All Forum Posts by: Joseph Calvano

I just put an offer in on home that I am looking to hold and rent out and wanted to hear some feedback. For those familiar with the area and market it is a section of Plano a few blocks from downtown that is not exactly a great area. I am hoping for the area to turn a bit being that its location is prime to major highways and amenities. While not planning for appreciation in my numbers, I think it can do well over the next 10 years to increase in value.  

Ok, so to the deal. It is a single family 3br 2b built in 2006, 1388 sqf. Most houses on the block are old, built in the 50's and 60's. There are only a few that were tar down rebuilds like this one so finding good comps were difficult. The offer Purchase price is $150k, looking to get for $145k, market is probably around $155k. The home had a new roof last year and everything else is original to the time it was built. It needs no updates and is basically move in ready. Looking to get $1500 in rent, but conservatively estimated about $1450 in my analysis. Being new and conservative I put in cap ex to replace AC and Water heater within next 3 years ($1500 cap ex, $500 maintenance per year.) 

I will purchase for cash using my HELOC at about 2% and hold in there for next 10 months then look to refinance at a 30 year note with roughly 30% down. I will try managing myself but if I add in a PM my numbers get under the $150 per month cash flow, making it tight.

Being new I want to make sure I don't get myself into more work I can handle. I have a full time job that is hourly flexible but sales demanding. If managing myself what sort of tips for background checks, rent collection, legal advice should I line up? No LLC but looking to get extra liability insurance on my own home policy as well as a renters policy on the home to cover my six. What am I missing?

@Account Closed, but great dialogue !

Thanks for all who have replied. I have looked at the Rules and Regulations of the HOA and they do put a limit on rental units at 15% of the 136 unit total, currently they are at 12%. No assurance that I could lock mine down as a rental once completed. They also have in there they need to screen the tenants and approve. I questioned the management company on many aspects of the health of the HOA and they did not answer because this condo was now under contract. HOA dues were roughly 350 per month and I would need to pay them for the 8 months it would take to rebuild. All of this said, cash flow would be tight once rented. I am beginning to see that not having control could of expenses of the HOA could severely hurt my cash flow on this property. This was a good exercise in research and due diligence, but I think I'll continue looking. Thanks!

Thanks for the welcome Sejal! 

I have calculated primitively for those expenses and it still looks good, although the HOA fee is more than the property taxes. Have you formed an LLC to make your first purchase? I want to protect my personal assets but not sure if it is necessary for this first one. I was also thinking of Cash then refinance to free up the cash for future deals.

I am brand new to Bigger Pockets and this is my first post. I have not made an investment deal yet but have been researching properties and strategies for the last several months. I live in Dallas Ft Worth and the area is booming. At first my intention was to flip a house or two and see about making some cash. I currently am a Sherwin Williams sales rep that deals in the multi family industry exclusively, so I have a lot of contractor contacts as well as rental knowledge from the past 6 years. I think instead I am now leaning on a buy and hold strategy. I cam across an HOA community that had a 3 br, 2 bath condo for sale for $145k, right in my wheelhouse! The trick is that is is burned down and in the process of being fully rebuilt by the HOA. This means brand new unit so no rehab! This will take 6-8 months and I am not sure if I want to wait and not collect rent for that amount of time. I should be able to rent out for at least 1750/month. Asking price is quite a bit lower than housing in the area and the location is just off a major highway and 5 minutes from a university. I would be using my heloc on my house to purchase for cash or could look for financing to keep cash flow for other investments. Any advice is much appreciated!