All Forum Posts by: Paul Kouri

Saul,

Excellent point. I will include this on my list of items to research prior to taking advantage of the barter. 

Sincerely,

Paul

 My MArch is from U of M. I worked at Hobbs and Black during grad school. 

Where in Michigan are you based?

Sincerely,

Paul

I would love your opinion of what I believe may be my unique "unfair advantage" and a proposition I made to a client.

THE FACTS:

. I am an architect

. I have access to financing (excellent credit, good debt-to-income, and ample liquidity in IRA's)

. I do NOT have much cash for a 20%-25% down payment (due to a significant renovation of our primary residence for ourselves)

THE BOTTOM LINE:

. To acquire more SFR rentals, I seek cash.

THE PITCH:

I am doing an architectural side project for a local developer. In lieu of direct payment for my service (roughly 15 hours of work, $1,000 fee), I asked for a private loan to use for a downpayment on a SFR in order to buy, rehab and rent/hold.

He agreed to loan me up to $12K for up to 1 year with a return, lump sum payment of $13K.

Do you think this is a good deal?

For two additional sources of cash, 1) I seek to ask for the same $12K loan from another developer I know personally in exchange for architectural service and 2) I am considering taking $5,500 from my Roth IRA.

The strategy is that after the purchase, rehab and refinance, I pay back the two $12K loans with $26K and open a Roth for my wife for the $5,500 maximum contribution and have a new rental with positive cashflow.

The only missing piece is finding the property at the right price for the numbers to work.

I greatly appreciate your thoughts. 

Sincerely,

Paul

Thank you thank you. Where in Illinois are you located?

Jay,

Western suburbs are more realistic for me to help you. The codes will be closer to downstate as opposed to the City proper (in the City, it may be best to have an architect IN the City as they have their own code). 

I have friends and family in the suburbs as well who could help navigate the landscape of "what's hot" or the "next hot area"...if you need that help. I also travel to the City and west and north suburbs. 

When the twinkle becomes a spark, let me know and we can see how things might click. 

Sincerely,

Paul

Hello Jay,

Thank you for the message. Are you looking in Chicago proper or the suburbs/collar counties? I may be able to help or have many contacts in Chicago who could help. 

I'm located in Peoria, 2.25 hours south of the Chicago Loop. 

Sincerely,

Paul

James,

Thank you the positive comment. Maybe I should have LED my intro with the pitch to trade ideas/info! if architect truly are in short supply on BP, maybe that is an opportunity for my niche in blogs/forums. 

If you would like a design/layout/structure opinion sometime, please do not hesitate to contact me. Among other things, I can communicate very effectively with a photo sent to me that I can sketch over or photo shop in order to either give an owner/contractor ideas for fixes/improvements or to provide an image useful for marketing what a place will look like after construction is complete. 

You have quite a bit of experience in the RE arena. If you would be willing to review a Brief of my business plan, I would greatly appreciate your feedback to learn if you believe it is a reasonable approach and if you have suggestions. As you have pointed out, I don't expect an investment of your time for nothing in return...so please keep me in mind if you see an opportunity to use my service. 

Sincerely,

Paul

I have been renting out a single-family (3 bedroom, 1.75 baths, 1200 sf) home for 3.5 years now. I had 1 month of vacancy. 

I originally purchased the property as my primary residence, lived in it for 5 years then bought another home down the street and kept the original as a rental. While living there I gutted the kitchen and bath, installed hardwood and replaced the roof. 

I see two ways to calculate my investment:1) Historical approach - the amount of the original downpayment plus renovation costs and 2) Present status - the value/equity that is tied up, but would reap if I sold it. 

Will you help explain how you would look at this property? I believe by doing so I will learn a few things that I may use when analyzing new deals.

Here are the numbers:

Purchase price $85,000

Downpayment $17,000

Improvements $26,000

Current monthly escrow $665 ($150 is principal)

Current monthly rent     $1,100

Utilities by tenant

Assumed sales price $120,000

Current mortgage        $83,000 (I re-financed at 3.5%, 30-year fixed to pay off my school loan a few years ago)

I've been using the latter version for how much annual profit I make on my investment, as follows:

$120,000-$83,000=$37,000 (in my mind I have $37,000 locked up in the property currently, ignoring sales fees)

Annual net income=12 X ($1,100-$665) = $5,220 

My return on investment = $5,220 / $37,000 = 14.10%

Any thoughts on this?

Also, what is your opinion...is this a decent, long-term (not looking to get filthy rich) property or should I look for better than this?

Sincerely,

Paul

Michael,

I live in Metamora, which is where my rental is as well. 

Coincidently, I spoke with Jason Mayhew for the first time today; he initially contacted me via a post I have on Craig's List seeking RE investors. Jason spoke very highly of you and suggested the three of us meet. 

I mentioned to Jason that I have spoken with some RE investor friends about starting an RE club and he mentioned you host one in Morton - I would love to join you guys.  Unless you already have an architect in your group, I believe I can bring another point of view to the table. 

Thanks for replying to my post. I hope to hear from you soon. 

Sincerely,

Paul