All Forum Posts by: Justin Moon

Any tips on what to watch out for before, during and after the inspection?

Hi guys,

I'm running the numbers and there is a property I am interested in purchasing. This would be my second investment property, but my first foreclosure that needs some heavy work done to it. The property is currently listed for $70,000 but needs about $30,000 worth of work (floors need to be replaced, all moldings need to be replaced, all walls need to be repainted, caulk around all windows is black and needs to be replaced, a lot of doors are broken, AC units needs to be replaced, room most likely needs to be replaced, two large trees may need to be removed to prevent foundation damage).

The property has been on the market for about 5 months and there aren't any offers on it. If everything was in tip top shape, the house would be work about $100,000, and this is a non-homepath listed foreclosure. If I can get it for around $30,000-$40,000, I think this could be a good deal.

One last note, the previous owner converted the garage into a bedroom, and it definitely slopes a little towards the street. Long story short, no garage.

Any tips? Anything I should be mindful of? Thanks for everyone's help.

He is showing me a foreclosure because I'm looking to purchase rental property. Rent comes show 1100-1300 a month in this area, and the property is listed at $70,000. It needs a bit of work though.

Pros, cons?

The realtor I work with found a foreclosure that looks promising if I put in the work. I went for a viewing yesterday, and it needs a bit of work but I can see the potential in it if I buy it for the right price.

While we were viewing the property, he mentioned something about a hard money loan. This was something I have never heard about before but the realtor gave me some literature and after doing some research, it is a very interest strategy. At the end of the day, what are the downside risks if I chose to use a hard money loan to conduct repairs in order to re-fi out of the hard money loan?

Chris,

According to the county property tax records, the value I stated earlier is the total taxable value.

In regards to renters, the entire complex is rentals. There are quite a few people in the complex that own 10+ units.

The area is not BAD but it isn't the greatest either.

sorry I meant per year not per month. And yes the asking price is double what the appraisal is via the county.

I have a realtor that I have worked with in the past that sent me an email about a rental that is up for grabs. I've run preliminary numbers, and this property seems too good to be true. It's a multi unit condominium that was built in 1971. This is a standard sale, and not a foreclosure

Setup: 2 br/2 bath, approximately 1200 sqft

List Price: $44,300

Appraisal value: $23,000

Cash flow: currently have a tenant until September 2014 @ $750/mo

Property tax: $700/year

Insurance: maybe $600/year?

HOA: $3096/mo. Includes outside the walls insurance, gate, water/sewage, grounds.

Occupancy: 100% occupancy

Mortgage: $168/mo based on $40,000 price and $8,000 down.

Can I lose out here? Given the price, it isn't in necessarily the best area but it isn't the nicest either. I'm running a lot of different valuations and cash flow calculations and the numbers look fantastic. There is a problem though....

THE PROBLEM: Or at least a problem to me.....If this property looks this good on paper, then why is the seller trying the move the property? On the flip side of this coin, this property has been on the market for approximately nine months but to be fair, there are some reasons why. The current owner is an investor from out of state and had to put in about $3,000 for renovations because the previous tenant trashed the place. In August, a buyer put in an offer and it was accepted, but backed out.

Considering everything in this post, what is going on here?

Ed,

What about from a personal perspective? I apologize if I came off as unclear, but I was looking for advice on how to manage each point when managing the property myself. For instance, I have never evicted anyone before, not have I ever run a background check.

@ed o.

Any tips on how to manage effectively? THe biggest things that come to mind are screening, background checks, contracts, delayed payments and evictions if if it happens.

Question guys,

I am venturing into the rental realm and I had a question to ask about landlord-ing. Is it better to go with a management company, or to just manage the property yourself? I know this is a REALLY subjective question but I am bringing this topic up because the fees management companies charge are a bit ridiculous. How is anyone suppose to make money when a management company charged 1 month rent AND a monthly fee?

I've been doing a bit of analysis and the cash flow on the property looks decent even when factoring things like the 50% rule, but this is under the assumption of not having a management company.

Any help would be appreciated.