accepted my offer to purchase their home subject to their. Unfortunately, this home was listed on the MLS, so I will have to pay the agent commission, and legal fees. However, I'm very excited to include this home into my portfolio, as it's in a trending location, with LOTS of investment and development in the area. I feel this home has tons of potential. It's a SFH 2/1 w/ carport, Brick house, concrete foundation, newer roof, and practically across the street from a community college. The property can cash flow in it's current state, and is move in ready. However, since I plan to hold this property, we will be rehabbing it before I refinance it under my LLC. I'm hoping to force enough equity to cover all of the closing and processing fees, and hopefully as much of the rehab as possible. Although, I'm not expecting to force enough equity to cover all of the rehab. But the remaining balance would still be less Out of Pocket than closing costs on a conventional mortgage.

Here are the numbers:

Purchase price:        $57K (remaining balance of loan)

Agent commission: $3400

Legal Fees:                 $600

Rehab Budget:          $8000

Expected ARV: $80000

Assuming I max out the rehab budget, this would put me around a LTV of 80% +/- at the time of refinance.

Any investors that are experienced with Subject to sales have any words of wisdom, past practices, lessons learned to share with me?  I would greatly appreciate input from any experienced investors.  

Thanks,

Jose 

This was a great meeting with a lot of useful information.  Thanks again for hosting these meetings and for finding such great speakers. 

Congrats to you and your husband @Nita Martin!  Please update the thread as you make progress, I'm interested in hearing how it went.  

@Bill B. that is good to know!! Thank you!

Thank you @Brian Garrett! 

Hello everyone,  I just received the appraisal report back for our first rental property (scheduled to close first week of Jan).  In the report it gave a sales approach, cost approach, and an income approach.   I understand the difference between the 3,  but not sure what significance they have, for example when leveraging a property.  

Any information or feedback would be sincerely appreciated! 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $79,500
Cash invested: $19,500

We are closing on our first rental property January 2019. It's a 3bed/2bath single family home. It's in turn key condition, and is only 11 years old.

What made you interested in investing in this type of deal?

Creating additional income streams and growing long term wealth.

How did you find this deal and how did you negotiate it?

The property was listed on Zillow for $85K. We saw the property within the first week it was listed. We felt like it was a good fit for us, considering it was in such amazing shape and we had a lot of experience with the area. We had a fair amount of information going into the deal, such as the contractor that build the house, rent comps in the area. Using our pre qualification letter and knowledge of the market we were able to get the property for $5500 below asking.

How did you finance this deal?

15 Year Fixed, with 20% + Closing through our local credit union.

How did you add value to the deal?

Unfortunately, since the property was in excellent turn key condition, there isn't much room for value add.

What was the outcome?

We had an experienced property manager view the house at the same time we had the home inspection. They validated that we were right on the mark on what we hope to bring in for monthly rent. And it turns out they manage the identical property that is right next door, and stated that they have had zero issues finding long term tenants at that price point.

Lessons learned? Challenges?

We ended up buying this property for only a few thousand below the appraisal value. We were eager to make a deal to get into the business. I feel comfortable with the deal we put together, but realize that the ROI is not as high as it would be on a value add property. I learned a lot making this deal and the next deal I make will have more room for value add.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

We worked with the listing agent, and our credit union.