All Forum Posts by: Matt Vogt

Sounds like it could be. It's a numbers game... you're not going to nail them all. I can guarantee you won't get any you don't follow up on. 

"You miss 100% of the shots you don't take" - Wayne Gretzky

Cash for keys??? You've already spent 2K on cameras etc... maybe offer $1K and see if they will leave.

Obviously the 20% is a better option without considering a subsequent investment, however you need to factor in how long it will take you to save the 8K again and how much those delays will cost you (in hypothetical lost profits). The 3K of PMI will be spread over several years.

If you're investing 8K now to save ~100/200 per month, whats the ROI?

The biggest concern I would have is cash availability for worst case scenarios. I would be concerned that you would be too exposed by having two new properties without a great handle on repair status/major mechanical systems (especially with upstate winters nearby) etc. Hopefully your emergency fund of 10K wont be used for either of the acquisitions, although I wouldn't be comfortable with only 10K covering 2 multi-family properties. I assume you'll be using the equity of your current house for the purchases. Is the 25K equity what you would be walking away with after closing costs etc? I'm seeing roughly 35K of cash available for purchase/repairs/emergency fund... is this correct? Are you currently working outside of RE to help buffer in the event of financial crisis? 

My school of thought is that you're better off growing at a slower rate while ensuring that you're protected/prepared for issues ahead. Even if your emergency is a line of credit or HELOC that you can leverage, it's important to make sure that you can service the debt.

IMO you're better off being conservative and growing slower than you are loosing your 35K. 

Best of luck

Obviously it will come down to who your potential/ideal tenants are and what the market dictates rents should be for this place/ alternative options.

1) Tub is gross.... get that fixed

2) Paneling is very outdated... remove, drywall, paint. Alternatively, just paint it white.

3) Power wash the garage... it looks neglected

4) Kitchen flooring looks like a commercial vinyl floor - replace with tile

You can get a renter for it as-is I'm sure (once the bathroom tub is fixed). Depending on the type of tenants you're looking for, you might need more updates or you might be OK. 

How much are you looking to rent each side for?

@Dana Whicker

I am not seeing this (along with pretty much everyone else posting here). What are we all missing? 

Net worth = Assets (RE holdings in this case) - Liabilities (debt)

1,000,000 = 1,000,000 - (1,000,000 * (1-20%))

1,000,000 = 200,000

The equation doesn't work out in this case... as others have said, the OP's hypothetical situation would have 200K in net worth.

You should be looking at comps primarily... this will tell you what the market is currently paying for a similar property, and will give you your ARV to base the flip on. All of the larger macro economic factors may be useful, however you need to analyze the market as-is now, not where it's trending. A buy/hold deal could use the macro factors more, but a flip you're looking at 3-6 months most of the time before selling.

Short answer: NO. The lot isn't likely to provide income. Unless you have plans for development, it's just speculation.

I am not a CPA, but it would depend on when the car is actually "Sold". What were the terms of the agreement? It would depend on if the payment is considered a deposit or if the buyer officially "bought" the car FOB at that point in time. Did you sign a bill of sale on July 18th?

Why is this an issue for you anyhow? I would think that taxes would be due by April 2017 for 2016 activity... and both July and October are in 2016. 

1) It all comes down to analyzing the deal and getting your assumptions (rent, vacancy, cost of repairs, maintenance, CAPEX, utilities, etc) as close as possible (or at least very conservative). Additionally, make sure you have enough cash (or LOC) to handle unknown/unforeseen expenses.

2) Model it, sleep on it, then model it again. Once you're set on it, figure out what it's worth to you and make an offer (assuming you have financing etc all lined up). 

3) They are, however they dont capture your property insurance, your PMI, or taxes into the equation. Get familiar with the =PMT formula in excel, then compare results to the zillow calculators. You'll also want to account for the taxes and other expenses that get rolled into your mortgage (closing costs, PMI, etc).

Good luck.