All Forum Posts by: Robert Godfrey

@Jonathan Green

1) Not flipping it, using hard money on a rehab so yes I'd like it to appraise higher when our rehab is done. This will be refi'd into a 30yr as an investment property to our LLC.

To give you more of an idea about the bedroom - it's a split level - when you go down into the lower level on the stairs, you can go right or left. So to the right is a bedroom (stair side) and on the right to the far side (across the hallway) is a full bath. If you turn left, it's the den/storage area with 3 walls. All we want to do is wall that area off as a new bedroom and add a closet. Since it's on the lower level and currently unfinished with cement floors, it doesn't count as taxable sq footage. So adding this bedroom isn't going to kill current sq footage and it wasn't being used as a gathering area, it was used for storage (which can still be the case with an extra bedroom). Do you still think it's not a good idea?

2) Thanks, totally agree.

3) Agreed

4) Yeah it's only a foot drop so not sure if we should just leave the patio or add a mini-deck to make it more attractive? Maybe expand/redo the concrete patio instead? Just kicking around ideas to really add value here that an appraiser would really like.

Some other things I thought of - 

a) Touch up some fading paint on the alum siding

b) Repaint the metal sheds (there are 2) in the backyard

c) Put a wooden fence in front of any front-facing chain link fencing to increase curb appeal

Thanks @Andrew Bang, the comps are there. Yeah for tile, these are smaller bathrooms so I may be able to get away with 1500 per bathroom with my tile guy and call it a day. 
When you say just replace the cabinets, are we talking standard newer home depot rental cabinets or go fancier? The current kitchen cabinets are older and wooden with a line going down each side (never seen this style before?), I'm on the fence whether to keep them because they're fully functional and I'm hearing there may be supply chain issues on fancier made to order cabinets. Above the cabinets, there is about a foot of wallpaper that we need to remove as well though if I went with newer taller cabinets I wouldn't even have to worry about that. The backsplash is a weird green tile that I'm planning to just tile over. Counter is standard vinyl, should I replace that? Flooring is standard linoleum, I'll probably replace that with tile. I'm starting to think that if I encounter supply chain issues (big if), it may be better to do paint at this point and rent it out immediately instead of going for higher ARV? This is considering we are already in a hot rental area where SFH Rentals like this one get snatched up in a week or less. What do you think?

Hi all, just got my first deal in an A+ neighborhood (and job market) and am brainstorming ways to maximize ARV on a rehab that actually doesn't need a lot of work outside of flooring/paint.

What repairs/modification have you guys found to be the best bang for your buck? Here's what I'm thinking so far:

1) Add a bedroom to a section of the house that has currently windows and 3 walls (was previously used as a den) - this should be a relatively simple upgrade, permitting isn't bad in our county.

2) Renovate bathrooms (2 full) - tiling, toilets, vanity.

3) There may be a way to add another half bath off an adjacent room to turn into a mini-master bedroom. 

4) Kitchen - upgrade counter, nice tile for flooring. 

5) Add a deck off the back walk-out basement double door (it's about a foot drop to step out to the back patio). This neighborhood doesn't have an HOA so I don't think a permit would be required and now that wood has gone back down this may be a good move?

Any other advice would be much appreciated!
 

@Ginger Brown Great advice when hiring a contractor to have some work done!

@Jay Chekansky Thanks for the reply on the insight into these properties, eg I never thought of going into a deal to use seller financing right off the bat but see why you would do that. Where do you find buyers who want to do seller financing, just in the bp forums/word of mouth or maybe advertise on craigslist/Facebook?

For property 3, that makes sense why you kept it and that CoC return is fantastic. Always like a happy ending on properties like this.

@Jay Chekansky thank you for this fantastic summary of your year of investments, awesome! A couple of questions if you don't mind:

For Property #1, what is the advantage of doing seller financing over just a long term hold on a rental that will cash flow? Is it so your money isn't locked up, or maybe you didn't like the area or just wanted to get rid of it because of the bad tenant?

For Property #3, out of curiosity what was the ARV?

Thanks for this insight Micheal, Jeannette, and Jesse they were very helpful. Miller, I used Trulia's data.

Here are my numbers: 9.84% CoC Roi, $170/door after 10% property management, 10% vacancy, 8% cap ex, 8% repairs (may be low since built in 1930) at a price I think I can get him down to. Loan would be at 5% interest over 30 years and 25% down. Though I'm wondering if I can even get financing in a higher crime area with only 25% down or should I estimate 30%?

This city is near military and multiple medical centers and comps show a decent amount of rentals. If I can get the financing, do you think it's a good move to purchase?

Any tips for investing in a high crime area? In this situation the crime becomes virtually non-existent after a 3 block radius and it's just that this duplex happens to be right in the middle of those 6 blocks. It's in pretty good shape and doesn't need repairs (according to the owner), the area doesn't have a problem with apartments getting rented according to comps, and the job market is great. It's just that this area isn't the best at the moment and the seller is asking 25% higher than the Zillow zestimate so it's been sitting for almost a year. Running my comps I think I can get 10%+ CoC Roi at even his high asking price. Should I offer 10-20% lower since it's been sitting for a long time and in a high crime area? Or should I just not even bother with the headache of a higher crime area? Thanks!

It allows you to essentially take money out of your house. Since it's a line of credit, interest won't be charged until you use it instead of a regular personal installment loan. I view them as a credit card secured by your house. 

Don't forget HOA fees up to a threshold (eg married joint making under 150k agi). This is a huge deduction for us since we just pass any increases down in rent and we get bigger deductions every time HOA goes up.