All Forum Posts by: Rodney Sums

Perhaps they made improvements in which case they won't gain 100k. Is it in the same condition as when they bought it a year ago?  And that's the asking price, they may not get it.  But if they bought it a year ago, sat on it and stand to gain 100k a year later that's good coin for them.

@Ruben E Sanchez

I'd like to share an experience I had with a property similar to what you're aiming to make.  It may or may not apply to you and may or may not be an issue in your area.  Last year I was trying to buy a property that had a single family home with a duplex on the lot.  The big hurdle was how it would be appraised and treated by the bank.  The most economical way was going for me to finance it as my primary so I could live in one unit and rent remainder, then move out once terms of occupancy had been met so I could rent all units.  Since the duplex was on the same lot it wasn't going to be appraised as a duplex, rather as an addition of some sorts like a pool house. That was preventing it appraising to the price they were asking.  The alternative was to go commercial which of course required much more money down.  (15% for that lender).  

I don't know if I explained it clearly but basically, having the house and multifamily on the same lot made it more complicated and somewhat interfered with the potential of each.  Here's why:  Comparable single family houses in that same neighborhood were already selling for 250k plus WITHOUT a duplex on the lot.  This property was for sell for less than 250k.  Somebody ended up buying it with hard money.

  If you're planning on staying there forever, perhaps it's a non issue for you and the duplex you want to build will just help you live for cheap/free plus earn some income.

Did you say your addition is unpermitted?  I'd be concerned it gets noticed by an inspector when constructing the new property?  My understanding is they can find out about unpermitted additions and make you take them down.  

Can your lot be split so the new duplex is on a lot of its own?  would it be accessible without crossing the main house property (if not than maybe an easement if the lot can be split)

@Will Coleman Good job that has to be satisfying! 

Thanks for sharing numbers too! For those of us that are nosy, would you mind sharing the numbers that break down to the 400/mo cash flow?  That's pretty good for a 150K house right off bat!

If this house can be improved to be worth 100k more than sales price with 20k worth of rehab, I'm curious if a hard money loan would work to get you in the door. Once it's fixed up refinance with a conventional loan and not bother with FHA and their expenses.

@Kevin Melson not to pose as an expert, but here's my input. Another poster said 125k isn't a lot of money. I think it can be depending on what you're investing in and expecting but in the grand scheme of things, especially in trying to net 60k/year we would have a hard time getting there in 2 years with 125k cash. When I've done my own research in my area I see cap rates around 5-8%. Using a number like that it would take over $1M in property to get 60k/yr back in NOI...and mind you the NOI doesn't include the mortgage. I also think it'd be more challenging to get there that fast with single family houses. If you want long term passive income vs flipping, have you considered multi-family properties?

@Caleb Heimsoth I'm certain everyone understands suggestions will vary.  It would be disappointing if they didn't .   Performing such as search often brings up old threads, unrelated threads, or threads we read already.  So have some fun and offer a real suggestion based on the man's question :-)

For those of you who live or invest in the metro Phoenix area, you may be familiar with the loop 202 extension. I'm curious to hear how those of you who own properties near new freeways have had your property values affected, good and bad. I own a SFH in Laveen which, is going to be a mile east of where the extension will be. Personally, I'm happy about it as that area requires long surface street driving to get to the nearest major freeway. The area grew significantly over the past decade as it is. I'm certain those whose house will back to the freeway, may be be subject to the construction noise, or have the character of their home altered may take a hit, but curious how beneficial it is for those who have experienced a situation like this. Thanks!

@Scott Trench I read the book and it was great, solidified that I was making the right choices and provided insight to more things to consider.  It was among a few I had my son read so he would see my lectures were substantiated.  I was always curious to hear from Scott himself explain the part of the book where he suggests saving 25k then taking a year off to start a business for example...then get back to saving up to 100k.  If you get a chance Scott, would love some clarification on how it helps to set oneself back a years worth of savings to restart and get on track to 100k.

I'm near the same boat as this gentleman except I'd rather invest in multifamily.  Would be great to hear everyone's input

@Devon Carlock with six hundred K in equity they won't finance you?  You could buy one or more multi unit properties and have cash to spare with that much cash waiting for you