All Forum Posts by: Kevin O'Brien

I would recommend something much smaller. You will need 20% down for a standard conventional loan. So maybe look at stuff around 250K? That sounds like a doable scenario. A couple issues with your idea:

• 1. You seem to undervalue the cost of turning over 8 units in an apartment building. $10,000 won't get you through more that two units if they need a kitchen, bathroom, electrical or really any other major issue. 
  

• 2. Why would you change out the window units for HVAC? Seems like over improving. I am assuming the tenants are already paying their electric bill which includes running window AC units. Secondly, installing HVAC with AC into each unit will cost you at the absolute minimum $8,000. This is $56,000. Which is $56,000 you don't have budgeted for. It's also $56,000 that won't increase your bottom line.
  

• 3. Why is the seller going to take $150,000 less than list price? The property that you described sounds like a great property. How long has it been on the market? Has the price been reduced? What is the current mortgage balance? These are all questions you would need to know. 

• 4. Last point is 10% for a property manager is very expensive. For $1,200 a month why not take that responsibility yourself? It would double your COC net return.

I am looking to purchase a three or four unit building in the next month or two which should make me around $1,000 a month. I make around $3,000 a month but as a contractor 1099 not a W2, I have no debts or monthly financial obligations. Assuming I own the first property would I be able to qualify for a commercial mortgage for a 6 flat for around $350K that nets cash $3,000 a month? If I had the 20% downpayment would it be as simple as looking at the cashflow and having the downpayment or are other factors also considered? thanks.

Took a month and a half. It would have been nice if it only took a month but next time.

As the title says this is my first flip which I purchased at the age of 18. I purchased this property with savings from a prior business that I ran in highschool. This property was purchased for $72,500. The property was a previous rental and needed new flooring, paint, fixtures, kitchen, appliances, bathroom and paint. At the start of the process I planned to keep this property as a rental but quickly realized that it had a fair amount of equity in it that would be helpful in purchasing a larger property in cash next time. The mechanicals were in good condition to begin with all being less than 10 years old. I spent just under $20,000 on the entire renovation by doing a lot of the work myself. For a total cost of $92,500 plus closing costs. I plan to be somewhere under $100,000 including closing costs. My list price is $130,000 which will allow me to walk away with roughly $30,000. I plan to use this profit plus my original investment from this deal to BRRRR some Chicago 3 flats next that way I can move out finally. Overall I learned a lot and enjoyed the process thus far. The one snag in the entire job happened at the end with the tree guy taking 6 days to cut a tree down. Yea 6 days you heard that right. Kevin said you're fired for the first time. Overall just get out there and make it happen. This property would for reference would rent for $1300 a month.

Of course it’s not too early. I purchased my first flip last Friday at 18yo. Go for it.

Thanks, this was the general consensus I was getting. I wish the gov didn't have to regulate everything. If only I was around from 2003 to 2007. 

I have never thought of doing a deal this way but it makes sense. Similar to a buyer requesting credits for items found on a home inspection I would guess but on a much larger scale. Thanks.  

Hello, 

I was wondering what would be the best option for getting my money out of a cash purchase. The property in mind is $65,000 and needs $15,000 in work. Once rehabbed the property would appraise for $125,000 and rent for $1300 a month ($600 profit per month after all costs with a mortgage of 70% of $125,000)  If I paid for this property in cash what would be my best option for turning the property into a 30-year loan? I want to be able to get at minimum my $80,000 that has been invested out and would like to do so immediately after work is completed. Thanks. 

Well, the first mistake was quitting without a plan.

The second mistake was quitting without monthly cashflow. 

The third mistake is thinking you can live off your savings and somehow purchase a property. 

If you can I would try to get your job back until you have a plan and a deal on a property in place. That way you can use your W2 to get approval on a property to rent, rehab and or flip. You are going to have an incredibly difficult time qualifying without a job unless your disability is substantial. Thank you for your service.  

Buy the shingles yourself and get a quote for installation. Shouldn't be more than a few thousand for installation per house. Heck, I'd think you'd be able to save some of that insurance money for yourself. Singles are $1 per sqft. Labor should be around $3 per sqft. $4000-$5000 on a regular house.