All Forum Posts by: Mike Soofian

Hi, 

I am starting out and would like some help with advice on moving the needle forward/ action plan. 

I live in an expensive suburb of NYC, Rockland County. Houses in decent shape easily fetch for $500k - $1M. Land can also be very expensive easily 250k+. 

Goal: Use a construction loan of about $250k to build a 500sqft STR.

Property: 1.96Acres, 100*868ft with the back half is a steep sloping mountain which abuts state park/land.

Target Market: Couples and solo adventurers

Since neighbors are close to road, I would position the home close to and facing the mountain. This would give a great sense of privacy and nature. My initial idea was create a black A-Frame home with mid-century detailing but have been thinking to go a container/modular style although not using containers. I work full-time so cannot put sweat equity but looking for construction methods to maximize the build long term. It wont be good for equity due to total sqft but i think using a more business model... i think it can do $200/night safely with a 50% occupancy. Some details I would like to use would be using concrete piers and slab foundation to prevent moisture issues from water run-off of mountain. I would also like to include radiant heating in the concrete foundation to keep. 

Notes- Property has hookups near street.

I did see some sort of large rusting drum. Im not sure what it was but I am assuming its a cause of concern... if there was once a foundation on this property... I walked it with over 2ft of snow down so hard to tell...  

Baseless projections/ budgets: 250-300k (max)

Property 120k (this is asking but I would offer something like 75k. It was last sold 42k in 2014)

Permits 4K

Site Prep (utilities, driveway, decking) 30k

Foundation 20k

Build costs 70k

Furniture & Decor 5k

Hot tub 5k

Miscellaneous 3k

Anyway, so... can I get some advice if number make sense to you at all? Also, I am assuming I need to work with an architect and GC to get started (not to mention buying the land)... but who do I go to first? Where do I start? 

I do have a lot more details including zoning for this project but dont want to overload the post... if interested, i can expand on my areas of research and I can provide specifics...

Thanks in advance. 

Hi BP Members,

Haven’t been actively pursuing my first deal but came across an interesting find for my area. Semi-detached home needing what seems to be a total rehab.

Asking is 279k -1,928sqft

From my research, similar homes (sqf and room/baths) are selling for about 340k on this block. Almost all semi-detached homes.

Guestimating about 100k repairs... new boiler, hot water tank, refinish hardwood floors (there’s currently thick red substance on it, I think that was from the carpeting that was pulled off), new fixtures and lighting, total remodel kitchen + appliances and bathroom, converting 1 or 2 half baths into a full (see below). Also would like to redo siding of the home

My plan thus far is to call a get an inspection this week, create a scope of work and get bids before the end of the week. Also, going to go to two mortgage brokers and try to secure a 203k loan.

Make an offer next week.

It’s not zoned for two family but the walkout basement is large enough to be converted to a studio. I know people here like to say to go by the book (which I actually agree and prefer it that way!) but wondering if that’s worth the investment. Maybe there is a work around for example, short term Airbnb type rental... I don’t know, just throwing this idea around to possibly increase value. I like the idea of the studio and renting out the upstairs because I intend to get married within a year and think this would be a way for me to get a place for us to start out and gain some home equity!

Also, only need to convert the downstairs half bath to a full if I endeavor for the studio idea.

Thoughts and suggestions. My outline sound?

My dad has some experience with RE but still wondering if I’m in over my head...

My money situation FYI:

24k- Portfolio Investments

13k- Cash

54k- 401k

Steady income of $3.5k/monthly after taxes

Hi @James Colgan,

Would love to hear if anything came of that deal! 

Thank you everyone for your sound advice, I am passing this one up and will keep on looking and learning. Going to finish reading David Greene's Long Distance Real Estate Investing in the meanwhile. 

@Ricky Hale, Sites like Redfin and Zillow etc note in the details if REO/ Bank Owned. Be sure to check the details when browsing.

Hi, 

Still learning the ropes and digesting but I am looking for confirmation to help drive this through my head...

In the below article, David talks about financing a BRRRR is optimal without the traditional loan.
https://www.biggerpockets.com/blog/brrrr-strategy-real-estate-investing

Being a newbie investor with only $10-20k in the tri-state area, I would need to either go to a PML/ HML or come up with creative financing (i.e. raise the money of individuals on my own by convincing people on my numbers)?

Aside from the above financing:

My Example is that I found a SFH for $195k (REO). ARV $315k.

My real estate agent has never done a foreclosure but mostly she was put off that the Heating Type is Other. She is afraid it is an oil issue and said I should expect (conservatively) to spend 80K. Now that is huge number and even if I lower to $50k would only give me a %7.24 CoC..

She said that their is no contingency in Foreclosures based on inspection. So I would not be able to back out if major repairs were needed. 

Leading to my question, how does one due their due diligence on such a thing without going under contract? Just seems catch 22... 

I have since asked her to double check that comment of not being able to back out due to a poor inspection report but waiting to hear.

Comments?

 @Wyatt Franta @Yoni Benimetzky @Jenny Roman

Thank you so all so much lending your insight and experience. Got a referral for a real estate agent in the area whom my brother used and she is being very helpful as well. She had to go but will call me back in an hour. 

She said while the title is something to be concerned about but it is handled at attorney review.
However, one thing she mentioned that stuck out was that foreclosures generally do not have Inspection Contingency which she is saying is probably my biggest risk as you cannot back out while under contract if there is are big ticket issues. 

Thanks again and will post if I have any updates! Feel free to drop me more wisdom 

Hi!

This is my first post so I am excited to finally get involved with the forums. I found a Bank Owned, Foreclosed property that I think is great at first impression. So it now time to collect the numbers and do math. I am not posting in Deal Analysis yet because I am still gathering ARV etc

It is average in size for the location 3Br/1Bath Colonial in Bergen County. Finished attic, unfinished basement, hardwood floors and steam heat... the images of all the rooms seam to be in good condition, nothing paint couldn't remedy. Built in 1926  @ $195k

I am 27yr old and just got pre-qualified for a $250k+ conventional loan but the woman I spoke with said I could probably go higher if I want... that aside...

When I saw it posted about a month ago it went "contingent" after about 2 weeks but is now back on market which makes me wonder why

At least for the sake of deal analysis, I want to call the listed agent but I would like to be prepared with questions so i can speak more confidently. Here are some I have prepped based on articles I have read:

1) How long has the home been unoccupied?

2) Has the home had an inspection recently? As I know it was recently Contingent...

3) Can you email me some comps?

Note: I tried searching for liens myself. Found through a bit of digging the lender company name and only found the deed on the county clerk website... I am assuming either no liens but will need a title company to look at that once under contract? 

Regarding ARV, I don't see any noticeable damage but assuming once under contract I will need an inspection done and then a contractor or two to price out for me? Also to add in cost for any additional things I would like to update in the home...

Please let me know if you have any advice or additional questions I could and should ask. 

Looking forward to community comments and guidance. Thanks!