All Forum Posts by: Kirk Rohani

@Wayne Brooks - Good point, I think you are correct. I will need to pay 3% to a buyer agent

@Todd Plambeck - House was built in 95 and the 35k is "cosmetic" (flooring, re-do kitchen, tile work, etc) No structural issues or electric or plumbing

@Jeremiah B - Good point, although I am not yet ready to take my ball and go play elsewhere yet. I want to try a few matches first because I accept any kind of defeat

@Shaun Reilly - Thanks Shaun, that was exactly what I was looking for. Your breakdown of the numbers and points on what I missed help shed a ton of light. Thank you sir!

Thanks to everyone for the great replies. I have learned a great deal from every one of you. In the end I think I am going to pass on this deal.

Bill - You are correct, I need to add a little bit of cushion in there for selling, marketing and possibly commission.

Jordan - Yeah, I guess I am not cutting out deals unless I can make at minimum of $40k+ and that's why I was considering this deal. It seems right now in Dallas there are so many investors buying up property on deals that are very skinny. For example, there was 1 investor who simply wanted to buy and hold and rent and he told me that he doesn't put anything into his sales commission and holding costs and only wants 5% equity when he buys. Tough to compete on homes against those numbers

Todd - Its in Lewisville and I am thinking of taking the full 45 days to close so that rehab doesn't start until January so that I can start marketing it in Feb when things pick up a little bit. I have some really good comps and the repair cost is an estimate from a contractor.

Perhaps I am just too new at this but the few weeks I have been searching for homes it seems like too many buys are scooping them up at higher prices and it doesn't make sense that they are getting the margins that everyone here says there should be on these deals.

Thank you all for your replies thus far, they have been extremely helpful!

Thanks Raymond! When I run the numbers using the 70% rule you are correct they don't work out however when I break down the actual numbers I have some still left over. What am I missing when I am doing my numbers?

$240k ARV

minus $35k Repairs

minus $0 Selling costs (Not using a realtor to sell)

minus $12k closing costs (If I decide to refi and pull my money back out)

minus $3k holding costs (no mortgage payment by ptaxes, elec etc about $1k/month)

minus $175 my cost

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$16k profit when I run numbers like this

However according to the 70% rule I would lose money on this deal. What am I missing?

Hi Adam,

Thanks for the feedback. Yeah those thoughts crossed my mind as well.

I was planning on paying all cash for now. My holding costs would be about $1k/month. I was going to try and FSBO so that I would not have to pay any commission.

Not sure if all what I am thinking is a good idea/possible?

I'm a new investor just starting out (no deals yet) and just won a HUD bid with the following numbers. Since this is my first possible deal, I wanted to get some advice/feedback/opinions please..

ARV = 240k

My cost = 175k

Repairs = 30k - 35k

Rental comps = $1500

Is this a deal that I should do? If I need to post more info please let me know. Any feedback is welcome!

Kirk