All Forum Posts by: KC Pake

HEY BP Community, newbie here looking to begin mailers and was wondering if any experts or people who have bought via owner financing could give me some pointers on things I may be leaving out or things to omit. Also, perhaps a mailer service you like. Thanks!

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Dear [Owner's Name],

I hope this letter finds you in good spirits. My name is [First Name], and I've recently discovered your lovely property at [Property Address]. It's apparent that your home holds a special charm, and I'm writing to express my sincere interest in it.

So you're probably wondering how I got your information... While researching properties in the area, upon further investigation, I learned that the property is currently owned by an absentee owner. This information was obtained through public records and speaks to the diligence and transparency with which we are approaching our first home purchase.

[Insert bit of personalization about who I am, my family, and build trust, essentially humanizing the note].

I understand that selling a property can be a significant decision, and may not be one you are considering, but if you are, I want to assure you that I approach this with respect and am eager to explore the possibility of finding something agreeable for the both of us.

Here are a few reasons why seller financing (you not the bank) could be beneficial for you:

- Steady Income: Seller financing offers you a reliable source of income, providing monthly payments without the hassle of managing the property directly.
- Flexible Terms: We can discuss flexible payments that suit your needs, allowing you to customize the agreement according to your preferences.
- Avoiding Hefty Tax Burdens: By spreading out the sale over time, you may mitigate the impact of capital gains taxes, making seller financing a tax-efficient option.
- Legacy Planning: If you're concerned about leaving a lump sum to your heirs, seller financing allows you to pass on your wealth gradually, ensuring financial stability for your loved ones.
- Minimal Hassle: Seller financing eliminates the need for bank involvement, reducing paperwork and streamlining the sales process.
- Assured Sale: Choosing seller financing may attract a broader pool of potential buyers, beyond myself, increasing the likelihood of a successful sale.

I believe that by working together, we can find a solution that benefits both of us. I'm willing to accommodate your needs and preferences to make this process as smooth and mutually beneficial as possible.

If you're open to discussing this further, I would be delighted to meet with you at your convenience, perhaps for lunch someplace near that you like. Please feel free to reach out to me via email at [Your Email Address] or by phone at [Your Phone Number] if you're interested in learning more.

Thank you for considering my offer.

Warmest regards,

[Your Name]

P.S. Here's a photo of us to familiarize yourself with who you would be chatting with.

Zak,

Fantastic template! I don't think you need to change anything. That said, here is another version that you can edit/combine with your copy. Have fun with this project and the results will happen ;-)

Hi [Owner's Name]!

I trust this note lands in your world bringing a little spark of excitement. It’s [First Name] here, and I've stumbled upon your gem of a property at [Property Address]. Let me tell you, it practically radiated charm through the screen, and I just had to reach out to share my enthusiasm about it.

Now, you might be scratching your head, wondering, “How on earth did they find me?” Well, let me unravel the mystery! My quest for the perfect home led me to dive deep into the realm of public records, and voilà, your name shone brightly as the guardian of this enchanting abode. This detective work is just a glimpse into how dedicated and transparent we are in embarking on our home-buying adventure.

[Insert a delightful snippet about myself, the lively bunch I call family, and a sprinkle of warmth to make this message feel like a cozy chat over coffee].

I get it, deciding to sell your slice of heaven is no small feat, and it might not even be on your radar. But if the stars align and you're open to it, I'm here with open arms and a heart full of respect, ready to explore an exciting path that could be a win-win for both of us.

Why consider the road less traveled with seller financing, you ask? Buckle up, because here are some perks that might just tickle your fancy:

Steady Income Stream: Imagine a flow of payments landing in your lap each month, all without the nitty-gritty of property management. Sounds dreamy, right?
Customizable Adventures: We can tailor the payment plan to fit your lifestyle like a glove, offering flexibility that’s as refreshing as a summer breeze.
Tax-Savvy Moves: Spread out the sale and dance around those hefty capital gains taxes, keeping more money in your pocket.
A Legacy of Ease: Rather than a sudden windfall, seller financing allows you to sprinkle your wealth to your heirs, ensuring their financial serenity.
Smooth Sailing: Forget the banks and their mountains of paperwork; our path is paved with minimal hassle and maximum ease.
A Sure Thing: Opening the door to seller financing means more interested buyers might come knocking, boosting the chances of a sale that makes everyone happy.
Convinced? Intrigued? Either way, I'm all in to make this journey as seamless and joyful as possible for you.

