All Forum Posts by: John Chan

Well I don't really know what kind of area these properties are located in. Find out the absorption rate of properties in that area and what they are selling for.

Also, what's the deferred maintenance on the the buildings? How much traffic does the storefront really bring? Just do as much research as possible before diving into anything.

I specialize in Cincinnati. Been here for 3 years so far. And you're right in terms of cash flow. There's amazing cash flow here. My first 3 fam I brought for 20k total including rehab was rented for $1,450 a month. I sold it for 3 times that the following year. I just picked up a 4 family last month for 40k total and it brings in almost $2k a month. Of course, these deals aren't everyday deals. I look mainly look for rentals that don't need too much work so I can get tenants quickly and can give me a 100% return if I'm paying cash in 2-2.5 years in decent areas. I assume that's probably non-existant in California, right?

How's the real estate market in your part of California? How there plenty of good rehab deals? I'm asking because I've been thinking of becoming a real estate agent there, and investing on the side. Any recommendations?

As far as relating to the topic of this post, I saved up money by working odd jobs starting in high school. Managed to save enough to buy my first 3 family foreclosure, which turned out to be a home run. Now I make money as a real estate agent, wholesaler, and landlord.

I guess that all depends on where you'd like to buy. I just picked up a 4 family near the zoo last month for 27k, put 13k into it which included 2 new boilers, and now it's rented out for $1,900 a month. It's in great condition. Around here for $40k, you can easily buy a 20-30k single family foreclosure that brings in $600-700 a month.

Brad,
What part of town was your multi-flip?

I've flipped multi's before in Cincinnati and sold them to a FHA owner-occ. The tenants were more than co-operative since it states in my lease that as long as I give them 24 hours notice it's okay. I did have to reassure them that they will not have to move, their lease will be honored.

I didn't know Section 8 could make you pay for utilities. I always make my tenants pay for all utilities. Only if I absolutely cannot rent out a unit will I go Sec 8.

I think we're missing a vital piece of information: where is this property located? is this located in a war zone? Is there a mixture of SFRs and Multi's on the same street?

It should be in a fairly decent area since you mentioned the price is around 100k. Also, if you're thinking about selling it in the future, check the absorption rate of the area.

Are you still investing in the Cincinnati market?

I've been looking at the local small banks around the area and their prices on their REOs just seem overpriced to me compared to other deals out there. Are the bulk deals you're buying from this bank SIGNIFICANTLY discounted from their individual asking prices? Thanks in advance.

Ed,

When you say 10% cap rate, is that referring to today's prices or the previous prices?

10% cap is good, but not great, especially when dealing with higher risk properties such as condos.

I'm not really sure what money you're trying to save on. You pay nothing to a Realtor to buy a house. The bank pays the Realtor for selling it. Besides, a cash transaction of that size should only cost you a few hundred dollars in closing costs total, including a owner's title policy.

If you're thinking of dealing directly with the bank so that they save money because they're not paying a Realtor, try to understand that banks rarely have the time to deal with individuals on single properties. It's usually just asset managers that assign a large number of properties to agents.