All Forum Posts by: Account Closed

A few months back I sold a house that I knew to be in good condition as of the closing date/time.  A day or so later my agent called me to let me know that a car had hit the house and the buyer wanted to speak with me. 

Anyone else ever run into this?  

@Zachary C. thanks for the ideas, I love burgers so Farm Burger may be the winner.  Thanks for reaching out too!

@Sharon Williams I appreciate the ideas, both of them take me into an area of town I was interested in checking out.  

I have one house in Huntsville, and I'd like to buy more before year end.  I'm coming in to town to meet with the property manager, but also to check out the area for myself.  For those that are local, what are some areas that you would consider must see, and where are a few good restaurants for breakfast, lunch and dinner. I'll be in town evening of the 21st to afternoon of 22nd.  

I had to fire my previous PM after underperformance.  There are plenty of others to choose from, but my process to choose one took a few weeks.  I interviewed 3 different ones for about 30min to an hour each, took detailed notes on both service AND costs.  

The new one is much better a handling the property now, still not perfect, but with the increase in income I can tolerate the small things much better.  

So, update on this thread.  A few things have worked out very differently, though not disastrously so far.  

It took a bit longer than expected to find a tenant, and the rent the house commanded came in at the lower range of my expectations.  It ended up renting for $795.  Not bad considering what I put into it, but still lower than the $800-850 the wholesaler set the expectation for.  It also took two months to find the tenant.  I have also run into repairs that I feel should have been caught before a tenant was placed, but the house is a little old too, so not terribly unexpected.  Nothing that blows the deal out of the water completely.  And given that there is no debt service, the repairs are easier to stomach. 

I started working on the refi about a month ago - and today I got the appraisal back. It was 25K lower than I would have expected. I look at the report and I can't find anything totally unreasonable in there as far as comps. So instead of a cashout-refi, maybe I'm looking at a HELOC on the property. I only just found this out today so, I'm in the process of figuring out next steps.

@Bruno Demir I'm not terribly opposed to sharing, but let me get this deal and maybe one other closed first.  I'd hate to be the one spreading around someone who may not work out.  It has happened to me before discussing property managers in another state.  

I'm located in Jacksonville Florida, and I have one property here, one in Virginia, and I have chosen to expand into Huntsville AL.  

I went back and forth with a local realtor/property manager for a while, and after I felt he was acting in a professional and trustworthy manner, I checked him out online and here on BP too.  

But in that search for people in Huntsville I also came across a wholesaler who also was willing to talk with me for a while on the phone and answer a few questions.  I ended up on his buyers list, frankly not expecting too much.  I was an out of state buyer, with no track record in the area to prove I can close or that I was willing to close.  

Fast forward a few months, and I get the  normal email from him with two houses in them.  One was a 3/2 1100 sqft that was in an ok looking area based on the research I'd done.  Problem was, I'd already committed alot of my own capital to another project.  But this was interesting enough to take a little gamble on.  I was able to raise some capital from a family member with pretty favorable terms for both of us, 5% interest to be paid at the end of 6 months along with a return of all their money.  This enabled me to buy the property with cash, allowed for at 10k of repairs, and make sure all my normal bills would still get paid.  

I'm buying the house for a little more than 56k, repairs seem to be around 5k, per the PM the rent in the area should be between 800-850, and online comps seem to be around 70-80k.  My plan is to refinance to a normal 30yr mortgage after about 4months so that I got a few months of rent coming in w/no loan to carry which helps out in the beginning.  

It's an ok deal overall, but I'll need to do better to hit the numbers required to get to my goal.  The point of doing this property is to start to create the local reputation, in hopes of getting higher on the buyers list.  

Thanks to everyone for responding so quickly.  I went ahead and got a real inspection done on the property.  Luckily looks like nothing major was discovered which made me feel alot better.  This property is in another state, so I couldn't be present myself.  I'm relying heavily on the realtor and property manager I'm working with to make sure all goes well.  

@Max Keller Great question on my holding timeframe.  Long story short - I need to create some "monetary velocity" with my real estate investments.  If I was able to refinance 100% of my personal money out of it I'd hold it for longer, but I'm assuming that I'll only get back ~40% or so.  It's a good deal by many standards, but I'm looking for better deals, and I need the cash for those.  

I am under contract for a house in Huntsville, my first purchase from a wholesaler - ever.  I have a PM that I'm going to hire and he's very experienced in doing flips and managing properties, and when I brought up the topic of inspection he asked about just doing a thorough walkthrough b/c the water/power might not be on.  (I have a week to inspect per the contract.)  The PM would also be using his local contacts for repairs on the property before renting it out.  This is intended to be a mid-term-ish buy and hold; I'm thinking 2-5yrs.  

The margin on this is ok, I'm looking at a potential 12% cash on cash return budgeting for about 10k in repairs, but of course if there is something major, that would get much more slim.  

I have a 16 unit apartment out of state.  I'd buy another if I could find one where the numbers work.  The key ingredient is a good PM, they will make or break you at this level.