All Forum Posts by: Sean Howell

I just recently bought a house hack about a year ago that’s working out well for me. I would definitely say look in the Broward neighborhoods. You’ll find much better numbers than in Dade. 

Well the first thing that I would ask myself is "What is the ARV?" If your ARV is 85k and it needs 15-20k of work then it is obviously not a good deal. Also, you mentioned auction. Don't you typically need to purchase auction properties cash the day of? I've never heard of an auction where you're able to finance the property? Unless you'd be paying cash and then cash out refi the money

@Martin W. This is exactly the reason I don't even bother with properties that rent for less than $1,000. Sure they meet the "1% rule" and all that but when you break down the numbers as @Joe Villeneuve did you'll find that they just don't work. Not unless you're getting something crazy like $800 rent on a $35,000 place. The absolute minimum I personally use is a flat $100 for maint and $100/m capex but typically I like to go a little higher on the capex, especially if it's an older home.

I'm guessing this isn't including any materials correct? I guess at this point it just depends how much work he's doing for the 10k +10%. Obviously if he's adding a whole extra wing to the house this may be a good price. But if he's doing the standard kitchen, paint, floors, bathrooms you may be able to do a little better..who knows? I'd still shop around.

@Marcelo Tostes The 70% rule is a good guideline to getting a property at a good value. Sometimes an investor may be able to pay more, sometimes less but its a good place to start. 

Yeah I'd definitely shop around and see what else is out there

+1 to what @Owen Dashner said about local REI meetups. I have found JV partners as well as some private money just by attending these things semi-regularly and getting to know the other local investors. Definitely worth a look to see if you have an active group in your area.

This seems like a pretty bad deal for you. Like others have said, you're taking all the risk PLUS this dude is double dipping!

He gets paid for the rehab and then gets to share in 30% of the profit...? I must be missing something? If that's the case why not just hire another GC, pay him, and keep 100% of the profit?

10k + 10%? Man that seems pretty steep. The real question is do you have the time to manage it yourself? And if you do, would that be a good use of your time? 

For me personally it was good for me to manage projects myself as I was able to both save money and learn a whole lot. I also had some extra time so it was worth it. For someone who has a job where they may not have the time during the day to check on the work being done, hiring a project manager may be necessary. Have you shopped around to see what the going rate in your area for this sort of service would be?

I am finding that the wholesalers in my area are generally pricing their houses quite high with thin margins. 1-3 months later when I look at the actual sale price of the houses that sold they are often going for on average 25-30k less than what the wholesaler was originally asking (sometimes much more). I was wondering if you guys have found it common practice to negotiate prices down from wholesalers or if you were buying from the wholesalers in your area for around the asking price.