All Forum Posts by: Scott Nipp

Hey Brian.  Please add me to your list.  We are definitely interested in getting into some deals both on the flips and the rentals sides of things.  Just let me know when you have a chance to discuss this further.  

We are typically focused on the NW side of Tarrant Co, but we are open to good opportunities down south also.

Looks pretty nice.  Any update on it selling or offers as of yet?  Just curious.

Congrats on the flip.  The pics look great.  How long have you had it listed?  Any takers so far?  Curious to see what your end net profit on this project is.

I think you might be hard pressed to find a conventional 5% without a occupancy requirement.  I'm not sure on that, but generally I think that conventional for non-occupant owners is going to be more like 20% or more.

@Adam Gresch  Owner financing really doesn't have a set of "standard" rates, fees, and down payment requirements.  This is completely a deal between you and the owner at whatever terms you can negotiate.  Obviously this negotiation is going to depend greatly upon the position of the owner.  Is the owner distressed and motivated?  Is the owner looking for cashflow or a bigger payment up front?  There are a ton of possible scenarios that will greatly impact the negotiations.

I suppose that a good starting point for you as a buyer of an owner financed deal would be maybe 5% down and 2% over the going mortgage rate or the existing mortgage rate if it's not free and clear.  This would give you some negotiating room and unless they have the property priced way under market I personally probably wouldn't go much over 10% down and 4% over current rates.  Of course this really comes back to the price of the property, condition of the property, local market, what your exit strategy from the property is, and a whole host of other questions.

Not sure if this helps much, but remember that this is a deal between you and the seller.  You can get what you can negotiate.  The better you are at negotiating, the better terms you are likely to get.

Once I have a property to sell it will definitely be Craigslist and signs.  You could also try a classified, and some areas have local online classifieds you could try that also.

@Gustavo AL  I didn't completely run the numbers I just went with the numbers that @Account Closed came up with and removed his duplication of taxes and insurance.  This pegs that cashflow around the $600/month point.  If you then don't account for PM (I wouldn't recommend this by the way) then you can add in another $240/month and get up around $850/month which is pretty close to what you are figuring.

If your numbers are all accurate and not "guestimates", and your rehab truly is just minor touch-up, then this looks like a great deal.  I would LOVE to find a duplex in my market that would cashflow at $600/mo or more.  I would take that any day of the week.

I would recommend your next step is to lock down exact numbers on everything (taxes, Insurance, etc). Make sure you don't have any other unforeseen expenses like annual landlord registration fees, HOA fees, etc. Have you verified that the tenant pays all utilities? Be sure of that or your cashflow is probably pretty much gone.

Good luck with it.

This might be a great house for you and your family to live in, but as @Evan Manship pointed out this is not looking to be a great rental prospect with the current rental market in your area. Once you factor in CapEx, maintenance and vacancy you have no monthly cashflow on this as a rental.

@Jesse Waters  has a great idea on the house hacking side.  Depending on your personal preferences this could be a great way to go.  It does offer some great advantages that Jesse pointed out.

Good luck with whatever you decide.

Well... You also have missed holding anything back for CapEx and property management. I think most people generally use 5% as a guide for maintenance, vacancy, and CapEx each and then another 8-10% for property management. These additional expenses are going to pretty much wipe out any monthly cashflow that you might have achieved.

Monthly expenses     $710

Maintenance                $48

Vacancy                       $48

CapEx $48

Prop Management       $76

New Monthly Exp      $930

So personally, I would think that this doesn't make a good rental option with the other numbers that you have provided.  Now, the rub here is how much of that $10k is closing costs and how much is rehab?  The reason I say this is that you might be able to reduce the closing costs with a creative financing option like "Sub To" or owner finance if this is possible.  The other thing is concerning how much rehab you are doing and is this absolutely necessary to command the $950 rent or does this maybe put you at a level above the other rents in the area?

Unfortunately, even if you can eliminate the closing costs and rehab budget, AND you self manage and choose not to factor this in (not recommended), this is about the only way I see you getting this to a decent cashflow of close to $200/mo.  Of course the likelihood of being able to completely eliminate the rehab and closing costs is probably close to zero, and that puts your cashflow with self management and not factoring that cost in (again, not recommended) only about $100/mo so this really doesn't strike me as a good rental property option.

I would take the $13k and call it a day.  The only other possible option on this for me would be to owner finance it out to a buyer if you can make those numbers work, but that might be just as tight or worse than the rental option.

This looks a lot better to me since I think @Account Closed is double counting the taxes and insurance. I believe you have aleady included the tax/ins in with the mortgage which makes you monthly cashflow more like $600/mo which makes your COC mch better.