All Forum Posts by: Justin Howe

@Daniel Morgan 

I haven't done a campaign yet but from what I've read, people have seen a big difference in using hand written letters rather than printed letters. It makes it look more personal in the seller's eyes.

@Carlos Powell I'd recommend buying a SFR or small multifamily and house hack. Rent out rooms that you aren't using to build reserves and then use that cash to start a direct mail marketing campaign.

@Lukasz Maj Once you have negotiated a price with the seller, you want to put the property under contract. I use my state's purchase contract. Do a quick google search and I'm sure you can find one for your state as well. Be sure to write in the buyer section your name and "and or assigns". This will allow you to assign the contract to an end buyer (investor). Once the contract is signed, you can start marketing the property. Use Craigslist, email blasts to your cash buyers, ect. Then once you find a buyer, you will use an assignment contract and sign that with your buyer. Then take all the documents to your title company and close the deal. Good luck!

@Lukasz Maj 

What questions do you have about wholesaling? The process, marketing, ect? Please be more specific so we can help you out.

Hello,

I found a 4 bed 2.5 bath property in a great neighborhood. The sellers are selling the property for their deceased father. How can I buy the property from them since it's in probate and in their father's name?

Also there is a huge crack in the garage floor. The sellers said the concrete needs to be dug up and re-poured with new concrete. Is this something to be seriously concerned about?

Purchase price: $180,000

Estimated rehab expense: $25,000 (just a guess, haven't received an estimate from contractor yet) Mostly needs cosmetic updating. New flooring on the first floor, paint,

ARV: $270,000

Thank you for the help!

Here are the numbers for the property. Built in 1979, 3 bed/2bath, 1200 sq foot, located near good schools. ARV is $140,000 - $145,000.

Purchase Price: $117,000

Down Payment (20%): $23,400

Amount Financed: $93,600 (4.25% rate)

Repairs: $10,000

Monthly Mortgage Payment: $460.46

PM Expense: $100

Vacancy (8%): $80

Maintenance: $85

Property Taxes: $70

Insurance: $50

Rental Income: $1000

Total Expenses: $846

Net Cash Flow: $154

Yes we will be spliting the $150 so $75 each. I can purchase the property by myself but I like the idea of spliting the risk/work as well.

What do you guys think of purchasing a property built in 1979 to hold as a long term rental?

@Ryan Dossey 

I understand $150 positive cash flow doesn't seem like a lot, especially when it's split in half. In reality we will be making $250 because we've included $100 per month for management expenses but we will be self managing the property at first.

Hello BP,

I have identified a property close to home that cash flows $150~ monthly after all expenses. My question is, is it a good idea to purchase a rental property with a friend? We've been great friends for 4 years, have similar goals/views in life, and are in similar financial situations. We agreed before we purchase a property together that we will outline on paper what we expect from each other as partners, who will be responsible for what, management, ect.

We plan on holding properties long term. This specific property was built in 1979 so would it be more beneficial in the long run to buy newer properties?

Thank you in advance.

@Joseph Jackson Thanks for sharing your experience as a landlord. I will use 18% to calculate PM expenses from here on. Do you have any companies that you recommend using?

@John Casmon I'm not sure how the seller is justifying the increase but I know Phoenix has seen a great turn around in appreciation since 2011.You're right about FHA but I'd have to live in the property for a year, which I don't plan on doing so if I do purchase the property, I will use a conventional loan with 20% down.

@Sean Peters You're absolutely right. For simplicity sake, I included mortgage expense in the totals but I do understand not to include it when comparing other properties.

@John Strishak The property is located in what I'd consider a C class neighborhood. It's a few miles away from my personal residence so at first, I plan on managing the property myself. If I find that it's too difficult to manage myself, I've budgeted 10% for a PM.

@Kyle Denmark I think my internet browser at work is outdated so it doesn't allow me to use the @ correctly. It shows "Error on page."

Thank you for all the responses so far. I will call the seller later today to gather more information about the condition of the property, tenants, ect.

Is there anything specific that I should ask the seller over the phone?