All Forum Posts by: Kelsy Soderlund

Thanks everyone for all the advice!

@Gerald K. The hard money would be temporary financing to fill the time period until we can refinance conventionally. Considering the condition of the house among other things I don't expect that conventional financing would be an option right off the bat. If there's more cost effective options I'd love it if you could point me in the right direction.

Thanks for the tip @Zach Schwarzmiller !

Any idea whether a walk through video would be enough for a contractor to come up with a reasonably accurate bid?

And is there a better way to do comps in this situation?

We have a viewing scheduled for tomorrow. Do you know if taking a detailed walk through video would be sufficient for a contractor to do a rough estimate?

@Pam R. Very good question! I haven't thought about zoning. How would I be able to find out about that?

To calculate everything I used the BP buy and hold analysis. It's telling me that monthly P&I is $465.77 and the total monthly expenses are $632.44. I'm not sure where difference is coming from but I'm assuming insurance and taxes.

@Andy Collins Thanks for your response!

We are looking at other properties and will go wherever the numbers make sense. This property is the one that seems most promising at this point and we're trying not to get ahead of ourselves but it can be hard sometimes with all the excitement.

Regarding comps, the house is in a fairly rural area. When I refine my search to only include 3bd rental houses in that town there's only 3 postings listed on craigslist and they don't seem like very good comps.

1. $950 3bd 1.75ba 1,850 sq. ft. (Really, really ugly inside. Poorly maintained appearance.)
2. $850 3bd 1.75ba 118 sq. ft. (<--- Yes, that's what the ad says but I'm sure it's a typo. Maybe 1,180? Nice, clean appearance. Probably remodeled in the 90's.)
3. $1,099 3bd 2.5ba 1,420 sq. ft. (Nice and clean appearance probably built or remodeled in the 80's)

Zillow gives a rent zestimate of $830-$1,100 but I've heard those can be inaccurate and, like you said, it's a pretty wide range.

All of that is why we chose to do our math with the rent below any of those values. I figure if the math says it still cash flows at $750/mo without the mother in law it should be a good deal. Is this the right idea and/or one way we can go about it? Are there better resources for rental comps?

As far as the rehab goes, and considering the numbers we already have, what is the most we should be willing to put into the property for it to be a deal? Our plan is to do most of the rehab ourselves and with help from qualified friends which will help us cut some costs but exactly how much, we don't know yet.

Thanks again!

Ok. New solution.

Property

• 3 bed 1.5 bath
• 1,248 sq. ft. house on 6,577 sq. ft. lot
• 852 sq. ft. unfinished basement (can finish and convert into mother in law?)
• Built 1942
• ARV $100,000 +/-

Purchase Finances

• $55,900 asking price (will negotiate)
• $2,500 closing costs
• $25,000 repairs (new roof, some plumbing, some electrical and kitchen at least. House is an incomplete remodel and we won't know exactly what's inside until the viewing tomorrow.)

• <$750/month income (3 bed comps are $800-$1,100. With mother in law at $550-$650 could be <$1,300 total)
• $635/month expenses (Includes P&I and taxes)

How about this one?

http://www.biggerpockets.com/files/user/Kelsy/file/ellinor

Does that second link work?

http://www.biggerpockets.com/buy_and_hold_results/3584

Hello Bigger Pockets!

My partner and I are getting closer to closing our first buy and hold deal and are hoping we could get some more experienced eyes to help us analyze this.

http://www.biggerpockets.com/buy_and_hold_results/3584.pdf?c=1388869919

In using the analysis tool I tried to keep the numbers as conservative as possible. Of course, we would negotiate the purchase price to be lower than the asking price. The rental income for comps in that area are between 800 - 1200 per month so I figure if it still cash flows at 750 it's a property we should definitely be considering. Couldn't figure the cap rate on comps as they were all n/a.

Regarding financing, we're considering using hard money for 18 months and refinancing the property conventionally to pay off the hard money loan.

To make this less confusing we'll call the property we're analyzing 'property A' and my partners property 'property B'.

My partner has a free and clear income property he is willing to use for collateral. In the case that we can't refinance property A conventionally we would refinance or sell property B.

We could refinance property B to purchase property A but it's in the final year of a tax auction foreclosure redemption period so, unfortunately, that isn't an option right now.

So, does this seem like a deal to you more experienced investors? And how else can we finance this?

Thanks! We're looking forward to everyone's responses!

Thanks for the welcome and the tips guys!

@Mehran K. Thanks for the positive reinforcement! I love using the SMART method for goal setting. Seems to make even the biggest goals easy to accomplish.