All Forum Posts by: Michael Sykora

Hello BiggerPockets Members!

I've purchased my first out of state property in Indy about 2 weeks ago (mid-Jan), and am looking for the 2nd.  Details on the deal:

• Address: Emerson Heights, Indianapolis, IN   (I'd prefer to not put the address in this post though willing to share over direct message)
• Purchase Price: $115K
• Rehab Estimate from Contractor: $60K
• ARV: $210K
• Rent: $1200
• Bedroom/Bath: 3/1.5
• SqFt: 2172
  
• Lot Size: ~6400
• Year Built: 1923
  

I'll likely make this a fix & flip as I can't really get the numbers to work on a hold. However any thoughts on the ARV? Am I being a little aggressive? Additionally the inspection did find some roots in the sewer which the rehab estimate doesn't cover. For those familiar with the Indy area, is a sewer lateral inspection & fix required at the time of sale? And there is some minor slopping in the floors. Is that expected in this area with the age of the property or would this scare away prospective buyers?

Thanks for the insight and any other thoughts you have!

This question is rather broad and understand the answer will depend on everyone's situation.  There I'm looking for some guidance on figuring out how to calculate the numbers rather than a simple "you should do this" answer.

The Situation:

I live in California where I purchased a home (primary residence, though was 'house hacking' and renting out my in-law) in Daly City for $905K about 3.5 years ago.  Per Redfin/Zillow, the home is in the $1.25M range now.  We purchased another home where we'll be moving and I'm now trying to decide if I should keep this Daly City residence to rent out or sell it and look for another property (most likely out of state or in the San Jose area) to invest in.  I want to run the numbers to be able to make the best choice, but I'm struggling to figure out what numbers to look at.  

My thoughts on calculating if I should "Sell and Buy Something New:"

I believe I need to break this calculation into two steps 1. How much will I make on the sale? and 2. What does the investment look like for the new property.

1. How much will I make on the sale?  I'm guessing this is as simple as taking my estimated sale price, minus any expenses to make it sale ready, real estate agent fees, city fees, and any taxes to state/federal?  Then with this number I'll know how much I'll have available for the 2nd step:

2. Numbers for the new property?  I'm thinking of leveraging one of BiggerPocket's deal calculators to understand the numbers.

My thoughts on calculating if I should "Keep the Property":

Would one of the BiggerPocket Calculators help with this one?  I'm assuming I would take the estimated rent, minus all expenses (taxes, management, estimated repairs, vacancy, mortgage, etc) to understand cashflow, and leverage an appreciation estimate to guess what the property could be worth in a number of years?

Comparing the Numbers:

Once I run the above analysis I review what my cashflow and appreciation might look like to make the final decision?

Questions:

1. Any flaws you see in the process listed above?

2. Any large expenses/costs/process items that I'm completely overlooking?  When I initially thought through this I forgot about agent fees to sell the property, which is a huge cost.  Did I forget any other major costs?

Hello Fellow BP Members,

I wanted to get people's opinions on a new business venture I've been thinking about.  I've been listening to a number of the BP Podcasts and am noticing a common thread for Wholesalers and people looking for Flips.  That finding leads is obviously a tough thing to do and requires a ton of marketing time and effort.  My background is in online marketing, and I was wondering what people think about a 'Turn-Key Online Marketing offering for Flippers and Wholesalers.'  The idea would be to provide a website (for those that don't have one yet) and setup adwords, facebook, craiglist, etc accounts to get leads funneled to the client's website.  I wouldn't do any of the qualifying of leads, I would leave that to the Flipper/Wholesaler, but they would pay for the leads driven to their website.  I would think this would be an easy way for people without much online experience the ability to start their real estate investing business with an online presence.

Is anyone aware of a business like this already in existence?  I've found companies that do something like this for real estate agents, but not for investors.  Do any of you feel as though investors would use a service like this?

Thanks in advance for any ideas/feedback you can offer!

Hello Everyone,

I live in San Francisco and am currently renting. I have been wanting to jump into real estate investing for some time now and seeing how I would also like to own a home, I feel as though purchasing a multi-unit property as my primary residence would be a great way to achieve both of these goals. I was curious if anyone could provide me with some advice on this topic from their own experience. Specifically, the SF bay area is obviously one of the most expensive real estate markets in the country, therefore there are a number of items I'm trying to think through (like financing, working around the FHA limits which are pretty low for SF Bay Area prices, etc) but specifically I'm trying to figure out how to find the right opportunity:

When looking for a multi-unit property as an investment, cash flow is usually the goal. Some people use the $100/month/unit calculation.  However in the SF market, I don't see it possible to find a duplex, triplex, 4-plex where the rent from the other units would cover my mortgage completely.  Therefore I'm having trouble deciding how much I would be willing to pay for my share of the mortgage compared to that covered by the other units.  Ex: Let's say that I find a triplex where the other two units pay $2K/month in rent, I wouldn't want my expenses (including mortgage) to be $6K/month.  What should my goal be?  For my portion of the mortgage to be half of what the other units pay in rent?  Should I use the $100/month/unit calculation as if I was just another tenant?  I'm having trouble figuring out a good 'rule of thumb.'

Thanks in advance for any help/advice people can provide.