If your curiosity is piqued, let's rendezvous for a chat, maybe over lunch at a spot you love. Drop me a line at [Your Email Address] or give me a buzz at [Your Phone Number], and let’s turn this potential into reality.

Thanks a million for entertaining my pitch.

Warmest vibes,

[Your Name]

P.S. Attached is a photo of us, so you can put faces to the names of your potential home’s new guardians!

Cheers,
KC

0 Votes

Quote from @Jeremy Jareckyj:

Hey everyone ! Would love to get your input on your favorite skiptracing software to be able to find owner contacts for distressed properties. Thanks so much!

Hi Jeremy,

Please review this thread for some details on Skiptracing Software.

All the best,
KC

1 Vote

Quote from @Jordan Budke:

I'm over here in San Diego County, CA. Real estate is crazy expensive, as I'm sure you all know. It forces us to look for more creative ways to get going. My wife and I are considering buying a plot of land and either building a custom build on it or putting a manufactured or modular home on it.

There are nuances to each plan, but I wanted to come to the experienced folks to ask what you would do. Manufactured and modular homes look to be more affordable. Are there better companies to buy these homes from? Which ones feel more like a home and not a mobile home? Do modulars have garages or is that more custom? I'm also curious how much it costs to prepare the land and install plumbing, electricity, and concrete (driveway, walkways, patios).

I'd love all the insights I can get from anyone that has experience doing this. Thanks!!

Hi Jordan,

Considering the purchase of a plot of land in San Diego County, CA, to place a manufactured or modular home, it's clear you're navigating a complicated and potentially rewarding path toward homeownership. Here are some insights to guide you through this journey:

Manufactured vs. Modular Homes

Manufactured homes are often more affordable than modular homes because they are built in a factory and transported to your land. They can be less permanent and are sometimes seen as less "home-like." However, advancements in manufactured home design have significantly improved their quality and aesthetic appeal.

Modular homes are constructed in sections at a factory and then assembled on-site. They are subject to the same local building codes as site-built homes, making them more similar in quality and feel to traditional homes. Modular homes can indeed come with garages, either pre-designed or as an add-on, depending on the company you choose and your specific design plan.

Companies and Quality

There are numerous reputable companies that produce modular and manufactured homes Examples, 1) Blu Homes, 2) Clever Homes, 3) US Modular Inc.. It's crucial to research and compare these companies based on their quality of construction, design options, and customer reviews. Look for companies that have a strong presence in California, as they will be more familiar with state regulations and requirements.

Land Preparation and Additional Costs

Preparing the land for a manufactured or modular home can vary significantly in cost, depending on the condition of the plot and the amount of work needed. Key considerations include:

Zoning and Permits: Check with local and county zoning offices to ensure that your lot allows for manufactured or modular homes. Regulations can vary widely, and obtaining the necessary permits can add to your timeline and budget.

Utilities and Infrastructure: The cost to install plumbing, electricity, and possibly gas, along with a septic system (if the municipal sewer isn’t available), can be substantial. Similarly, constructing a driveway, walkways, and patios will contribute to your overall expenses. It’s advisable to get quotes from local contractors to understand these costs better. I am not familiar with prices in the San Diego area, but you can use this website (https://homewyse.com/) to get all kinds of estimates for your area.

All the best,
KC

0 Votes

San Diego, California

Quote from @Sean Craigg:

Asking for some numbers analysis.

Landlord work is work and risk but I had experience. I'm hoping housing markets will pick up again in Austin/TX area.

1. SELL: ~720K (loss ~30K), 2.5% mortgage rate 27 yrs left. Total monthly house cost ~3500

2. RENTAL: ~3500/mo market rate. House in great shape

Cashflow may not be much but the LOW mortgage rate + deductions may help

How should I approach this calculation?

