All Forum Posts by: Matt Fisher

My tax advisor (a good one) has mirrored @J Scott's comments. You are dealer, houses are your inventory. Expect to take (very roughly) one half of your gross profits home.  Thanks Uncle Sam!!!

Lol.  Posted and then saw Jedd had responded.  Great minds think alike!

One more comment.  There has been a rapid increase in new multi-family development.  Although this will hurt other rental markets, I don't have a good feel for how badly.  My inclination is that it will cater to growth and existing rental opportunities will be relatively unchanged.  Just a 'gut feeling'... based on little data.

These are good markets, but I think it would help to know what your target market is.  For the Des Moines Metro area, these are rapidly growing areas and there is much growth in the commercial markets there...  Both have a lot of new development and Waukee in particular has a high percentage of new development.  West Des Moines has some older neighborhoods.  Realistically, the entire metro is a 15 minute drive and all of it would be accessible to you if you lived there.

Regards and good luck.  Look forward to meeting you.

Matt 

I understand your desire to find turnkey, but in my mind it is not a great passive income strategy for a number of reasons.  Some random thoughts:

1.) Even on houses that are acquired at substantially lower than market value, cash flow seldom amounts to much.  A couple hundred $ a month? Property management will eat this alive.  Especially if it needs any major capitol upgrades in the next 5-10 yrs.  Do the work yourself (or hire it done).  If you aren't a multiplex, your property manager isn't giving you what you deserve. Trust me, I'm buying a house from an absentee landlord that had "property management" in place while his investment was destroyed...  

2.) Buying at a greatly reduced rate buffers you from market corrections or changes.  If you're paying a turnkey investor you're losing a lot of value (they're keeping it, not you).  Find a retiring landlord.   They have rented houses...

3.) As a former North Liberty resident, I think the houses there are overpriced currently.  Most people that live there don't like it and it seems that people transition thru there.  It's mostly young people... For that reason it would be a great place to rent, however the prices are ridiculous.  Most of Iowa City's pricing is astronomical, but deals can be found.  Prime rental locations near campus are tried and true, but expensive. Be mindful of floodplains in CR, but IMHO that's where I'd focus if I lived in the corridor again... 

4.) I don't know of any turnkey companies in Iowa.  I'm sure they're here, but they aren't as popular(?) here as elsewhere.  

I understand the concerns about family and attorneys. I'd work with mine to mitigate this risk. I want her family to be involved as soon as we find agreeable terms. Her daughter is a practicing attorney.

This is not a "next to nothing deal. It would require a substantial addition to make the house liveable and if she lived another 20 years the maintenance, lawn care and snow removal would be considerable expenses. If I paid her cash it would go towards assisted living, not inheritance so its a wash...The value of of the home is approx $140k which would be consumed immediately buying into one of the facilities. Carrying the financing wouldn't provide close to enough funds needed to pay (upfront costs of) assisted living. I don't think leaseback alone would pay for the addition she would need but I am still thinking about this (and was originally considering this route). It certainly is less perilous.

Any other suggestions about how to do a deal similar to what I suggested?

The short version: I'm looking for creative ideas about structuring a deal to keep an elderly woman in her house for as long as she can.

The details: I recently had the pleasure of meeting an elderly woman who asked me to make an offer on her house.  She has lived in the same house for 50 years (!) and recently lost her husband. She said she's looking for assisted living but its too expensive, cliquey, and she loves her neighborhood. She is primarily concerned about her lack of a first floor bath and maintenance/upkeep of the property. The house is a beautiful 3/1.5 foursquare in good repair in a nice neighborhood. Newer roof, mechanicals, stucco w new paint and beautiful woodwork inside. 

I have somewhat limited financing due to multiple deals and would prefer to avoid taking a mediocre deal to my bank... 

I would like to propose a way to keep her in her home for life (or as long as she can reasonably stay). I would like to offer to build a first floor/accessible bath (bad knees) and possibly a garage (analogous to a down payment) and maintenance and upkeep ( the "mortgage payments") in exchange for her deed upon passing away or going into a nursing home. 

I would like to hear others opinions, experiences and considerations when structuring a deal of this nature. I think this could be a real win-win for both of us if she's interested.

TIA,

Matt

P.S. I realize this doesn't cashflow, etc. I'm treating this like a sweat equity/long term payout deal... 

SE 

Hello,

I am looking for advice regarding a low-value property loan. I have a 2 bedroom condo in Des Moines, Iowa that needs a rehab ($22.k purchase, $15K rehab, $65k ARV).

Typically I would work with my bank, however they are tied up with some big projects right now and are reluctant to do this.  I plan to refi with them upon completion and hold for a couple years at least.

I am looking for suggestions on how to finance such a low-value loan.  Most hard money lenders aren't interested in taking on projects worth less than around $75k...  Or at least I haven't found one that will take this on.

I have not sought private money before and I'm hesitant to bring such a small deal to those I know who might be interested in funding this deal.  Maybe I'm thinking about it wrong-this might be a good way to test the water?  I had hoped to establish a longer track record through my bank before taking it to my friends, family and associates.

I welcome your thoughts!

Thanks,
Matt

Any investors from the shores of Tripoli (Iowa)?  Of course we pronounce it differently, like Nevada, lol.  #iowajokes