All Forum Posts by: Kyle Vogeler

I generally lean towards the opinion that any foundational issue is too much of a foundational issue - especially if you are new to real estate and don't have deep cash reserves.

The bill for foundational repair is always expensive and overages on estimates are not uncommon and are never cheap, and this is not an area where you want to cut corners.

That being said, there are scenarios when it makes sense to purchase a property with a foundational issue, but that usually involves getting the property at a steep discount. If you are paying full market value for this property, I would proceed with caution. 

Great post - I utilize much of the same strategies. 

I have recently begun to focus on building my network and it has paid off significantly. 

Once you realize that you don't have to do everything alone, a path to 10X your progress starts to appear. There are a plethora of individuals who want to work with you to achieve both their & your success.

Thanks for the response. Based on what you said, I think it would be best to have the property vacant before selling. The rent is slightly below market rent so investors would likely want to raise rents/find a new tenant.

I currently have a townhome that has a tenant living in it that I am considering selling. My question to you all is: Is it wise to list the property with a tenant living in it? Or will that affect the sale price?

This tenant pays their rent on time and isn't ever an issue, but it is time I utilize the equity I have built over the years. 

Thank you all in advanced for your responses. 

It doesn't necessarily correlate to a $300K deduction in price. The needed cap ex would directly impact Cap Rate and NOI, and those numbers would determine the price you pay.

If there is a ton of deferred maintenance, then you can and should get the property at a higher cap rate. You can then do a market analysis to see what cap rate repaired properties are selling at and determine the value you've added (all else being constant).

I'm assuming with $300K of work that rents are also lower now than they will be upon completion, so that change in NOI should be reflected between purchase and sale as well. Just make sure you don't purchase at the Pro-Forma rates.... if you are doing all the repair work and filling all the units, the seller shouldn't get the benefit of selling at a pro forma price.

Hey Nicholas! Love the plan to slowly grow your portfolio. I am a PA based realtor myself - lets connect and discuss strategies at some point. 

Although it is possible to start out at such scale, you have to remember that you are going to make beginner mistakes and may want to consider a partner for your first deal. Not only will it help from an experience point of view, but the banks will prefer it and may not lend to you unless you have a partner. 

That being said, I purchased a 6-unit and then a 26-unit only 6-months later. It definitely wasn't impossible, I did research like crazy and I made sure to have adequate cash reserves for any issues that may arise.

Would love to talk about this more and tell you about some of the things I learned so you don't make the same mistakes!

Welcome, Josh! Do you know what area of real estate you want to get into?

This is a good question and the answer really lies with the investor.

I have a decently wide search radius when I look for properties because I don't necessarily care about proximity to me, I care more about the individual deal. 

Each option you choose comes with its own challenges. 

If you choose to invest in only one area, then your growth may be slowed as you don't have as many deals to choose from. You're also more prone to portfolio fluctuations if that area is hit with economic hard times. 

If you invest in many areas, then you have to do extra work with each deal. You have to learn the desirable and undesirable parts of the city you're looking at, you have to create a whole new list of contacts for maintenance and management in that area, and much more.

So, as I said in the beginning, it really comes down to your personal goals and preferences. 

From my experience, it is very hard to get a 100% financed deal. Most lenders just won't accept you not having any "skin in the game". However, that doesn't stop me from trying to get my deals 100% financed...eventually I may find a way to make it happen. 

Personal story - I've had a deal under contract before where the bank would provide 75% of the financing. I then made a deal with the seller where they would pay for ALL closing costs and hold 25% of the debt with NO lien on the property. It would've been a true 100% financed property. I thought the bank would give it the "OK" since there was no additional lien on the property, but they still said no and lowered the amount they were willing to lend. I was upset to say the least.