What other factors should I consider?

Hi Sean,

When deliberating whether to rent or sell your property in Austin, TX, this year, it's important to examine a blend of financial analyses and personal considerations. Financially, if you choose to sell, the property might go for approximately $720,000, marking a $30,000 loss. However, innovative strategies like seller financing or allowing a mortgage assumption could potentially offset this loss. Seller financing can attract buyers seeking flexible financing, possibly enabling a higher sale price and transforming the $30,000 loss into a profit. On the other hand, if your mortgage allows assumptions, this could be a significant selling point, especially if current market rates are higher, potentially increasing your pool of buyers and the property's sale price. Both options necessitate careful legal and financial planning due to their complexities.

Renting out the property at a market rate of about $3,500 per month offers a different set of financial benefits. This approach would not yield significant immediate cash flow but could lead to equity growth, tax deductions, and property appreciation over time. The low mortgage rate of 2.5% is a considerable advantage, reducing long-term financial obligations and potentially enhancing profitability through tax benefits and property value appreciation. Being a landlord involves responsibilities and risks, such as maintenance and tenant management, but these are counterbalanced by the potential for steady income and investment growth.

Other factors to consider include market conditions in Austin, which have seen substantial fluctuations, and how they might affect future property values. Your financial goals, liquidity needs, and personal circumstances will also play pivotal roles in this decision. Selling provides immediate liquidity, which could be necessary for other investments or financial needs. In contrast, renting could lead to greater long-term wealth accumulation but requires managing landlord responsibilities.

In conclusion, the choice between renting and selling in 2024 involves a comprehensive analysis of financial implications, market conditions, and personal goals. Strategies like seller financing or mortgage assumption introduce opportunities to enhance the property's value and appeal. Nonetheless, these options come with their risks and legal considerations. Consulting with financial and real estate professionals can provide personalized advice and help navigate the complexities of each option, ensuring that your decision aligns with your long-term financial strategy and goals.

Good luck with whatever you decide to do going forward,
KC

1 Vote

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0 Votes

Real Estate Deal Analysis & Advice

Post: Need an advice on my inspection report!!Sorry Im panicking but this is my rental purc

KC Pake

Lender

Pro Member

Posted February 09, 2024 08:23

Investor
Orange Park, FL
Posts 169
Votes 106

Quote from @Amer Swid:

Hello,

So the inspection report came back with these red flags, the offer for the house was 300k, then i asked for 25k reduction and they take care of all the hazardous stuff but they said ok for 25k but you take care of everything.

Anyone know how would approximate be to:

1) put chimney flue

2)do knob and tube rewireing (i heard it will be costly around 30k)

3) change furnace

4)pluming and asbestos (not sure if I should do anything for the asbestor)

any help will be much

Hi Amer,

Dealing with an inspection report's findings can indeed be daunting, but let's address your concerns with a bit more specificity, considering the details you've provided. Costs can vary significantly based on your location, the specific conditions of your home, and the contractor rates. Here's an updated guide for the items you've listed:

Installing a Chimney Flue: The cost for this can vary depending on the type of flue (e.g., stainless steel, clay), the height of the chimney, and whether it's a new installation or a replacement. You might expect to spend between $2,500 and $7,000 on average. Structural (brick) changes/repairs could increase these costs.

Knob and Tube Rewiring: Rewiring a house to replace knob and tube wiring is indeed costly, particularly for a complete job. For a medium-sized house, the cost can range from $15,000 to $25,000. This extensive work not only is labor-intensive but also involves subsequent wall repairs and repainting. It's crucial for electrical safety and modern compliance.

Replacing a Gas Furnace: Since you're dealing with a gas furnace, the replacement cost will depend on the unit's efficiency and your home's size. For a mid-efficiency gas furnace, expect costs between $2,500 and $6,000, while high-efficiency models can range from $3,500 to $10,000.

