All Forum Posts by: Patrick Noel

Simple Quick Formula 

ARV

-General of Misc Holding Costs (Holding, Loan, Carrying and Sales Costs = about 10% of ARV)

-Desired Profit (XXX % of ARV)

-Rehab

_______________

Purchase Price for Offer

What I typically do is first see if it's actually a "deal". I calculate the ARV based on the comps that match the indicated property (Bed/Bad and Square Foot). I look to see what works needs to be done...Kitchen, Bathroom upgrades, etc and Closing Costs (I typically use 6%, to take into account Closing and Agent Commissions). If the deal is positive and meet my return parameters, then I would pursue further.

What type of cash flow are you seeking? With a mortgage on the property, the cash flow will be be even more limited in addition to maintenance, insurance and taxes. Miami is especially hot right now. Have you considered Broward at all? Fort Lauderdale is a particularly good area, but at the end of the day, it's simply finding the "deal" that works for you. 

The longer it sits on the market, the more "motivated" he will become to sell if he would like to pursue the Florida Market. I wouldn't say the duplex can sell quickly since, he still hasn't sold it. Based on your calcs what do you value the property at? I agree with everyone's standpoint as well...at rents annually of about $36k and purchasing at $375k it is not a good deal, because you barely have any cushion for risk, and if you have a loan, you will be negative cash flowing. If he doesn't budge still, you should probably walk away, as it is not worth it. 

www.meetup.com is a good source to find all upcoming REIA Meetings in your area

How did you propose the Seller financing? If you are able to put say 20%-30% down, and pay him 5-8% Interest, that could be a much stronger and persuasive offer, especially since he is "tied" up. You can further ask to include a balloon after one year, to try to further motivate him.  Since its been on the market for a while, it could be overpriced, so you may have to run the numbers and try to negotiate the amount down. If that doesn't work, it may not be in your interest to pursue it, as it won't work in your favor if you acquire it. The deal comes from the purchasing price you can attain. Since he doesn't have a mortgage, he can easily get a line of credit on the home to finance his future pursuits. 

You can find a good amount of wholesalers through this site and attendance of REIA meetings. There are alot of great areas in Florida to invest in, I primarily seek properties in Broward County. I also do research on the market changes, like Hallandale for example is experiencing high redevelopment from the city. Miami Beach is so overpriced and hot right now through foreign money, that investors are seeking alternatives.

If you find a great deal, you can assign yourself a one-time acquisition fee for finding and putting together the deal together, usually 1-3% of the final price. In a partnership, you also need to address how expenses will be handled in the event the cash flow from the property is not sufficient to cover it...will that amount also be split 50/50? 

Hey @Justin Cabral All the best on finding a deal! Right now Tampa is looking like a really good area as it is becoming somewhat of a startup hub , so I imagine, good opportunities and Port St. Lucie is ranked 9th regarding job growth.

I met my mentor/investor partner through a REIA meeting.