All Forum Posts by: Scott Nipp

Just a newbie perspective here, but I don't think you are going to really have any difference in learning curve between a duplex and a quad.  The thing you will have is obviously more tenants and the paperwork and management that goes along with that.  Personally, if the privacy is not an issue and the neighborhood/safety is also not an issue I would definitely opt for the quad.  I would find it incredibly hard to turn down the extra passive income.  Even if you don't really need the income, you can use it to build some additional capital for your next property.

Personally, I wish I had your problem.  Right now we are just trying to get things off the ground and finding the deals is proving to be more than challenging.  Of course we are taking things pretty slow starting out, but up to this point we haven't found a single deal to even try to get under contract.

Well...  I figured it was too good to be true and unfortunately I was right on that.  :(

My web browser was acting up this morning so I killed and restarted it.  Of course, this means that it had to reload the page and bingo.  Bad news.  Apparently they dropped a 0 when they initially listed it.  The actual listing price is not the $19k they had posted last night but $190k.  Obviously this is a completely different situation.

I did however learn that Zillow breaks up duplexes at least when giving it's value estimates.  So I discovered when I dug a bit deeper this morning that the Zillow estimate was $75k for each side so a total of $150k.  This means that the numbers make more sense in terms of the $190k asking price.  We are going to be passing on this one but definitely keep looking for more options.

We are just getting started and right now we are hoping to land a duplex for WAY under market value.  We are hoping to pay cash of about $20k for a property that looks to have a market value of about $75k.  Part of the plan is to immediately refi the property to get as much cash out as possible, maybe up to $50k in order to replace the initial purchase and to gain some much needed seed capital to pursue other properties.

I have heard that this might not be too easy especially if we attempt this prior to having the property for a year.  I'm also curious about the financing requirements since this would be a refi on a non-primary residence?  Does this matter?  Would this count towards the limit of 10 conventional mortgages?  What other questions should I be asking of a bank of mortgage broker concerning this?

Thanks in advance for any feedback on this.

I was listening to one of the podcasts today and of course they mentioned one of the golden rules of always having multiple exist strategies.  They mentioned that for a flip they might use wholesaling or keeping it as a rental.  My question is, but are the alternate exit strategies if you are buying a property as a rental?

The reason I ask this is that it generally seems that a rental acquisition is generally a bit more forgiving than a flip so I don't see flipping or wholesaling as typically being good exit strategies for a rental gone bad.  If I were to have a rental that I got into trouble with and needed/wanted to unload, what is the most likely exit strategy?

Personally, I would think that depends a LOT on the particular tenant.  This of course will depend upon how well you or your property manager knows your tenant.  If the tenant has a problem with it, then I would probably just defer it until the unit is vacant.  I would think though that the tenant would probably be happy enough to put up with the inconvenience.

If it's a particularly good tenant that you anticipate being there for a long time, I would even go so far as to present the tenant with a the final choice between the specific flooring options that you select.  Chances are that you are going to be OK with a few different options in the same general price range, so let a good tenant make the final call and engender that much more good will.

Actually, I think this is a great marketing strategy.  In fact, I've done the very same thing myself although I just pull the image from Google Street View.  My hope is not so much the personal touch as it hopefully is enough to make them stop and turn the thing over when they see a picture of their own property on the card.

If you are sending these to that address and the homeowner is your potential seller, I wouldn't be too concerned with the "motivated buyer" thought. The reason I say this is that your average Joe out there probably doesn't have a clue about REI. Let's face it, the people who respond to this are probably going to be motivated sellers and while they will want to get as much as possible either they are motivated or they aren't.

Just my 2 cents.

@Andrew Bosworth That sounds like a great strategy to me, but obviously you need to be sure that you can get enough on the mortgage to cover the HELOC repayment. I assume this shouldn't be too difficult so long as you are getting the property far enough below the appraised value to get the full mortgage. I really don't see any downside on this, but I'm new to the game and sure haven't done anything like this before.

Just curious here...  I'm not sure I understand the numbers that you have posted.

It sounds like you have 5 doors and when all 5 are rented you are taking in ~$2400/mo? Is that right? Your outlay is ~$2000 for PITI, water, etc.? This is leaving you a net cashflow of ~$400/month on 5 doors? That's only $80 per door. This sounds like a horrible deal to me.

I'm guessing that I'm missing something here.

Not that I know anything, but I agree completely with @Guy Raveh.  It sounds like you are basically making yourself a GC for the new buyer.  My thought would be to get the scope of work from your favorite GC and then sell to the buyer for minus that amount as mentioned above.  I would also provide the buyer with the complete scope of work and contact information for the GC that way the buyer is still getting the property rehabbed but you aren't stuck in the middle.  This way you have no legal responsibilities (at least I would assume this to be the case) as the rehab will then be a transaction between the GC and the buyer.