All Forum Posts by: Michael Minor

Well Aaron, my opinion is sell the car and invest. I mean would you rather begin working towards financial independence or have a car that you could eventually repurchase later. Hope it helps.

I am not sure if this has been addressed or not since I didn't read every single post. I have seen very valid points about both sides of the deal. I am not a seasoned investor by any means but in the couple of situations I have dealt with realtors I have found a couple of very important things. The most important thing is that just because they have a license does not mean they know the market at all. My first home I ever sold taught me this lesson. I had been paying attention to the market as it was starting to improve significantly (it was 2015). I worked with a realtor through a referral program in an attempt to help out a friend. I was moving out of state and wanted to sell my personal home that was essentially a live in flip I purchased in 2011. The first realtor the broker sent me would not respond to my calls, texts or emails in a timely manor. I did not expect them to answer every call on the first ring or even return calls with the hour, but they would go a full day or two before responding. This was an issue for me since I was moving out of state before the house was sold and I wanted someone who could answer questions I had within 24 hours. We fired them and their brokerage sent what was supposed to be their best agent. We set down with her and discussed the property and all the updates and improvements we made on the property. After everything was all said and done she told me she wanted to price the property for $130K. I was honestly offended I did a lot of research and thought we should price it much higher. I told her to price it at $160k and if we had no interest in a week I would consider dropping the price. She reluctantly agreed, after all I had just "fired" her co-worker. The day we listed and went live was the day I was starting my long journey half way across the country. We had three offers before I left my driveway for asking plus 50/50 split of all closing costs. She was supposed to be the best and would have cost me $30k if I had listened to her. Point is do your research and know your market, but be honest. If the house needs work to be sold for retail pricing but they expect retail offers maybe you shouldn't waste anyone's time. That being said if you think the offer truly is fair based on your market, ARV, expenses, etc you shouldn't be discouraged just because a realtor, who may or may not actually know the market, says it's too low. As for all the realtors here saying it isn't worth the time I would say that is just not an excuse, after all it is your job that you chose. I am sure that the guy cleaning toilets for minimum wage would love to say its not worth it so he won't clean the toilets unless his employer offers him a better wage, but the harsh reality is that this is your job and sometimes you have to do things you don't want to do. All this being said, from the realtor's perspective, yes it sucks to make $1800 before anyone else has a take at your money. From the investor's perspective it sucks that you need to make money and if they numbers are accurate and they still think you're coming in too low, then the property isn't worth it and move on. From the seller's perspective it is worst of all because you have to hear about how hot of a market it is and you think you can get a premium for your property and really no one besides an investor really wants to deal with it which means you have to leave meat on the bone, or just fix the property yourself. Lastly, what I have noticed from my co-workers and friends is that this market (at least mine) is extremely hard because they will come in as a retail buyer and purchase a house that would normally be an ideal flip for way more than an investor would because they want to live in the property and aren't thinking about getting paid for the time and money they put into the property. Using the numbers provided, let's assume the ARV is $95k and the repairs are 10k. Some family who wants to move into the area because it is a "B" class neighborhood but doesn't want to pay the $95k for a move in ready place might offer $80k because they see it as saving $5k to move in and do the renovations themselves. This makes it impossible for an investor to even have a chance at the property because someone is willing to go through the effort of a rehab for essentially nothing. I have seen more extreme cases even with the group I work with. I currently work with someone who bought a house and they are still in their apartment because of all the renovations they wanted to do before they moved in. They are willing to pay a mortgage, rent, about $20k-$30k in renovations just to save a little money on their monthly payment. If this is similarly happening in your market, it really isn't worth the realtor's time to make a $60k offer. I probably went in deeper than I needed to here, but I wanted to support my claims a bit. All of this basically to say know your market inside, out, upside down, and side to side because there maybe variables you are not taking into account. If you've taken in all the variables and you still think $60k is your offer then find an agent who will put the time in. I hope you all enjoyed my novel and got some useful information out of it haha.

https://www.zillow.com/homedetails/18509-Juniper-S...

Please see Zillow add for more information. The hope has had carpet replaced throughout. Hardwoods were refinished in December 2015. The home is loaded with upgrades. Please see Zillow listing for contact info.

You may also consider looking at some “commercial” loans even though this is considered a residential property. My understanding is they take in consideration the property and if it cash flows as well as the person asking for the loan. If you can prove the deal makes sense you shouldn’t have any problem finding money to fund the deal. Check out Brandon Turner’s book on Investing with low and no money down can give you a lot different strategies for getting a deal done. This also might give you some ideas about partnering with your dad. I know this isn’t exactly what you asked, just some good info I thought I would pass down after reading the thread.

My personal opinion is that you sell the condo. You are losing money on rent and there is equity sitting in the property now. If you sell the condo you can use the cash made on the sale to invest into a cash flowing property. Even if you refi into a more favorable loan you probably won’t be able to reduce the mortgage enough to cover all the expenses and make money on the rental. Even if they are paying all of the utilities there are still repairs to be made and some cap ex (I know in a condo these will be less but you still have some). The other thing is property management fees. Some people will say that you can self manage and save money to make it work. My question to you is, why would you do for free what someone else would get paid for doing? This means that even if you’re self managing you should be paying yourself the same as you would a property manager for managing for you. All these expenses are surely not being accounted for currently and I do not think a refi will free up enough to cover them all. Again my opinion is to sell and invest in another property.

 Yes, in a sense. There are several ways you can structure the deal. I will say that it is going to be difficult and you may not get 50/50 in the deal. The reason is going to be lack of experience and ability to gain your own leveraging. That being said take the wise people of BP's advice, 20% of a deal is better than 0% of no deal.

The two best things I can advise. Work for two years save some cash for down payments and operating costs. The other option would be a partner.

One thought I have is that you account for 10% for repairs but I would also strongly suggest that you account for 10% for capital expenditures. Would suck to have to replace a roof if you have not been saving for it.

I certainly agree with everyone else. You have a "gold mine" in that property. I can't imagine finding a deal that can cash flow that well. Not to mention based on the cash flow I think you would be ripping yourself off by selling half for 50k. The property is worth more than 100k I am sure.

Yes, the 203K would be a single loan. There is a max amount that you could borrow and it varies by location, and I think the max allowable amount for rehab is 35k (I could be wrong here). They have appraisers that are trained to appraise based on the ARV (after repair value). My understanding is that contractors are paid through the escrow account and have to be approved to do the work. The advantage is definitely that you would have minimal cash, if any, tied up in the property while also being able to possibly have your housing expenses paid for and be gaining equity in the process. Whatever money you have left over in your account is yours and is free to be spent however you like, including investing in new properties.