All Forum Posts by: Kristi Chin

Nathan, my original thought was to pay cash and refinance after about 6-12 months to pull the equity out. All of the other properties in the neighborhood are listed between $150-$200k, with about 200 sq ft difference. (One property sold for 168k right before the flood, and one is pending at 150k). Since last year's flood, the owner has renovated the property and is pretty much rent ready (tile floors, granite in the kitchen and bath, etc, so not much else for me to do), but missing some kitchen appliances. (It's a small townhome, less than 1k sq ft). Value add – yes balcony, and the neighborhood has 2 swimming pools). Talking with the seller's agent, it seems the owner is in her 70s, living in a different city, and after the 3rd flood, just wants to offload the property. I tried to make a lower offer, but it seems the agent/friend is driving the deal, so can't really speak to the seller directly. When we went to view the property, there were 4 other homes still undergoing renovations after the flood, so that may be why retail buyers aren’t looking to buy (yet) and numbers don't work for investors. 

It seems I've left off a few items. I'm still learning to analyze deals and hopefully will get better at it soon. Perhaps I got excited about the possibility of purchasing property in a highly desirable area for less than 100k, I was trying to see if I can make it work somehow, but looks like my best option is to let this one go and move along. Thank you very much for the input. 

Thank you Andrew. I found it on the MLS, and its still active as of today. My humble opinion is that the retail buyers are afraid of the next flood and the investor isn't able to make the numbers work.

Hi BP Community, I found what I thought was a great deal because it seems to be a "1.5%" deal in the Houston Heights area (highly desirable), but after further calculations it's not making much sense. I believe I'm running my numbers correctly, but would love some input.

Purchase price: $99,000.00

ARV: $150,000.00

Improvements: $2,000.00 (home is rent ready, but needs fridge, dishwasher, and a cleaning)

Closing cost: $5,000.00

Mortgage: $531.00

Property tax: $320

Insurance: $85

Vacancy: 5%

Maintenance & repairs: 5%

Cap ex: 5% (I'd generally do 10%, but this is a townhome)

PM: 0%

HOA: $300

Potential rent: $1500-$1600

Potential monthly cash flow: $40

Cash-on-cash return: 9.5%

Total Equity: $50,000.00

Here's the deal. I'm expecting high equity on this property, so did something I generally don't do - I factored in 0% PM, which probably isn't a good idea, but I plan on managing myself for the first year or two, and depending on the market, will either increase rent or sell. The equity looks great, which is why I'm still hoping the numbers will work and maybe I missed something. My first time analyzing a condo/townhome, and it seems the HOA eats up all the cash flow, so now sure if I'm just not finding the right property for it to work or if I'm missing something.

*note – this property is in Houston Heights, which is highly desirable, BUT it has also flooded during the previous 3 "500-year floods" that Houston has endured.

Bite the bullet regarding the first 2 years of cash flow, (with anticipated high equity) or move along? Thanks in advance for any input!

Has anyone here taken the Real Estate Express course?  I'm debating between that and Kaplan - REE because of the price, but seems to have mixed review. It seems Kaplan is preferred?

@Account Closed - I can totally relate. Personally, I'd prefer not to have people in my home unless necessary.

@Colleen F. - thank you very much for the input. 

@Ben S. - I'm hoping we can build that type of relationship with the tenant *fingers crossed*

@Mindy Jensen - I'm planning on going over the lease with the tenant within the next week or two, to go over the renewal as well.

We're getting conflicting information from the tenant now. He indicated he told PM about the pet back in September (and PM requested photos), but was never required to pay the pet fee.  PM office was closed over the week-end, but we're trying to get in touch with them to see what the deal is - we never received any notification from PM about pets. Since we've terminated our Agreement with PM, not sure if there is anything we can do about it anymore.  I've asked tenant to pay the pet fee, which he requested to pay in installments, so I'll just break it down to 12 months in the renewal agreement. I've also called AT&T and asked about their packages, and it seems they offer wireless systems with 24 month terms, but tenant can take it with them when they move, so I guess we'll just accept the fact that Tenant installed the system, and may or may not have informed PM since we haven't heard back from PM. Currently, we've only heard 1 side of the story, but it seems the issue may be with PM and not tenant... 

@Mindy Jensen - yup.  I've talked to the tenant, and looked up as much details as I can, and I believe he got the AT&T Digital Life security package.   I did go in the property today, and nothing seems off (no growing or cooking anything). They did have a dog that he mentioned yesterday because the kids wanted a dog (violation of original contract, didn't pay pet fee).  He mentioned a house a few doors down got broken into, so that's why they installed the security system.  

This tenant baffles me.  They seem to take care of the property but also disregards the contract. Any other opinion or advise on whether or not it may or may not be a good idea to renew?

Pros: tenant cares for property; pays rent on time; good credit/job history

Cons: violates contracts (i.e. pets, security system w/o Landlord knowledge/approval). He seems to think it's his house.

I'm not sure about the wiring yet, but did arrange a meeting with the tenant tomorrow morning to ask questions to see how to word the renewal.

They changed the top lock to a biometric.  I do have the key to the bottom lock, so if we make prior arrangements, can enter the house - I hope...

I don't agree with tenant making the alterations, but I can't tell if I'm upset or flattered that the tenants seem to like the property too much?? They've inquired several occasions about purchasing the property, but we have no plans to sell for another few years.

We have a pretty good tenant who is interested in purchasing the property.  We had a PM for 1 year, and just terminated our agreement with PM last week - wanted to learn the business more on our own.  I went to check on the property today, and there are surveillance cameras at the front door, and the locks has been replaced. Obviously the PM didn't do much work at all, and weren't even aware of the changes. I called the tenant, and was informed he installed a security system about 5 months ago.  We are preparing our renewal contract with tenant, of course planning on including an addendum regarding the security system/access to the property.  Overall the tenant seems to take very good care of the property, but I definitely don't agree with the tenant making these changes without our knowledge, esp with the provisions in the original contract. Does anyone have additional insight or suggestions on how else we should handle?