All Forum Posts by: Ronnie Galindo

BP, 

I have started my venture into Out of State investing and need to consult with a CPA as well as have one ready for next tax season. I have reached out to one already but am not getting the responsiveness I would like to see in a CPA. Could anyone recommend someone they work with and know to be great?! 

If you are a CPA, just know I own a home in CA, am investing in Houston, TX and my investing is just starting with my first flip. Eventually I want to do buy and hold, acquiring 2-4 homes per year and starting with SFR or small multi.

Thank you all! 

@Account Closed partially. The numbers for me have to work for me to push forward with a deal. This does not mean that you "make" the numbers work. They either work or they don't. It is a sellers market for sure BUT there are deals everywhere and thus, you have to do your due diligence or else you will make a mistake and lose money. If you have calculated in all the costs (I would use the bigger pockets calculators if you haven't already) and if it makes sense to you and you are ok with it all then go for it! I would also have an HVAC guy come to the table and give you a quote so I know what I am looking at (I like to have all the information). Here in CA, I know a full system can be $8k+ for a SFR but replacing just the units and no ducting will save a lot. Just to replace the A/C unit though is roughly $2,500. So if you need to replace all HVAC, that could be a costly item.

All I am saying is just factor in everything and ensure you have the capital because as a landlord, you will be responsible for ensuring they have working HVAC (since it is present now).

@Account Closed I would be nervous of the money being left in the deal. This is not a BRRRR if you are leaving in the initial 25% in the deal. I am not too concerned for the HVAC (seeing as how mine here in CA has lasted 30+ years). but the loss of your capital (the 25%) is hard for me to get by. With a BRRRR, the main goal is to leave as little as possible in the deal. Also, with cashflow only being $423, that is only just over $100 per door. I would work towards at a minimum $200 a door, unless you are seeing a crazy appreciation rate and that is your overall goal. I would be happy to speak more about this if you would like. Good luck!

@Niti Bhat, It all depends on what your end goal is? I see that you bought it all with cash, do you have more reserves to keep buying properties or did you liquidate all your cash reserves? You say it rents for $975 with a minus $100 for the HOA, how much of that $875 is being saved for vacancy, maintenance, capital exp? Do you pay a property manager? There are several questions that would need to be answered first before we can say if it is good or not.

In my opinion, you should be saving at least 5% for vacancy, 5% for maintenance, 7% for cap ex (if none of the big items have been replaced recently), plus minus the property management fee. Once all that is calculated, how much are you netting for your profit? Lastly appreciation. You bought it for $132k, has it gone up? Stayed the same? Went lower in price? If you are not getting at a MINIMUM $100 profit after all the incidentals, then I would say sell and move your money into something else. Preferably into something that you don't have to sink all $132k into. Maybe use parts of that as down payments/rehabs for several houses and have mortgages on them where you rent them out and have someone else pay for them so you have several homes instead of 1 paid off. Just my 2 cents! Good luck!

Good morning BP Folks,

I am adventuring into the world of Real Estate through flipping (currently have my first one under contract). Now reading all the posts and books I have thus far, it is recommended to at least speak with a RE Lawyer as to ensure everything is above par and I have a contact in case I need some help in the legal field. With that said, does anyone have any first (or even hearsay) experience with a RE Lawyer? I currently live in CA but am looking for someone who is versed in Houston law (since that is where my flip is). Please send over your recommendations! 

Thank you all!

@Teri Feeney Styers Thank you, I will!

BP Community,

I just got into the flipping business (went under contract with my first one yesterday). I have heard I should have a lawyer ready in the event that anything goes sideways. Could anyone recommend one for the Houston area? I live in California (but will probably move to TX within the year). 

Thank you all in advance!

@Kenny Charles, I will start this off with I have NEVER done a subject to deal so I do not have first hand experience, but I have researched it and spoke with other investors about it. Some people believe they are amazing, while others believe they are just trouble. The hard part for me with this deal that you have is that you are paying $80k up front for a person to put you on the deed but keep their name on the mortgage. I believe this is way too high. Why not look at a hard money guy to come in, buy her out (she will get over double what she wants) then rehab it and then rent it at its full potential. I have heard of some people getting sued or being brought to court when people who have done these deals try to find how they can invalidate the deal or how they can paint the picture for the courts that you did something wrong. Its a lot of chance and hoping that she is a good person and will stick to her word. 

If you do decide to move forward, make sure you have a really good attorney review the contract and be ready for litigation. Most hard money people will loan up to 70% ARV so you are looking at $339,000 so if you offer her $300k and then have 39k for rehab then refinance and buy out the HM person then you will have a home that is fully rented and rehabbed along with no worries that someone takes you to court. My two cents..... Good luck and let us know how it goes!

BP community,

I have calculated out what appears to be a lucrative flip opportunity (will be my first one). My agent brought it to me and I have already had a bid from a general contractor on expanding it and rehabbing it. Everything looks good numbers wise but I need to get an approval letter so I can put in my offer. I only have contacts for hard money lenders in that area. Does anyone have a good broker in the TX area? I have reached out to a few and am waiting for replies but figured I should post on here to get some recommendations for a true and tested lender. I have $20k to put down along with money to pay any closing costs and the rehab costs so I don't need hard money (and frankly don't want to pay the interest on those), hence why I am looking at conventional. 

I have attached the report I did on the flip calculator (if anyone wants to check it out and see if I am missing something [this rookie would appreciate it]). Thank you all!

-Ronnie

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Thank you @Mike Bolen for the advice. I will call Susan back and see what she is willing to sell the property for.