All Forum Posts by: Max Feinberg

@Steven DeMaiolo Welcome! Happy to hear you’ve got the bug and are looking into real estate investing. Out of curiousity, how are you arriving at that monthly expense number? Do you have a breakdown of the costs that you are using to get that number? That will help to understand the viability of this particular deal. Max

Hello,

As has been mentioned before me, I don't think there is one single, correct answer. I agree with Alex in that if you have 50k total to invest, the suburbs of the aforementioned areas may be best. You should see a decent return in the suburbs of the Pittsburgh area if you choose your area and properties wisely.

Max

Awesome thanks for the reply Eddie. So, for example, if I wanted to make it as simple as possible meaning no balloon and no down, would this situation make sense:

I purchase at $38000

I set repayment period at 5 years based on a 50k future assumed price.

I set an interest rate of 10 percent (these are all just hypothetical mind you)

50/5 = 10k a year in payments from tenant

10k @10 percent interest makes it 11k a year in payment

11k/12 months = 917 a month 

So after 5 years, the house is theirs and I have made 17k (minus associated costs). Is this a logical train of thought? Reasonable numbers? What would anybody here recommend doing differently?

*** I am well aware of the monthly costs of managing the property/maintaining. These numbers are intended to be as basic for now as possible just to better understand

Hello Everyone!

So I have an interesting idea that I would like an opinion on. I am a realtor in the Pittsburgh area and I just met a client who really wants to buy a home, but has a very low credit score as well as minimal money for a down payment. This woman and her husband are extremely nice people and apparently have a had a pretty tough past. For this reason, I would love to help them achieve their dream of home ownership in any way that I can.

Just today, she sent me a $38,000 dollar house which is in a decent area, but only able to accept cash and conventional financing which they are obviously unable to do. My thought/question is this...if I could purchase this property in cash myself and offer them an owner financing situation, what would be the best way to structure this? I do some investing myself on top of my real estate business, but have never done anything with owner financing. How would you set up a deal where they do not have to pay much down and I am able to make a reasonable cash flow (nothing crazy obviously on a $38,000 deal).

Anybody with experience in this area is welcome to chime in!

Hello Eric!

I just saw this thread and wanted to follow up with you to see how everything worked out. Did you purchase the property? Do you have any additional questions? I grew up very close to Verona and do a lot of work there as well. PM me if there is any way I can help!

Max

Hi Dan! Nice to "meet" you. Please let me know if you have any questions and I would be happy to assist you! I mostly work in the East side of town, but do a little bit of business everywhere.

Best of luck to you!

Hello Josh!

My sister is a lender with First National Bank and I know they have some good loan programs for first time home buyers. While your situation is a unique one, I am sure she would be glad to answer any questions you may have.

PM me for her contact info!

Hello Christopher!

Thanks for posting this deal. I always enjoy analyzing specific deals to get the opinion of everyone else on this site. In this case, I have to think you need to rethink the numbers a little bit. As a realtor in the area, I can speak to the Wilkinsburg market and I believe you have both the rent and the ARV overvalued. I have run a quick search out of curiosity on the local MLS, and there has been only 1 multi unit building that has sold for over 100K in Wilkinsburg over the last 6 months...and that was a fourplex. There have only been 2 single family homes that sold for over 100 in the last 6 months.

While you did not mention how many bedrooms or baths each unit is, so I cannot properly speak to the approximate rent, I am confident that it would not be near as high as 3500 a month. My advice...stay far away from this deal. 

Do you live in the Pittsburgh area?

Hello Philip!

I am an agent in the Pittsburgh area and would love to help you in your search. As Brian said, there is no wasting our time...it is our job to assist! I work with many investors, including a couple from California, so please feel free to reach out with any questions you may have.

Hello Adrian, I was wondering the same thing and came to the boards to find an answer. I am specifically wondering what is appropriate for the Analysis over time portion of the Calculator. How much is typical for expense increase? Income increase? I know property value is highly specific to the area, but what is an expected range? As far as vacancy, repairs, management, cap ex, I generally lean towards being very conservative in my estimates. It can only help in the long run. Vacancy rate at 10 percent is a good number, while a lot of people like to use the “1 percent rule” for repairs and maintenance. While this is generally a decent estimate (1 percent of the property value per year), it is not always accurate. We are all aware that there are PLENTY of 50k properties that need a lot more in repairs than a 500k house. So I use that rule with caution and only as a starting point. Management fees for single family homes are generally around 10 percent of the gross monthly rent per month. Hope this helps a little bit. Max Feinberg