All Forum Posts by: Ryan Pyle

I do 12 a year, average around $20,000 profit per deal including rehab, closing costs, interest, insurance, advertising, etc.

I've done 12 a year for the last 3 years, which is plenty to live on. My goal has been to double my volume, but I'm having a hard time finding good deals with a safe margin. People are paying too much for properties in my area right now.

For the guys doing more than 20 a year....wow! Are you doing rehabs, or wholesale flips? What kind of net margins? Impressive either way!

I sell my houses for $75k, which means a $575 PITI at today's rates. These houses would rent for $625/mo, but the rentals would not be nearly as nice. I advertise my FOR SALE houses in the FOR RENT section of the paper. Something like: "4br, beautiful remodel, new kitchen, new bath, new windows, new roof. $575/mo. My phone #". When people call I tell them that "I've had lots of interest in the house and am now looking to help someone own it. I can get you in for as little as $500 down (first time homebuyers' grant from the city) and payments around $575 depending on income and credit." 50% of the people say no thanks, 50% say okay. I then ask them to tell me about their income and credit. (The banks I work with need minimum 580 FICO and 40% back end ratio). That eliminates another 25%. The remaining 25% have a shot at qualifying so I show them the house. Remember, they were calling on a rental and are expecting to see a typical rental. They walk into my new rehab and fall in love. They are usually calling my mortgage guy before they leave the house. Now, here's where you need a patient mortgage guy because we've easily gone through 40 showings to get a buyer before. It's usually more like 10 - 15.

This works...my average fix-and-flip in 2008 was 110 days from purchase to sale. My most recent sale was last week. I've never used the MLS to sell and I ANSWER EVERY SINGLE PHONE CALL and SHOW THE HOUSE IMMEDIATELY. Realtors and most investors I know don't do that. If you hustle, you'll get a good product sold.

I used to market mine before they were finished but found that either 1)potential buyers couldn't see past the rubble or 2)if I did get it under contract the buyer then thought that they could come by every day and ask my contractors to "change this" or "fix that", as if I was building them a custom home. It became a nightmare.

Besides, all of my buyers have to go FHA now anyway, and I have to wait 90 days before I can get them under contract. So what's the rush?

Kel, 2 of my vacancies are Section 8 move-outs, 1 is an eviction, and the other 2 are normal move-outs. All moved out Dec 31. Just normal business-cycle stuff. I am selling 1 of them retail, the other 4 will be rented Section 8.

I would NOT recommend Section 8 in your situation. Wash Local is a great area and you shouild be able to get good, responsible tenants. The added annual repair costs from the LMHA inspections would not be worth it for you. I can go into excrutiating detail if you like. :)

In the areas where my properties are located, the tenant pickins' are slim and Section 8 is really the only way to go. I've tried renting non-Sec 8 in these areas and usually end up evicting or giving cash-for-keys.

I am very concerned about owning property long-term in Toledo. I stopped buying rentals in early 2007 and have been doing fix-and-flips since then. I've found a great niche and it has been going really well. I did 9 flips in 2008 and am shooting for 20 in 2009. Don't let the media fool you, there are plenty of buyers out there and there is plenty of financing available (FHA).

I'm not sure where Toledo is headed. If you want worse case scenario look at Bethlehem, PA or any other former steel town. Toledo doesn't have much other industry to fall back on. I'd be cautious.

Kel, I have a bunch of rentals in Toledo. Here's what I can tell you. 2 bedrooms take a LONG time to rent, but you generally get tenants that are less transient. It can take up to a month to find a good tenant for a 2 bedroom.

3 and 4 bedrooms are in much higher demand, but because they are bigger, repair and turnover costs are much higher.

2 bedrooms are VERY difficult to re-sell. 3 and 4 bedrooms, if they are nice, will sell easily even in this market. I know you are buying rentals, but you may want to (or have to) to sell in the future and you want a property that you will be able to move.

I've got a bunch of rentals in Toledo ( I live here also). My typical vacancy rate is 3%, but right now I am at 13% (across 38 properties). But, the same was true for this time last year. Around the holidays is tough...you just have to have cash reserves to deal with it.

I can answer your question better if I know where your rentals are and where you are looking to buy. Mine are on the North End and as such are mostly Suction 8.

1. Double my volume of fix-and-flips. I did 9 in 2008...looking to do 20 in 2009.

2. Get rid of all of my slow-paying tenants and re-rent to better-screened, paying tenants.

3. Eliminate the need for hard moneylenders. Stretch goal is to eliminate need for private money also and just self-fund. That would require that I triple my 2008 fix-and-flip volume.

4. Have at least 2 of every kind of vendor- plumbers, HVAC, GC, mortgage lender (to finance retail buyers), handyman, etc. I'm sick of relying on 1 guy for each item...puts me at their mercy.

5. Pay down $100k of mortgage debt on my rentals.