All Forum Posts by: Michael A.

@Maurice Blackledge congratulations! Those numbers look good to me too.

When fixing up an almost turnkey property, how important is it to you that the contractor is licensed AND insured? Let’s say the work is limited to someone installing a new electrical outlet - something simple and quick like that.

@Gaby Liu My closing costs on a loan in my market are about $3,800, but once 6 months of taxes are added to that I’m right about where you are. Banks need to get paid. This is simply the cost of doing business.

Thanks for the advice everyone - I was able to use a generic pre approval and had my offer accepted. Really appreciate everyone's opinion - the overwhelming consensus was to go with the generic letter, so I'll be taking that approach going forward. 

@Annie Witkamp I agree with @Justin Pierce that the market is very hot. There were several properties I was looking at recently that were in the process of being gutted when the investor decided to sell. So it is entirely possible for you to sell the property while in disarray! 

Curious to know what everyone’s approach to this is.

Do you get a pre approval letter specifically written for the property on which you’re submitting an offer?

Places are selling so quickly that I am often times not even able to get my offer in because my lender can’t generate specific pre approval letters for the offer price fast enough. No fault of theirs; the market is just moving unreasonably fast where I am right now.

What’s tour strategy?

@Marcus Auerbach I appreciate this valuable insight Marcus! You’ve helped me tweak my perspective going forward.

@Seth Matherne That actually sounds like a great post to make. I’d be curious what people who specifically rent to university students have to go through. A friend of mine has a few properties that have been exclusively rented by sororities for many years, but he hasn’t had many issues. Every big town has a college, so the info might be relevant to more people than you think.

@Melba Chambers @Sardar Mustafa Khan I wanted to start investing about 4 years ago and quickly realized that I didn’t have anywhere near enough money for it to make sense. Now that my savings and cash to invest in real estate are at comfortable levels I am actively trying to find my first local buy and hold. As they say, cash is king.

@Kelsey McCabe Excellent question. Please forgive me if you already know everything in about to say - just jumping into your question without knowing how much property you already own.

I tend to look at cash-on-cash ROI when analyzing a deal the most.

If a property looks like it will return at least between 10-12% when I analyze it I will make an offer.

All you need to do is look at the actual amount of cash the property will leave you with at the end of the year after all of your bills are paid, and divide that by every actual dollar you’ll need in order to invest in something (and I mean everything - closing costs, repairs in order to get it rent ready, down payment, home inspection, etc.).

A fast way to gut check a property is to see if it will rent for 1% of the purchase price (though some people in better markets will look for 2%).

Hope that helps unless I haven’t told you anything you don’t already know!