All Forum Posts by: Robert E.

 That's a great point, John. Thank you for the input!

Good morning and happy Saturday, Bigger Pockets gang!

I am still learning, and running test properties through the calculator, developing my business plan, and practicing my pitch for when I found my first potential rental property... Which I think may have fallen in my lap.  Story time...

My parents moved down after they retired, and moved into a townhouse just north of Walt Disney World.  It's a 3/2.5, ~1800 square feet, built in 2011, kept in pristine condition. We bought it when it was built, and I lived there after college (Dad and i installed crown molding, shadow-boxes on the walls, painted, installed overhead storage in the garage, brand new high-end appliances this year, etc).  I moved out and bought a new place with my wife early this year.  We were all under the impression this would be their forever home.  Turns out, they don't like stairs, so they are buying a new build just down the road. 

The HOA takes care of any exterior maintenance like roofing, for example, among several other things (basic cable/internet, water, landscaping, gate, pool, gym, clubhouse, etc). But, this takes up quite a bit of space in the Expense column ($330). With all of that being said, the rental property calculator factors in Repairs and CapEx (including many other entries). As it's a townhome, and the HOA covers most big-ticket items except water heater and air conditioning, would it be necessary to still budget out $100-$150 for both repairs and capex each month?

I've reached out to a few rental agents who have confirmed their rent price includes the HOA. Rent's going anywhere between $1900 to $2050, according to Zillow.com. According to the calculators on the site, this destroys my cash flow. The only way to get it to where i want it ($200 cash flow, with 8% COCROI), is if I lower the budgeted funds on Repairs or CapEx.

I don't want to pass up this opportunity, since the property is so close to Disney, and these places rent out and re-sell EXTREMELY easily, but I may not achieve the amount of cash flow that I want/need to secure investors.  I'd need about $50,000 down, and I only have about a quarter of that of my own.  

I'm sure there are some creative financing strategies.  I was thinking maybe they cash-out refinance the property, leaving 20% equity, pull out the funds so they can use that to buy the new house, and then re-assign the mortgage and title of property to me.  That way, they still get plenty of money, they don't need to pay full listing commission for a Realtor, and my wife and I get the townhome as a rental without needing to secure other sources of funds.   Not sure how viable that is, but just wanted to throw it out there for consideration.

At any rate, thank you so much for sticking with me thus far.  If you've read my entire novel, you deserve a high five!!

Thanks so much,

Robert

That's a great point, Aaron!  When i was researching different brokerages, my RE teacher gave me some advice:  they aren't interviewing you, YOU are interviewing THEM!  

Yeah, family and friends would be my first stop for that first deal.  Thanks @David Zheng!

@Marcus Johnson No worries, I figured the side-biz would be in addition to the job I have now.  That's a solid idea.  Doing projects for customers on my days off and in the mornings when I close.  That's great, Marcus, thank you!

@Marcus Johnson If I could do 80-100 hours per week at my job and rake in that overtime, I would do that in a heartbeat, but we don't have that option in my department.  We are able to pick up hours in other areas, which I do on a regular basis.  I've started doing side gigs like Uber, Amazon Flex, etc, to make up the difference in paid hours.  My coffers are going filling slowly but surely.

@David Lilley Those are some great ideas, too, David.  Thank you so much for your insight!

Okay great, thank you @JD Martin and @Bryan Hancock!  Good to know crowdfunding wouldn't be a viable solution. 

Jd, you bring up a great point.  With the RE license, I'm thinking a way to create value is: Bring deals to the investor, but a stipulation that I put my commission toward rehab or reserve instead of pocketing it.  Would something like that bring value to the table?

Thanks for your input, gentlemen!