All Forum Posts by: Kyle Bambu

I'm closing on a property in a couple weeks and don't even have a job yet. I'll be graduating and starting my job in June. Might be a slightly different story for me because I believe I have a ton of built in equity, and I'm confident I can pay the mortgage even if things get worse. This downturn is likely to get worse at this point. A couple weeks ago I was not too worried, but it's obvious containment has failed. Maybe it would be possible to negotiate the seller down more given the "current climate" so that way you have more equity if you did purchase it. 

Hey Ethan! Congrats on searching for a property at this stage. I am also a college student with a job lined up after graduation. I'll be moving to Phoenix, AZ at the end of May. I'm currently in the stages of closing on a property in AZ, and I won't even be out there for two more months. I had no issues getting a loan. Guidelines state that you can get a loan up to 3 months out of your job as long as you have an official offer letter. Obviously credit is going to still play an important role. If you have no credit history, I'd suspect that you'll run into issues. You also do not need an FHA loan. If you have the credit, a conventional 3% down loan will likely be the better option for you. If you'd like, I can discuss with you more since I'm currently going through the whole process.

@Gavin Henry

I just started getting into wholesaling a couple of months ago, so hopefully someone can verify what I am saying here. I had a similar deal on the table last month. Seller wanted 115, but it needed a lot of work and I learned he had a mortgage for 80k. I honestly wanted to get in around 70k but that would've meant going through a short sale. Basically the bank would have to agree to sell it for less than the mortgage which would entail ~6 months of BS where you don't really know if you'll get the property or not. So your most realistic options are coming in at his mortgage or offering credit at closing to pay off the rest of what he owes. In this situation that seems unrealistic because his mortgage value is way to close to the ARV. Unless the ARV is closer to 400k and doesn't require much work, then this doesn't really seem like a deal to me. It'd be a fantastic deal if he didn't owe the mortgage on it, but dealing with the bank will likely be a huge pain. Let's hear a second opinion though as maybe I'm incorrect since I haven't been in the game too long

I was going to pay the seller a payment of $100 to sign the option agreement. I guess if I had the contract written correctly I could get that back if I never exercised the option? Also, would I write a check that day when signing or would I need to have that money sent over another way?

 Thanks Corey! I'm actually in the Lehigh Valley in PA currently, but I'll be moving out to Phoenix in a couple of months. I just figured I'd try to get some deals under my belt before moving to that hot market. I'll be sure to check out that video and keep searching through more comps. Do you suggest using Zillow as the best way to determine what other properties have been selling for?

Merry Christmas everyone! I should probably be preparing for my family to show up for the Holidays, but instead here I am writing this forum post...

So I have been cold calling a lot lately and recently received two phone calls back from motivated sellers. I'll be visiting those houses on Saturday. I have no experience in determining rehab value or the ARV of a house. In fact, I've never really done any kind of construction work on houses at all. In addition to this, I am not even sure of the whole process. I'm seeing a lawyer tomorrow to try to iron out some contracts that I can use for this weekend. I'm sure that will be expensive, but I would rather cover myself than have some very expensive lesson later on.

My plan is to use 3 different contracts which I feel differs from most wholesalers. The first one is just an Option to Purchase contract because I want to make sure I don't sign any purchase agreement until I find a Buyer. Once I find a Buyer, I'll go back to the Seller and exercise my option so that we can then sign the Sales and Purchase Agreement. After that, I'll go to the Buyer and sign the Assignment Contract with them. Basically, I just want to cover myself with the Option to Purchase agreement so that I never have that risk of potentially owning the house. 

So assuming I get these contracts worked out, I'll be seeing these houses Saturday. Let's simplify a bit and assume that I can figure out the ARV on my own. How do I judge the rehab cost? One house is a 1000 sqft, two floor, 2 bed, 1 bath. The other house is 2,500 sqft 3 bed, 1 bath. Both owners said the houses are "gutted." Which I guess varies based on how that is defined. Both owners also said the siding and roofing was done recently. I looked up the houses from the Tax Assessor. The first house has a Grade of D+ "Below Average," and a CDU of FR- "Fair." The second house has a Grade of C "Average," and a CDU of UN - "Unsound." Obviously, no one is going to be able to tell me how much it might cost to rehab because you haven't seen it. However, any tips or potential opinions on a range that I might expect?

Lastly, assuming I figure out the ARV and rehab costs, I'll have my assignment fee to figure into the equation. Is this usually just 10% of the ARV. I was hoping to have a fee of $10k for each even though one has an ARV of about 70k and the other over 100k. I'm open to any tips or suggestions on any of this as these two deals are my first potential deals. Thank you!

Let's assume you are paying 1k a month to rent an apartment. You then rent out that apartment and make 1.5k a month in revenue. Assume you have no other expenses. Now, let's also say you have other rental properties and somehow you are able to deduct all but $500 in profits from your taxes. Since the 1k a month rent is a "reasonable and necessary" business expense isn't that fully tax deductible? So essentially, you are able to deduct your last 1k in profits (500 from the STR profit and 500 from your other rentals) and thus pay 0 taxes? Am I understanding this correctly or could you essentially use rental arbitrage to gain a pretty significant tax advantage?

@Brett Tvenge glad to meet you! How was your experience buying a condo near campus? Did you rent out to friends to help pay for the mortgage? The Tempe area seems like a great area to house hack if I could find some students that are looking for housing. It would almost be like I never left college then haha!

@Pamela Sandberg nice to meet you! I've been checking daily listings and trying to get a feel for the prices in the area. It seems that the multifamily market is very competitive because I haven't seen many reasonably priced duplexes or triplexes that I could cash flow with. 

Hi everyone! My name is Kyle Bambu. I will be graduating from Penn State University in a couple of months with a degree in Aerospace Engineering. After graduation, I'll be moving to Phoenix, AZ and working for Honeywell. I've been fortunate enough to not take on any student loan debt, and my many summers as a caddie at a prestigious golf club has allowed me save a little over 40k that I currently have in stocks. 

I have always been fascinated with starting some sort of business and have several failures already under my belt. I hadn't really considered real estate investing until recently because I always figured the best way to accumulate wealth would be through starting my own business-- now I realize that RE is probably the better route. 

My current plan is to hopefully start house hacking immediately once I move to Phoenix. I plan to fly down at least once or twice before graduating to check out houses, talk with agents, and pull probate/divorce records to look for off market deals. My parents and everyone else around me keeps telling me I "need to just rent and figure things out for the first few years." Am I wrong to want to start investing immediately? I am mostly interested in some kind of house hack or BRRRR strategy. Best case scenario, I hope to find an off market deal that needs some work with an ADU or casita. Live in it for a couple months while I fix it up, and then start renting it out on AirBNB or another STR site. Then, I'll refinance to pull out my equity and repeat. Thoughts on my plan? Any advice in general is greatly appreciated. Looking forward to talking to everyone!