All Forum Posts by: Andy More

I've done one mail campaign to multifamily property owners with great success. I sent out 80 mailers, got 8 calls, bought one 7 unit building and made 68k. I sent a letter to every property owner in my town that owned 5+ unit property between 100-300k. My second campaign will be any number of units, up to 500k, with atleast 30% equity.

I've never used any "gurus" system and just did what made sense to me.

Good Luck

I refinanced my house 6 months ago and my mid score was 806.

Im also a loan officer for 9 years and I think the highest single score i've seen was 830. Never seen anything below the low 400's. Getting to 380 is probably about as hard as getting over 820.

Stephen,

The idea of requiring a 20% return on any investment sounds nice but to me it doesnt seem like it would apply to all situations. What would you do with the following choice.

Option 1: Purchase and rehab on one house will cost 100k and return a 19k profit.

Option 2: A group of 4 homes will cost 100k for puchase and rehab and return 20k.

According to your 20% return requirement option #2 is acceptable but option #1 is not. The 20% return requirement is not taking into account that your probably putting in 4 times the effort to get that extra 1% return.

Am I missing something?

With that being said, here are the numbers i've come up with regarding the deal at hand. They are 3 duplexes that rent for $475/unit. These numbers are based on 1 duplex

85000: After Repair Value
-400: Inspection Costs
-800: Title Company closing costs(Buy side)
-5100: Realtor commissions
-800: Title Company closing cost (sell side)
-3000: Repair costs
+$7,410: Net Rental Income(65% of gross income for 4 month hold time)
-20,000:Desired profit
=$62,310 Max Purchase Price

Advice?

Thanks for all the replies so far!

I should probably mention these are duplexes. Buyers would be investors or possibly owner occupants. I could possibly sell them all to one investor thus making the project even simpler.

I was thinking of calculating my offer with with a minimum 20k profit per building instead of 25k.

Lets say you wanted to flip a property and required a 25k profit for it to be worth the effort. Would you be willing to reduce that minimum 25k profit if you could flip 3 identical properties that are all side by side?

It seems reasonable to me to reduce the required profit per property since there will be economies of scale when all 3 properties are in the same location like this.

Thoughts?

Sorry Stefan to get a little sidetracked but....

Jon, you took the words out of my mouth regarding your comments about Steve. 50 hours at day job and 30 rehabs per year is quit impressive!

Steve, are you solely flipping single family property? Any multi-family? What is your primary source of finding deals? What is your average profit per deal if you dont mind me asking?

To those of you out there that flip regularly, how often to you flip a property that does not require any renovation/rehab? 10% of the time? 20% 50%?

It seems from what I read that the majority of properties that are flipped require renovation first. It makes sense that without the detiorated condition then it would be difficult to purchase at a large discount since the pool of potential buyers would be much larger.

However, I just got my second flip under contract with a buyer and have yet to do any renovation. My first flip was a 7 unit apt. building and I made 68k and did no renovation. If I close this second flip without any further reduction in price then I will make 33k, also without any renovation.

Am I just getting lucky or do you guys regularly purchase property at a discount that requires no renovation?

Are the initials of this author JTR?

If so, I also read one of his books and calculating profit/hour made alot of sense to me! Not instead of return measurements but in addition too.

I would also assume that owners of these properties will have a higher motivation to sell and get out of the rental business as noted by the fact that they are not mainting their investment.