All Forum Posts by: Matthew Newman

@James You thanks for the insight.  That's just it though.  We've hung on here for as long as we can.  Been here since 2010.  We're planning to start with the kids here in the next 12 months and this apartment just isn't conducive to having a family.  

How much would you say a property needs to cashflow monthly in order for you to hold on to it?

My wife and I are first time home buyers in Los Angeles.  We got married in July and we are looking to start a family in the next year.  We are currently in Studio City paying only $1,400/month rent for our 1br apt and need more space. We have 5% to put down and have been preapproved for $570,000.  We really do not want to spend more than $525,000 on a property, but the problem is that there is no Single Family homes in the area that we like in that price range, so we were considering renting.  The problem is that the rental market is not very forgiving either.  We were looking at rents of 2600 and up for our needs

We made an offer on a 2br 2.5ba town home for $325,000 5% down. Including PMI, Taxes and home insurance, our monthly nut would be around $2,450. The rents in the area are going for $2,500 and has been a good rental property for the sellers. We made the offer so that we could get into the market and not "throw money away" on renting. We only plan on staying here for at most 2 to 3 years.

Here are my questions:

Am I off base to think that this could be a great potential investment property that i could hold onto when we eventually move on to a nicer home? 

Does this property cashflow well enough at $2,500/month that we should rent it out now and stay in our current apartment where we could save even more money for the next house?  

Would holding onto this place when we move hurt us in applying for our next loan?

Is there any advice you could offer for a good 1 to 5 year plan?

I appreciate you taking the time to read this.  thanks

Thanks Kaz

Tracy Royce I will do that. I was already thinking that, i just didnt know if you were allowed to market a property before I had it under contract.

J Scott it is really tough to say. The house is a 2 br and 2bt horse property that needs repair on over 40 acres of land and the property next door is 4br 4 bt beautiful home on same size property sold for $1.7mil november of 2011. There are no other properties in the area that are even 1/10th the lot size.

If the owner still will only go as low as $600k what would the appraisal have to be to make this a good deal?

thanks for your reply guys. Im freaking out a little bit because it is my first deal and I feel that I have a tremendous opportunity. The owner really wants to get out of California and wants to sell ASAP.

He has an appraisal that he sent to me that is was done on 7/4/2011 that says the property is worth $1.4million. He is willing to part with the property for $600k if that is what it takes to sell fast.

The appraisal looks very legit but it was taken a year and a half ago. I cannot imagine property values have dropped much lower than that currently. Do you think I would have a problem selling this property?

Is it worth just rying to lock up a property under contract and see if I can make money off of it? I have a good feeling that I could but just a little skeptical.

Can I use the same type of contract when signing with my end buyer? or do I need to switch it up the contract when I sell the property?

Also, do I now need to take the signed contract to the escrow company? or do I wait until I have the second contract in place?

Thanks.

Best regards,

Matt

Seller says that he had his house appraises last year for $1.4 million. He is asking $1.2million. The house is 2 bed 2 bath 2,000 sq ft. THe lot however is over 40 acres in a nice area however it is zoned currently as a single family residence. He says that with enough funds and a little pull that one could get that zoning changed. It currently is a horse property

I looked up comps on the house, but it is a little bit difficult to figure out. There are no houses in the area that are really similar to the one im dealing with. There is a house in the area that have the same square footage that went for 470k in the but the lot size is only 20,000 sq ft. There is another 3 br 2 bt that sold for 730k but the lot size is 69,000sq ft. A 4 br 3bath on a 12,000 sq ft lot went for 723k. Finally a 4 br 3 bath on a 90,000 sq ft lot went for 915k.

Like I said before the house is not too great, but the property is well over 4 times the size of anything that has comps. The closest is the neighboring property that went for over 1.5million at the end of 2011. That was a 4br 4 bath on a similar size acreage.

As a wholesaler, what number do you think that I should be going in there with to make the deal work? Based on the comps I provided, what do you think the property is worth?

I am looking for an investor friendly RE Attorney in the Los Angeles area to help me construct and go over documents for Wholesaling and Lease Options.

Are there any out there you recommend? How much should I be expecting to spend?

Chris Martin still, thank you for your input