All Forum Posts by: Joshua Parsons

Hey everyone,

Im curious if anyone has really long distance investing (international)? 

My wife and I are starting to delve into the rental market in Italy and we were looking to see if anyone else has experience investing in Italy. 

Background: We travelled to Italy a year ago and fell in love and recently found out that my brother-in-law is going to be stationed in Italy. We would love to purchase a place near his base for him to live in while he's stationed in Italy, but we don't know anything about the rental market after he gets stationed elsewhere. Any tips would be greatly appreciated!

We are remote investors in the area and due to the "low data" that most websites have on the South Bend area, we take several different websites and average them together. Our go to are usually Avail, TurboTenant, Rentometer, and Zillow.

Nick, not 100% relevant to your post but my wife and I invest in Mishawaka, do you get many properties there?

also: we would be interested in anything within .25 miles of ND if you see anything there 

Quote from @Account Closed:

Quote from @Joshua Parsons:

Quote from @Robin Simon:

Quote from @Joe Villeneuve:

OK.  I'm trying to understand the math here...which is very confusing.  I'm making a few assumptions here based on the limited info given above.  Here goes:

1 - The PP = $95k
2 - You didn't put in a Down Payment, because that would involve cash and the ...
3 - Cash invested = $15k, which would barely cover the cost of the "new floors, soft floor fix, fixing a wiring issue, and moving the lndry room.
4 - Not sure where the "new roof" cost falls here.  When you say "negotiated in" I'm assuming the roof was replaced by the seller without increasing the PP beyond $95k.

Is that all correct?

Also, if this is a hold, what are the projected monthly expenses (taxes, ins), mortgage payment and rent?...which will generate your monthly Cash Flow?

The statement that has me both stumped and concerned is under the "Lessons Learned" question, when you answer it with the statement, "Always have backup plans in place for financing".  What does that mean, and how does that apply here?

 Agree - what is the story behind "backup plans in place for financing" - curious to see what happened here / specific lessons learned

The first mistake was on us, we thought we had all our ducks in a row for using a HELOC, but we didn't. Then we tried to do a hard money loan for purchase and renovation and they kept adding addition funds that we needed to bring to the table until at the end of it we were priced out. We ended up doing a conventional loan and cash out of pocket for the renovation.

Congratulations Joshua. I am curious, what hurdles did you run into with the HELOC strategy?

The way we purchased our primary residence offered down payment assistance, we didn't realize that they basically used a 2nd mortgage to come up with the assistance. So we would have to pay that off to get a HELOC

Quote from @David Ingram:

Quote from @Joshua Parsons:

Quote from @Joe Villeneuve:

OK.  I'm trying to understand the math here...which is very confusing.  I'm making a few assumptions here based on the limited info given above.  Here goes:

1 - The PP = $95k
2 - You didn't put in a Down Payment, because that would involve cash and the ...
3 - Cash invested = $15k, which would barely cover the cost of the "new floors, soft floor fix, fixing a wiring issue, and moving the lndry room.
4 - Not sure where the "new roof" cost falls here.  When you say "negotiated in" I'm assuming the roof was replaced by the seller without increasing the PP beyond $95k.

Is that all correct?

Also, if this is a hold, what are the projected monthly expenses (taxes, ins), mortgage payment and rent?...which will generate your monthly Cash Flow?

The statement that has me both stumped and concerned is under the "Lessons Learned" question, when you answer it with the statement, "Always have backup plans in place for financing".  What does that mean, and how does that apply here?

 Sorry left out the details in all the excitement!

list price: 110,000

PP: 95,000 

25% down. 7.625% rate

Negotiated the roof as seller pays after the home inspection so no out of pocket cost to us.

we estimate $15,000 in renovation costs for an ARV of ~$130,000

Mortgage payment of $508

Insurance and taxes $300/month

$160/month property management 

$250/Month for the repair fund

estimated rent of $1300/month

 Stupid newb question about your cost break down. Where is your monthly profit if all of your expenses after the mortgage payment is going towards what you have listed? 