Plumbing and Asbestos: Plumbing costs can vary widely, from minor repairs in the hundreds to extensive replacements running into thousands. Asbestos, given its health risks, requires professional assessment and potential removal or encapsulation, with costs ranging from $1,500 to over $30,000, based on the extent and abatement method. That is a large range but it all depends on the extent of asbestos and how much remediation is required.

Considering these estimates, the $25,000 deduction you've negotiated might not cover all necessary repairs, especially if extensive work is needed for rewiring and potential asbestos abatement. It's crucial to:

Obtain detailed quotes from licensed professionals for each task, offering a more accurate cost overview.
Address the importance of negotiating further with the seller if repair costs significantly exceed the agreed deduction, particularly for undisclosed issues.
Prioritize hazardous repairs, like electrical issues and asbestos, which may need to be resolved and reinspected before closing. This is not only for safety but also often a requirement in the buying process.
Addressing asbestos should be a top concern due to its severe health risks; always engage a certified abatement contractor for this.

Best of luck,
KC

1 Vote

Joseph,

Good questions. Below are some links to keep you going. You can also use the website search function at the top of each page.

BiggerPockets.com has thousands of posts and resources that will help answer all of your questions about getting started and guides to help you along.

BRRRR Checklist below:

https://bit.ly/3TCrcHJ

There are also countless resources in this repository:

https://www.biggerpockets.com/files/search?utf8=%E2%9C%93&am...

Best,
KC

0 Votes

Hartford, Connecticut

Quote from @Joseph Fenner:

Quote from @KC Pake:

Quote from @Joseph Fenner:

Title says it all. Since I am starting out, I am just curious about how much you guys spend on renovations or if there is a rule of thumb? I want to calculate it as a percentage of the purchase price that I can apply to different properties with different situations. This will help me so I don't spend too much on renovations.

Joseph,

Good question. I don't have a 100% bulletproof answer for you because these numbers are subjective and vary based on factors, like; Location, Market, Investment Strategy, etc... I can give you a general response with some starting points to consider.

These are some general guidelines and strategies you can consider to help make informed decisions:

Percentage of Purchase Price: A common rule of thumb is to limit your renovation budget to a certain percentage of the property's purchase price. While this percentage can vary, a common range is 20% to 30% for a flip and 10% to 15% for a rental property. However, this is very dependent on the specific circumstances of the property and the market.
After Repair Value (ARV): For flips, investors often use the ARV to guide their renovation budget. The formula is to buy a property so that the purchase price plus renovation costs do not exceed 70% of the ARV. This means if a home's ARV is $100,000, you would aim to keep your all-in costs (purchase plus renovation) under $70,000.
Fixed Budget Strategy: Some investors set a fixed budget based on the scope of work needed. This involves getting detailed estimates for all renovation work planned and adding a contingency budget (usually 10-20% extra) for unforeseen expenses.
The Minimalist Approach for Rentals: If your strategy involves renting out the property, focusing on essential repairs and cosmetic updates can maximize ROI. Prioritizing renovations that increase rental value or reduce long-term maintenance costs is key.
Market Research: Understanding your market is crucial. Spending too much on renovations in a neighborhood that doesn’t support the increased value can lead to losses. Research local market trends, understand what features are in demand, and tailor your renovations to meet those demands without overcapitalizing.

Best of luck with your investments!

KC

How do I accurately determine the ARV? Besides looking at home and rental prices and location what else could I factor in?

Joseph,

Below is a link to some free resources (calculators) from BiggerPockets. This should help you map things out, step-by-step.

https://www.biggerpockets.com/investment-calculators

R/
KC

0 Votes

Hartford, Connecticut

Quote from @Joseph Fenner:

