All Forum Posts by: Michael Wentzel

@Account Closed I use zillow.com and realtor.com, as they both provide great maps, filters and a good bit of info on properties. But I usually cross-check them with the local mls website, as that seems to be the most up-to-date.

The best move I made was having my Realtor set me up to receive emails any time a multi-family is listed or changed and any time a single-family under $40,000 is listed or changed. That has helped me stay updated on the deals coming into the market.

For analyzing I think you should build your own spreadsheet or become a member on bp to access their tools. Posting potential deals on the forums can also get you some great feedback.

Mike

Hello everyone,

Inspection today on the 3 bed, 1 bath with a questionable foundation. The one good choice I've made is picking a Realtor who owns rental properties and flips houses. She made the effort to get a mudjacker to come and look at it before the inspection started. He said, "Run away"! It would cost $10,000 to $20,000 for a temporary fix. We cancelled the inspection and we're trying to get the earnest money back.

I'm learning the importance of having a great network of subcontractors who are willing to look at a property with you before it is under contract (at the earliest) and/ or during the inspection process (at the latest). I'm also learning that a questionable foundation usually means run in the other direction.

Most of you on this thread were correct. I was wrong. I am fortunate that I found out I was wrong before the closing. Thanks for the input.

Mike

@Account Closed Welcome to Bigger Pockets! You've come to the right place to learn and network. How far into the learning are you? Have you read the Beginner's Guide? I think you can find it under the "Learn" tab at the top of the page. Have you listened to the podcasts? There is a ton of information packed into those.

Good luck finding a mentor. It seems like there are a good number of investors n upstate New York. Have you attended any REIA clubs in your area yet?

Mike

@Deion Alaei Lots of good input. One other aspect I would take into consideration is if you're going to manage the properties or turn them over to a property manager. If you're doing the management yourself, running around town to 10 different sfh's might drive you crazy. However, if it is a 10-unit multi-family, you just have one physical location to visit and watch over. So if you're personally managing the properties, these might be some benefit in having a 10-unit multi-family instead of 10 sfh's.

Mike

@Justin Moon Type property management in the search forum above and you'll probably find 1000 threads. Even if you do plan to manage them yourself, I would encourage you to factor in the 10% for property management when you're analyzing deals. That way you can pay yourself for your time or have the option to bring in a property manager as your portfolio grows.

Mike

@Ryan M. I'm sure there are many posts on the LLC topic if you use the search function. I'm in a similar spot to you. I have three properties and should close on a fourth next month. They are all in my name. The first two have conventional mortgages an the last two have commercial lending. I feel like I need an LLC, but what is the purpose if I can't put the properties into an LLC. It is on my list to research this topic and get some ideas from friends.

Is there are typical progression for newbie Real Estate investors regarding entity structure?

Mike

@Aaron Montague I appreciate your input. It is great to have more experienced investors lending their insight.

Mike

It would have been nice to get a professional's opinion before signing, but there were a lot of other offers behind mine. So we signed today.

Our thought process is that the purchase price is $23,000. The basic rehab is $5000 to $10000. The ARV should be around $45,000. So if we refinance at the ARV, I get all of my money back out and have a cash flowing property. If the foundation needs $5000 of work, I end up having $5000 into a rehabbed and cash-flowing property. After it is rehabbed and refinanced, it should still cash flow $150 a month.

For the worst-case scenario, read @Aaron Montague above. Let's hope that I'm writing a success story in a month and not another lesson learned the hard way.

Mike

I'm looking at picking up a single-family house in southern Colorado for $23,000. It is actually owned by Medicaid and we're dealing with an attorney in the negotiations. I'm estimating $5000-$10,000 in rehab.

It should rent for about $650 per month, cash flowing around $200 after expenses and PITI.

The catch is possible foundation issues. Front door leans a little, cracks in the stucco, floors a little slanted and cracks in the plaster in one bedroom. But the place was built in 1900. My optimistic mind says that house is solid and isn't going anywhere after 113 years. My pessimistic mind says I could sink my entire rehab budget into foundation repairs.

The attorney wrote up the counter proposal in such a way that the property is sold "AS IS" (which is common) and that we waive our right to terminate the contract after inspection (not common).

I keep going back and forth between grabbing it at a great price and making it work or walking away and looking for the next deal.

Any thoughts?

Mike

@Levi Pollard Great Levi. I look forward to hearing from you. Do you think he would be okay coming into Pueblo for the work?

Mike