All Forum Posts by: Seung Lee

As much as you can!  No one ever went bankrupt on a cashflow positive property.  It's only when you run out of cash that you run into problems.  You may not need any of it, but it's always good to have as much in reserves as you can.  If you do your inspections well and figure out what the expected repairs will be, then you should have a good idea.

Even if you don't get this project, going through the motions to investigate and learn about the process is valuable.  Keep doing it until you get a better sense of the market and what it will take to get a successful project done and you will get your first deal in no time.

I'd say go for it, if you have the funds and the means to get the property fully rented and upgraded.  Based on the expected rent of $2830, and a project all in cost of around $225,000, that is a pretty good ratio.  As long as you have some buffer in your bank account for some unexpected up front costs that you didn't anticipate, you should be able to be cashflow positive on it from the get go or soon thereafter.

I'd say that the hardest thing will probably be to get your offer accepted.  I don't know that the market is so bad that yours would be the highest offer submitted.  But if it is, I'd say based on what you've said so far, you will be getting a good deal.

Also, finding a title company to insure the house on the sale can be tricky.  I had to go through some hoops and my title rep, who was a rockstar in helping me get it closed, had to pull some strings.  You can do a quiet title action or go through Tax Title Services, a company that certifies your property for you, but both costs $2500+ to do.  So be aware of these issues going in so that you know how to handle it.

I just sold it for a profit about 2 weeks ago.  It was an interesting and somewhat long and difficult process but in the end, I ended up putting in about $115,000 ($49,000 purchase price, rest rehab costs) and sold it for $185,000 (less 1.5% seller credit and closing costs) plus about $8400 in collected rent.  It took me about 18 months from start to close.  So on paper, it was a decent "flip" but in reality, I had to put in quite a bit of work, travel far to deal with issues, and the neighborhoods in Coachella can be very hit or miss.  I ended up doing ok but I learned many lessons, one of which was, stay closer to home.  Issues can be hard to deal with from afar.

I found an owner of a house who is due the overage.  I did a bit of research and the house was deeded to 3 people, her, her mother, and her step father.  Her mother is deceased. Her step-father left the country long ago and no one has kept in touch with him.  I am speaking with the daughter.

Assuming that the overage amount is $10,000.  How much is the daughter able to claim? Does she have to do anything to show that her mother is deceased?  Or if she makes the only claim, does she get everything as long as no one else makes any claims to it?  

Thanks for your help.

I personally don't think so.   You'll need an appraiser if you involve a bank for a refi later. But having an appraiser's guess of value won't mean that you can actually sell it at that price or that he is even right.  I would get a few local real estate agents to give you their value judgement and take 20-30% off that as a conservative estimate.  You'll find out for sure when you try to sell it.  Or if you are planning on renting it, who cares what the value is until you go to sell or refi?

What is the value of the home currently?

What is the amount of equity in the house?

What is the age of your Mom and her life expectancy?

What is the terms of the reverse mortgage that is offered?

I like this site for a rough estimate.  http://www.eppraisal.com/

This is assuming that the information in the public databeses are accurate.  It'll give you a ballpark figure.  The website assumes that your house is similar to ones around it.  If it's much worse, take a 50% value cut.  It'll give you a decent ballpark figure to get started.

I second Redfin for markets that they cover.  Their app is the most user friendly that I know of.

I would talk to your real estate agent that took the 1st month's rent and let them know that they need to help rectify this situation since they did the background screening and let this person in the property.  And you need to find a new real estate agent and hire a real property manager that knows that they are doing.  You paid too much for the real estate agent's services and are not getting anything in return.  If that agent is not helpful, I'd consider reporting them to the real estate department of your state and filing a complaint.

Get good knowledgeable help in the eviction and charge at it hard.  Don't take partial payments (like $300 now and pay rest later) because that resets all clocks.  Get full payment with late fees or nothing at all.  I'd recommend just getting a new tenant at this point.