Our profit will be ~$100/month. And then we should get our starting capital back out after the seasoning period on our loan is over and we can refinance (providing rates are at a number we like)

Quote from @Joe Villeneuve:

Ok.  So the real numbers are as follow:

PP = $95k
DP = 25% = $28k
repair cost = $15k
Total Cash OP = $43k (not 15k)

Rent = 1300/m
Mo Exp = $960/m
NCF = $340/m;  $4100/yr

So, with $3k in cash in, and only $4.1 NCF/yr, it will take you over 10 years to recover your cost...which is when you start to make a profit.  That's a long time.  Anything over 5 years can guarantee another large cash cost (driveway, furnace, plumbing issue, etc...), which will extend that number from over 10 year to most likely over 12.

 Thank you for the feedback Joe. The added perspective is always nice!

While it may not be an amazing deal, we're excited just to get started.

Quote from @Robin Simon:

Quote from @Joe Villeneuve:

OK.  I'm trying to understand the math here...which is very confusing.  I'm making a few assumptions here based on the limited info given above.  Here goes:

1 - The PP = $95k
2 - You didn't put in a Down Payment, because that would involve cash and the ...
3 - Cash invested = $15k, which would barely cover the cost of the "new floors, soft floor fix, fixing a wiring issue, and moving the lndry room.
4 - Not sure where the "new roof" cost falls here.  When you say "negotiated in" I'm assuming the roof was replaced by the seller without increasing the PP beyond $95k.

Is that all correct?

Also, if this is a hold, what are the projected monthly expenses (taxes, ins), mortgage payment and rent?...which will generate your monthly Cash Flow?

The statement that has me both stumped and concerned is under the "Lessons Learned" question, when you answer it with the statement, "Always have backup plans in place for financing".  What does that mean, and how does that apply here?

 Agree - what is the story behind "backup plans in place for financing" - curious to see what happened here / specific lessons learned

The first mistake was on us, we thought we had all our ducks in a row for using a HELOC, but we didn't. Then we tried to do a hard money loan for purchase and renovation and they kept adding addition funds that we needed to bring to the table until at the end of it we were priced out. We ended up doing a conventional loan and cash out of pocket for the renovation.

Quote from @V.G Jason:

Where is this? Are you slumlording?

 Mishawaka Indiana 

Quote from @Joe Villeneuve:

OK.  I'm trying to understand the math here...which is very confusing.  I'm making a few assumptions here based on the limited info given above.  Here goes:

1 - The PP = $95k
2 - You didn't put in a Down Payment, because that would involve cash and the ...
3 - Cash invested = $15k, which would barely cover the cost of the "new floors, soft floor fix, fixing a wiring issue, and moving the lndry room.
4 - Not sure where the "new roof" cost falls here.  When you say "negotiated in" I'm assuming the roof was replaced by the seller without increasing the PP beyond $95k.

Is that all correct?

Also, if this is a hold, what are the projected monthly expenses (taxes, ins), mortgage payment and rent?...which will generate your monthly Cash Flow?

The statement that has me both stumped and concerned is under the "Lessons Learned" question, when you answer it with the statement, "Always have backup plans in place for financing".  What does that mean, and how does that apply here?

 Sorry left out the details in all the excitement!

list price: 110,000

PP: 95,000 

25% down. 7.625% rate

Negotiated the roof as seller pays after the home inspection so no out of pocket cost to us.

we estimate $15,000 in renovation costs for an ARV of ~$130,000

Mortgage payment of $508

Insurance and taxes $300/month

$160/month property management 

$250/Month for the repair fund

estimated rent of $1300/month

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $95,000
Cash invested: $15,000

After hitting many bumps along the road, we landed our first investment property, out of state!

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

We found the house on Zillow. Our Agent Steve helped us negotiate the house down from the $110,000 it was listed at to $95,000.

How did you add value to the deal?

Interior remodel including new floors, fixing a soft floor, Fixing a wiring issue, and moving the laundry room. We had a new roof negotiated in after inspection as well..

Lessons learned? Challenges?

Always have backup plans in place for financing.

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

Yes, Stephen DiJulius was amazing throughout the whole process! Being local to the area and an investor himself made it so he had many recommendations for us as we progressed through the purchase and rehab process.