All Forum Posts by: Mike Waltman

Just got off the phone with a potential seller. He purchased a 5/3 single family home as a complete beat out foreclosure, renovated it and now has it set up as a 3/2 - 2/1 duplex. Units are not rented out as they are doing a Live-in Flip. Looking at the county appraisers site it is still permitted as a single family but the lot is zoned for multifamily. 

If I were to do this I would be purchasing with private money and refinancing out. My concern is that having two units would cause a problem when it comes down to the inspection for the refinance. 

Since its zoned for multifamily would it just be a matter of applying to get it re permitted as a duplex? 

Seems like there could be some trap doors hidden here but I can probably get it around $120k (about 70% market vaule), its newly rehabed with nice finishing and total rents are around $2000. Would cash flow very nicely so its worth considering. 

@Jim Hiler might be interested in this 

Will definitely be there 

Check out the bigger pockets rental property calculator under Tools on the top of the page. It's really convenient for analyzing cash flow, ROI, cap rate, etc. for each potential deal. Also gives you a professional looking analysis summary print out. Really good for lenders and partners.

In case you don't know how to, pressing the @ button and then (without a space) begin typing a person's name that has commented on the thread will allow you to @mention the person so it alerts them you've responded to something they've said

@Scott Goulet You want to account for a percentage of the monthly rent going to all those things. Even though you may not have vacancy, repairs and big ticket expenses (roof/hvac etc) every month if your holding you will eventually and accounting for it will give you a much more accurate representation of your return. Include property management costs in there too. You may not need it now but you never know, there are a BUNCH of reasons you might need it in the future and if your property won't cash flow if you have to add on management that is a big problem.  The percentage for each factor depends on how conservative you want to be.

Most people do..

Vacancy 5-10%

Repairs 5%

Cap ex 5-10%

Property management 10%

So for this property that's renting for $1500 per month you should account for..

Vacancy $75-150

Repairs $75

Cap ex $75-150

Property management $150

$375-525 per month 

Add that up with taxes, insurance and your mortgage payments, subtract from the rent and you'll have an idea of your realistic cash flow. 

@Scott Goulet what kind of financing do you plan on using? How much down payment? Have you factored in vacancy, repairs, cap ex and property management?

Going to have to reiterate what Jon said, very hit or miss in that zip code. Also I've spoke with property managers who say they've experienced higher turnover rates there in part because utilities are from the city as opposed to FPL so its more expensive and most likely with an SFR you'd be passing that expense onto the tenant. Have also heard something about business permit requirements for rentals in City of Lake Worth, not too sure about the details on that

Welcome to the site @Tashana Baker. If you haven't already started listening to the podcasts, you're missing out! Lots of great info and tips from experienced people 

@Philip Klinck What are you mailing? Yellow letters? Postcards?

@Mitchell Jaworski pretty sure you're talking about Richard Kerski. He has experience with 55+ flips and seems to be doing well with them. Not connected with him so I can't @ him to the thread.