All Forum Posts by: Paul S.

Thanks, Chris.

I should've mentioned I used rentometer - it's showing between 680-700/month. I'm not planning any rehab so not sure why ARV would be relevant. The selling market doesn't seem to be too strong in this neighborhood; this one has been listed for 60 days and other similar properties have been on the market a while.

Craigslist rents validate my range of rent assumptions between 600-700.

It sounds like the general consensus is this is not a home run deal at this price due to likely roof and HVAC costs.

Any more feedback from others would be greatly appreciated!

Thanks, Joe.

I mentioned in my comment to Wil above that my broker estimated rents at 650-700 so closer to the top end of the range. I've called a couple current and former landlords in the neighborhood to get an idea of what their properties rent/rented for, but one didn't remember and the other didn't answer.

I assume 10% for PM and included that in my expenses to get to my FCF.

I didn't use Zestimate - I used actual sold comps as close as I could get to the area with similar sq ft (<1000)

Thanks, Wil – the more feedback the better. I am a little surprised that it seems like I haven’t done sufficient analysis. I’ve analyzed probably 25 deals or so. Can you help me understand where my analysis is insufficient? It would be very helpful! Below are the models I’ve used (confirmed insurance and taxes with insurance quote and auditor website) at the low and high end of rents. Local broker estimated rents for home would be 650-700 but I want to be conservative.

Thanks for the comments, Joe. I appreciate the candid comments!

1) The range of cash flow is given because I can't confirm what I'll be able to rent this for. The expected floor of market rents is would give $70/month in FCF and the ceiling would provide $150/month in FCF.

2) Again, those numbers exclude the amount I'm paying myself for PM, but point granted.

4) Thanks for this - is this because at my cash flow projections I would wipe out 1-2 years of FCF + Capex reserves?

5) The analysis is based on Zillow recently sold searches for 2/1 and evaluation of county auditor sales in past 5 years of 2/1's in the neighborhood.

First deal to get my feet wet in REI but have quick question.

In contract with a property that I expect will cash flow $70-150/month (10% vacancy, 10% PM, $100/mo comb. capex/RM); cash return of 7-13%, excluding what I'd pay myself to self-manage.

2/1, rentable condition, listed at 52, offered 32, in contract at 41.5. 

Feels like a good deal (nice lower income neighborhood, bike paths, parks, 10 minutes from personal residence ) but the AC and roof may not have too much life left.

Based on my analysis, I think the FMV for a 2/1 like this is closer to 35k.

Inspection in a couple days - planning on asking for $3-5k back at closing to a) mitigate risk of roof/hvac replacement and b) bring purchase price closer to FMV.

Is a deal like this worth walking away from if I don't get a concession post-inspection?

Hello,

There's an REO property in my neighborhood (all built around 1990) that was purchased by the bank for $88k and Zillow estimates it will sell for $95k. Comps in the neighborhood with the same floorplan have sold for $140k-150k. The house appears to be in pretty good shape. I'd bet I would need to put in between $10k-20k at the most and would take me 9 months - 1 year in my spare time.

My idea is to rent out my current home (only a few houses down) for $1600-$1700/month (another home slightly bigger than mine in the neighborhood lists their rent for $1800/month). Running it through the SFH excel spreadsheet I found on here, I would be just slightly less than break-even for the year taking into account potential maintenance, vacancy, etc. But I would be gaining equity in my current home while using my day job to service a lower mortgage on the REO property while I fix it up to either sell or rent.

I'm sure I'm wearing rose-colored glasses right now but it seems like a decent way to build equity in my current home (which we had $50k renovations done in 2012 when we purchased) while getting another property ready to sell or rent. I would appreciate other considerations I should be thinking about while my agent looks into the status of the foreclosure and I get more into the details of this idea. 

This would be my first entrance into REI and I'm very excited but want to make sure I cover as many bases as possible.

Thank you!