All Forum Posts by: Jay Sausmer

 Welcome, Justyn. Several good ideas here. Another is to work with an investor as a private money lender; you supply some of the $, they get the work done and however you structure that, perhaps either make interest on the investment or a % of the profit. This would give you an opportunity to see how things are getting done while relying on someone who can share the experience. Good luck!

Hello, Elias. I know an investor who I had connected with via social media who has properties in Cincinnati. I found an agent online (after working through a couple that didn't work out) who understood what I was looking for, and the investor connected me with a property manager. That PM's company also does renovations up to a point and will find people beyond that. I think the best detail is to be as specific as possible; the agent knows what I'm looking for and we don't waste each other's time with other properties; the PM has had to learn what I want in renovating the properties and is now better prepared for my next one. Good luck!

Are you seeking opinions? I stick to the 70%-repairs=MAO formula, as my hard money lenders require it. Is the 70k cash for renovations?

$625,000*70%=$437,500-$70,000=$367,500. 

I am sure people will come up with multiple strategies, one would be taking it over 'subject to' the existing mortgage until you're able to buy it from them. Give them a down payment, pay their mortgage, charge market rent, etc. 

From a renovation angle, the standard math would look like this: ARV: $265,000, so 70% of that is $185,500, minus the $80,000 rehab, giving you a max purchase offer of $105,500 to the seller, AND you need to consider what you want your wholesale fee to be. Remember you have to explain the effort and expense you have to go through to to get that property up to 2023 standards. I use hard money lenders, and they all have had a 70% max loan of the ARV.

From the renting angle, some people want to stick to a 1%-ish rule - can the rent be 1% of the total price? Here, your 2-unit exceeds that. Don't forget though to account for vacancies, capital expenditures, maintenance, whether you pay any utilities, etc. That $500/month can shrink pretty quickly. 

@Shri Kanase Real estate requires networking, look at how many people above referred to making contact with people. I would consider following where your network takes you as well. For example, I'm in Atlanta where a place cash flows but still has good potential for appreciation (people moving here, large companies moving here, huge investments in the film industry), but I want cash flow, so I have a duplex in Cincinnati, too. I could introduce you to a couple good agents there, including @Sam McCormack who commented above. I have a good property manager whose company does most of the work as well.

There are other angles for you, too. With that money, you could become a private money lender while you explore what avenue you want to pursue. I have used them in my bigger picture as well. My PMLs have earned 8-10% on their money in 7-12 months until I refinanced or sold the property. They either received monthly payments if it was a BRRRR or all of it at once at the end if I sold it. That's one of the cool things, there are so many ways to figure ideas out.

I spent a couple years reading, studying, following online.. but nothing taught me as much as DOING it. Remember - you know where you are, but imagine where you could be. That's what motivates me. @Account Closed, that car reference is great!

Happy to talk more if you like. 

Welcome! I'm in Atlanta with a rental and a flip, and added a Cincinnati duplex last year. The final thought I had to bust out of the analysis paralysis was "I know where I am, but think of where I could be.." 

Best wishes!

Jay

There's also two types of headaches - the others addressed tenants as headaches above. But part of the renovation process is eliminating those headaches from the house itself now, so they don't cause problems later. I have houses from 1908 and 1935 that will not cause any headaches for a long time.   

@Nicole Harrington

Great idea. I don't have have anything there but I'm actively looking in the area for one.

@Harsh R. Obviously a few of us like that Cobb County area. I bought a townhome in Marietta last summer and after renovating it had the same success the others are referring to. In fact, I'm now looking for the next one. A couple of the other areas that have done well are Decatur and Duluth. Decatur is generally East Atlanta, ITP, and friends are crushing it there, too. Good luck!