Percentage of Purchase Price: A common rule of thumb is to limit your renovation budget to a certain percentage of the property's purchase price. While this percentage can vary, a common range is 20% to 30% for a flip and 10% to 15% for a rental property. However, this is very dependent on the specific circumstances of the property and the market.
After Repair Value (ARV): For flips, investors often use the ARV to guide their renovation budget. The formula is to buy a property so that the purchase price plus renovation costs do not exceed 70% of the ARV. This means if a home's ARV is $100,000, you would aim to keep your all-in costs (purchase plus renovation) under $70,000.
Fixed Budget Strategy: Some investors set a fixed budget based on the scope of work needed. This involves getting detailed estimates for all renovation work planned and adding a contingency budget (usually 10-20% extra) for unforeseen expenses.
The Minimalist Approach for Rentals: If your strategy involves renting out the property, focusing on essential repairs and cosmetic updates can maximize ROI. Prioritizing renovations that increase rental value or reduce long-term maintenance costs is key.
Market Research: Understanding your market is crucial. Spending too much on renovations in a neighborhood that doesn’t support the increased value can lead to losses. Research local market trends, understand what features are in demand, and tailor your renovations to meet those demands without overcapitalizing.

Best of luck with your investments!

KC

5 Votes

Hartford, Connecticut

Real Estate Technology

Post: ❓❓ The Future of Real Estate: Blockchain and Smart Contracts 📲

KC Pake

Lender

Pro Member

Posted February 07, 2024 09:48

Investor
Orange Park, FL
Posts 169
Votes 106

Hey BiggerPockets!

I've been mulling over something and wanted to get your take on it. So, there's all this buzz about blockchain and smart contracts shaking up the real estate world? I'm curious what you all think about this. Have any of you researched blockchain or smart contracts? I have several questions - imagine being able to split up property ownership into tiny pieces or having every transaction out there for everyone to see, all secure and tamper-proof. Sounds like a game-changer, or does it?

Then, I'm also wondering about the challenges. Sure, blockchain's secure, but it's not perfect, and navigating this whole new tech landscape seems like it could be a bit dicey, until proven. Plus, how are all these changes going to fit with the existing rules and regs? Seems like there is still a lot to figure out.

I'm just tossing this out there because I'd like to hear your thoughts. Do you see blockchain and smart contracts as the future of how we deal in real estate, or are there just too many hurdles to get over? It feels like we're on the brink of something big, and I can't help but wonder how it's all going to unfold.

Thanks in advance for your responses!

0 Votes

All Forum Posts by: KC Pake

KC Pake has started 17 posts and replied 166 times.

Post: Seller Financing Template - FEEDBACK Desired :)

Post: Favorite Skiptracing Softwares

Post: Custom build or Manufactured/Modular On Land?

Post: Rent out or Sell - 2024

Post: 🤔💵 Do You Know Your Funding Options 💭

Post: Need an advice on my inspection report!!Sorry Im panicking but this is my rental purc

Post: How much should I spend on renovations on average?

Post: How much should I spend on renovations on average?

Post: How much should I spend on renovations on average?

Post: ❓❓ The Future of Real Estate: Blockchain and Smart Contracts 📲

KC Pake has started 17 posts and replied 166 times.

Biggerpockets Logo Post: Seller Financing Template - FEEDBACK Desired :)

Biggerpockets Logo Post: Favorite Skiptracing Softwares

Biggerpockets Logo Post: Custom build or Manufactured/Modular On Land?

Biggerpockets Logo Post: Rent out or Sell - 2024

Biggerpockets Logo Post: 🤔💵 Do You Know Your Funding Options 💭

Biggerpockets Logo Post: Need an advice on my inspection report!!Sorry Im panicking but this is my rental purc

Biggerpockets Logo Post: How much should I spend on renovations on average?

Biggerpockets Logo Post: How much should I spend on renovations on average?

Biggerpockets Logo Post: How much should I spend on renovations on average?

Biggerpockets Logo Post: ❓❓ The Future of Real Estate: Blockchain and Smart Contracts 📲

Post: Seller Financing Template - FEEDBACK Desired :)

Post: Favorite Skiptracing Softwares

Post: Custom build or Manufactured/Modular On Land?

Post: Rent out or Sell - 2024

Post: 🤔💵 Do You Know Your Funding Options 💭

Post: Need an advice on my inspection report!!Sorry Im panicking but this is my rental purc

Post: How much should I spend on renovations on average?

Post: How much should I spend on renovations on average?

Post: How much should I spend on renovations on average?

Post: ❓❓ The Future of Real Estate: Blockchain and Smart Contracts 📲