All Forum Posts by: Kerry Smith

Happy Birthday BP!! The site is nothing short of phenomenal. I mentioned this to Brandon about two weeks ago; BP has literally changed not just my life, but more importantly the lives if my wife and children. You are helping my family become wealthy, and for that I cannot thank you enough...

@Heather LeCedre great question!

We are in a similar situation, getting to the point that it makes sense for us to start using some type of PM software. Welcome to the site by the way!

@Sung-Yong Kim Yeah man, Robert's book changed my life. I did not grow up in a wealthy family, and I really had no concept of building wealth. I am glad it has had the same effect on you!

@Sung-Yong Kim welcome to BP! I am also an Army officer and real estate investor. @Brandon Turner posted two of the best links you will ever find on this site. Read the Ultimate Beginnner's Guide and listen to ALL of the podcasts. Having been to AFG a few times myself, I know you have a lot of down time in the evenings. After work, the gym, and chow - head back to your CHU and listen to them. They are super informative and relaxing to listen to.

Have fun, stay safe, and good luck brother!

@Account Closed thanks for the feedback!!

I misspoke when I said it would CF $300, it will CF $150+ a month with the 50% rule applied (management, expenses etc). In regard to the rents, I am leaning on the conservative side of the numbers. I currently have a 3/2 that rents for $1100 in the same zip code, but this house is in a rural setting. I believe it would rent for $900-$1000 as a 3/2. I agree with you that a city offers a more diverse employment base, but I would argue that does not necessarily mean it is better for buy & hold properties. When people rent houses around here, they rent them for the long haul. One thing to also consider with rural properties is that they are not effected by housing bubbles as much as the big city markets. Plus this is our hometown :)

I forgot to mention this is in Sanford, NC. Thanks guys!

Hello everyone! After a couple of months searching for properties in our area, we found one that we are considering purchasing as our first buy & hold. We would like you guys to take a look at it, and give us your feedback. Thanks in advance!

Background: It is a small 900sq ft, 2/1 in a rural setting with county taxes. It is a REO that has been vacant for 1 year. The basement is a walk-out and currently unfinished. We are considering adding another bedroom/bath in the basement, making it a 3/2, and roughly 1400sq ft total. It has a nice lake at the back of the property. On the day we looked at it, the neighbors (To the SW) mentioned sub-dividing the lot to add on to their backyard. There might be another $5k-$10k there if we can sell off a chunk of the land to them. Zillow has the house at $40k currently. The house to the SW at $160,000 and the to the NE at $139,000. The two houses behind the property are at $175,000 and $185,000 respectively. Across the street is a large church complex.

ARV: 2/1: $84,000 3/2: $110,000

Asking price: $28,000

Rehab Costs: $30,000 (I think I may be a little paranoid here, but better to be conservative.)

Total: $58,000

* I have a portfolio lender that will let us roll the cost of the rehab in to the mortgage.

Down Payment: $11,600 (20%)

Total Financed: $46,400

Estimated Closing Costs: $2000

Insurance: $720/year

Taxes: $600/year

Total Cash Outlay: $11,600 + $2000 = $13,600

30 year mortgage at 5%

Total Monthly Payment: $387 (including taxes & insurance)

Expected Rents: As a 2/1 = $700, As a 3/2 = $900

County GIS Details:

Assessed Value: $81,700

Assessed Building: $67,100

Assessed Land: $14,600

Our Thoughts:

The rents are average for the area. We are figuring $300.00+ a month Cash Flow at $700/mo rent, and a Income to Expense Ratio of 1.17%. 2% would be tough to get in our area, because the rents are low across the board. We could save some rehab costs by leaving it as a 2/1, but it would rent for $150-$200 more per month as a 3/2. We do have a tenant who has already stated they would rent it for $700 once it is completed. The property does meet the 70% rule as a 2/1, but even more so as a 3/2. I am confident we could recoup our money if we absolutely had to sell it.

What do you guys think?!

@Margaret McCoon welcome to BP! I am in the Sanford area Maggie. Funny you mentioned a CPA, I am also looking for a new one in the Raleigh area. Have a great day!

Matt Horton awesome work Matt! It looks great man! How did you find the deal? MLS? Letters?

Bryan Hancock welcome to the site! I am also in NC myself. I am very interested in how the CF works. Guess I need to start reading up on it more. Thanks for the list of reputable ones!