All Forum Posts by: Mike Flora

ARV 350K at time of purchase Purchase price was 292,500.00 25K down 1% interest on the remaining balance after each payment. $1,100.00 comes off principal every month and that never changes. 4 year balloon payment Rents for $1,800 a month Had to put 10K into repairs to get it to rent condition. ARV now worth 390K Got 2.5 years left till loan due I have done some flips with a year note and principal only payments as well to beat out my competition. Just find the motivated sellers and tinker with terms, down payments etc etc

What is your average purchase price on these homes? If your flipping then you should be getting a pretty good discount and there should be no problem on the cash flow on most of your deals from what I’m getting from this. At $1700 rent a month that is.

A lot of variables involved with you, your market in your area, do you have another job other than just real estate etc etc etc. I live in Southern California and I’m involved in SFR rentals/flips. I work as a paramedic/firefighter and make 6 figures a year and own the real estate business with another firefighter/paramedic. So we put our rentals on 15 year loans for now until we decide to leave the fire department and solely rely on our real estate business for income. SFR I’m so cal don’t cash flow well at all!!! Just purchased a SFR for 165K, with almost no repairs needed to rent, and it’s worth apx 220K as it sits and ARV is probably 235K. 2 bed 2 bath 1100sqft and rents for $1200 a month. I only need 10% down to purchase this property with private money and then refinance with putting minimal amount of repair money into the property. Should I pass on this deal???? I DONT THINK SO!!! And no one else would either. My market in SFR where I’m at with cash flow doesn’t work very well but I’m not going to not pick up rentals just cause it doesn’t cash flow. I have a secure job as well if needed to pick up the mortgage or other things if real estate market turns as well. Like I said, a lot of variable of your life, other jobs/income and your market. Do the math, sit down and figure it out. Just cause no cash flow at the moment doesn’t mean don’t do it.

I don’t know what kind of numbers your looking at with each of these and how much money you need to put back in play but the refinance money you will receive will be tax free and the LOC will have interest when you use it. Just something to think about when using a line of credit in large amounts of money.

Nathan Guyette can you buy stocks below what they are worth? I bought a house for 50% off what it’s worth. Can you buy stocks at 50% off? Look at real estate this way....you can make money the day you purchase the property. Can’t do that with stocks.

Every market will be different for a wholesaler. Where I’m at in California it’s extremely hard to get deals and I will offer more than a wholesaler. I know a few wholesalers and they are getting nothing at the time and deals are shrinking, BUT YOU WILL NEVER KNOW IN YOUR AREA UNTIL YOU TAKE ACTION! You will find out if it’s dead in your area if you put in the work and take action.

This is also specific on what type of property your buying and what market your in. I’m a SFR guy in my area/market and I’m currently in Escrow on a property that is valued at 225K as it sits and ARV of 235K. Purchase price is 165K and it will rent for about $1,325. Run your math and tell me you would not buy this property because it doesn’t cash flow. 2/2 1000SQFT and I don’t need to fix anything prior to renting. I’m putting this property on a 15 year loan due to my situation and circumstance and how much money I make with good security if market turns some. One thing about condos is HOA’s usually don’t go down over time so it can take away some of your rent increases as well. Now of course multi units are different than this and every market is different but for the deal I explained above is a total equity refinance play for me in this tough market I’m in. Very difficult to find a SFR that will give a good cash flow in this area I’m in so it’s pretty much a purchase at a great discount and let the market do its thing as you wait, tenant pays it down and refinance/sell or 1031. It’s not always about cash flow in all areas. Gotta take what you can get sometimes.

Ray Lai said, it’s almost impossible to get a deal that’s listed now days, but I do use Zillow in my prime area and here is why. I know I can add SQFT and a bathroom to a couple models of the cookie cutter neighborhood, so I will be offering more than almost all the other investors and I will make the listing agent I find on Zillow my buying agent to put the offer in which in turn they might even take less of a commission to get the deal done. So I only use Zillow in my immediate market I know I have an advantage in and utilize the listing agent to my advantage as well. So I only see it useful, at this time, for the special things you know you can do to a property that others don’t.

I have used a PI before and it paid out big time with a property. I have TLO and other ways to find people and the PI is my last option to use if it makes sense to find someone to make an offer on their property. Linda Weygant yes it can make a seller upset but if all things add up to benefiting a seller then I go for it. I look at how much I spend on a mailing list at times and get nothing out of it so paying the PI on a vacant property, that is in need of a lot of work, has years of back taxes on it etc etc is worth it to me. I did it not long ago on a property and the heir was pleased I paid for the terms of succession fees with my lawyer and purchased as is. I currently have the same PI looking for another owner who is going to lose his house to tax auction soon if all back taxes not paid and property is vacant and highly distressed. Family members have not seen him in years so even if he tells me to pound sand I can tell his family he is alive at least and he will know he is going to lose his house to tax auction and he can rectify his problem himself. Not being able to find owners can be a good thing with the right property and situation cause that means no one else is talking to them about buying their property! Until you hire a PI when all else fails in locating that person.

If your only focusing on real estate now then I would suggest putting some of that money towards some sort of marketing to get deals, use the profit on your flips to start purchasing some rentals and use as little of your own money to pick up each property. Leverage is key to real estate investing when that’s all you are focusing on. I will try and use as much of other peoples money as possible. You gotta have deals coming your way as well so put a good portion of that money to the side to keep a steady flow of leads coming in. WE ARE NOT IN THE REAL ESTATE INVESTING BUSINESS, WE ARE IN THE MARKETING BUSINESS.