All Forum Posts by: Natalie Schanne

Looks nice! Well done. I lived 3 years in Philly, paying $2100/mo rent at 2400 Chestnut St for an apartment that doesn't look nearly as nice. 

Did you try to rent it for $1300-1750 (1% deal based on sales price value) but market wouldn't bear?

Did you factor in the cost of your 3 months of time into the $130k all in? If your time was free, how much would you expect to have made if you worked that hard for someone else? 

If the ARV is $175, assuming 8% sales expenses, you've created net $161k - 130k = 31k for 3 months. Not bad.

(It's possible an agent can screen better for you and this will be the only tenant you will need to place in the house for 5 years...) It depends on the agent/broker. My brokerage / state won't allow me to get paid for real estate services by anyone other than them. (Maybe Remax is different.) I.e. I can't agree to show your house for you until it rents for $50-200/showing. However you could offer a neighbor or a person off craigslist a similar amount to open the door. College age leasing staff seem to get paid $10-15 per hour at apartment complexes. You'd do the tenant screening and leasing yourself (using something like cozy.co). New agents would be more willing to get paid cash where allowed because they don't have much income and ongoing leads. But, they also would like their name on an official MLS listing so they get calls perhaps leading to other business. If you don't list with an agent, you won't get on MLS where agents are looking for rentals for their clients. If you're only going to craigslist it, try the trusted party to open the door route to save money.

Money back guarantees are only as good as the Company. I went to a similar stock options trading seminar once where they showed you all the ways you could make $20k in a day by trading options. Then the free seminar turned into a sales pitch for their 5k, 10k software and mentorship packages. They guaranteed your money back to the extent they'd have someone call you and suggest trades until you earned your tuition money back. I didn't buy it. I just wrote down all the ways they were trying to trick me. (Using pictures of their kids - "obviously trustworthy" - and the guarantees - "nothing to lose.") Making buckets of money is NOT easy and not guaranteed. No amount of success stories can confuse me. Someone I was with bought the 1 year software package for $1-2k and never used it. What a waste. Great advice above - get a local mentor, get books/audiobooks, and invest in a deal where you dive into all the problems and ask everyone for advice.

If you're in business for yourself, you're a sole proprietor regardless of filling out licenses. To get the home office deduction, measure and log the exact SF of your office vs the rest of your home. Don't deduct more than that % if an expense is shared (I.e. House electricity). Take a picture. Save a statement that it's exclusively for business use. Then you can also write off the business computer, office supplies, etc. The home office deduction is an audit flag because it's been abused, so make sure the deductions are worth it and justified. Read the IRS guide on home office deductions. It's best if the rental (schedule e) generates positive income / minor taxes for not getting audited.

Would you be able to sign a contract with a seller where they pay you X for helping them prepare the house to sell it, even if you are also encouraging their eventual hiring of a RE agent? Why don't you become a real estate agent?

I'm a Central Jersey RE Agent and I'm planning to write a cash offer on a bank owned property for my own investment portfolio. Have you been successful getting your buy side commission on a bank owned? Alternatively, should I get another agent to write the offer for me with a referral fee? The wording on the listing says: If an agent is purchasing the home for themselves or as a "principal", no selling portion of the sales commission will be due. I could also use a relative or my LLC to buy it. Or I could ask for a lower sales price and no buy side commission paid (but then I don't think I'm covered by my company's errors and omissions insurance). What do you think is the best choice? The buy side commission is 2.5%. Purchase price is 400k.

David Choe I met an investor at a sheriff's sale buying a $60k second note on a 800k, 4000 sf house with a 360k first mortgage. He bid $120k at the sale. He said that the sheriff's office pays the 1st lien holder (senior mortgage) off with the extra 60k in proceeds instead of paying the homeowner or the second note owner any of it. So if the sheriff's office sends the proceeds as it should, he has the deed subject to a 360-60 mortgage. This is in NJ. Why did the homeowner get cash?

So the % of assessment is a non contested way to do it. Ie 40% building x purchase price = depreciation basis for building. Make sure to directly capitalize or expense as repairs your renovations/improvements as per code. Ie capitalize new cabinets, expense paint. You can get also comps for $/acre land then see if that's less than 60% of the value. Lastly depending on how near your assessment is to purchase price. You could consider the flat value of the land and take purchase price - assessed value of land = depreciation basis for building. Save documents from county website tax assessments to justify. It's probably not that significantly different.

Selling commission should be about 6% in your market or $12000 on 200k. Also check that the ARV is really 200k in that neighborhood. May or may not be better off spending $30k on rehab if possible and selling for 170-180. Check how long other properties take to sell - days on market - and add holding costs for another 30-60 days after signing the sales contract to close the deal. Do you have any friends or family or savings to get the 10% down for less than 10%?

@Andrew Bolton - depending on the level of ongoing service you need, I've been really successful at hiring people off craigslist - gigs - skilled trade / labor for x amount of cash. I use that person again if I like them. I let them go quickly if I don't. 

Note - to get the most replies, show a picture of the job, a clear location and clear contact info. Clearly describe the job to be done in keywords people might search. Budget can be $10-20/hr plus materials.