All Forum Posts by: Don Daniels

So I have to share this deal I just did with you... Conservative estimates before receiving a bid from a contractor, inspection report or appraisal:

• $16k cash out of pocket
• $80k purchase price
• $160k ARV
• $45k rehab (Houston flood house)
• 30% cash on cash return ($415/mo net cash flow) 
  
• 159% return on equity ($26k equity)

My contractor went out and estimated $50k, which means my cash out of pocket goes up ~$5k, but i'm still pretty happy with the numbers.  Inspection comes back with a few minor items I hadn't considered. I worked with my contractor to fit the items in, keeping the total at $50k.

My lender calls me, telling me he has some good news. The hard money appraisal comes back $18k above my ARV! My new numbers are as follows:

• $2.2k cash out of pocket
• $80k purchase price
• $178k ARV
• $50k rehab (Houston flood house)
• 226% cash on cash return ($415/mo net cash flow)
• 1,772% return on equity ($39k equity)

I previously wrote a check for $2.5k earnest money, so at closing I received cash back of $250. My single-year ROI is nearly 2000%!! I'm tempted to cut my rehab by $2.2k or more so I can claim an infinite return or that I got paid to take the house :) All I can say is real estate is awesome.

Thanks Tom Gimer had that in mind, as I posted. Wondering if that was the case

Hey Guys, I currently have four rentals acquired over the past year. Thinking about stepping up my game. What is the best way to make use of private money, with regards to SFR? Thinking I could guarantee at 10% annual return to my private money sources. Let’s say it’s $25k down in total, they might provide $20k for a $2k annual return to them. No lean, no title, they are not the lender, they just make a return on their initial investment. My rentals typically net $500/mo. If I add my $5& to their $20k and make $4k per year net, that’s 80% on my money. I’ll take care of management, repairs, etc. if/when I sell, they get the $20k back. Thoughts? Have a better win win proposition?

Hey guys, I was caught out of town a couple times, needing to pay a handyman for urgent service and didn’t have an efficient solution in hand. What services do you use to make same day payments? Furthermore, how many handymen do you have on retainer to ensure you can cover urgent items?

Consider finding a deal that has cash flow now so that you are not waiting 20 years for it! On the surface, it may seam that you are gaining an asset for free, but you need to consider risk and the opportunity cost of missing out on an asset that can help increase your net worth and cash flow now. Since you are looking at 20 year time frame, consider the value of just $100/mo cash flow over 20 years. That generates $24k... probably enough to put a down payment on another property. Now multiply by 3-5 to see the value of $300-500/ cash flow on just one property. Now consider multiple properties. Run some numbers and you start to understand the time value of current year cash flow. You’ll see that delaying just ONE year has a significant impact on future cash flow. Consider the impact of tying up your cash for 20 years! This property may cost you significantly more than it could earn you.

Ive used cozy.co for nearly a year and have been very happy with the service

It will cost more than you think. Have reserves!

Move on or she needs to provide the info. She either has a significant criminal, credit history issue, is just highly irresponsible, entitled, or confused and will give you no end of issues. Here’s how I look at it: if you were applying for a house or a job, would you even think of submitting a blank application? What would that say about your character? You’ll get yourself in trouble when you compromise your criteria. If you don’t have many applicants, you may need to adjust your price or improve the appeal of the house

You have little leverage, and it’s small dollars. I would just pay it and consider it cost of education. If it was more expensive, and you believe they falsified Information that might be a different sorry

Slow or no response to your calls, text, emails is usually a red flag. I have worked with many contractors and find that their initial style is a guide post for their interactions with you during construction. Nothing more frustrating than chasing your contractor to do their job or at least get you a status or ETA. Please do yourself a favor and move on. Too easy to convince yourself that there isn’t anyone else available and that you “need to make it work.” When you start running numbers on your holding costs and time, you’ll find you’re better off with someone who may be more expensive, yet responsive, ethical, hardworking, etc... Also, don’t worry about giving your contractor part of a job, just be forthright. If it’s a matter of price, just ask if they’ll beat your other quote, and be clear on the scope of work so you’re comparing apples to apples. Some contractors can handle rehabs, others can’t. Some prefer handyman work, some only want full construction jobs. Remember, there are a lot of contractors out there. It doesn’t hurt to test them on small jobs. Do yourself a favor and fire the bad ones quickly!!!!