All Forum Posts by: Sean McElligott

Thanks for the input everyone...very thoughtful

Jason, the issue im having is that the seller knows hes selling a rehab project but wont come down off the price enough because honestly once its rehabbed it will make good money. The house costs 140,000. it needs 15,000 of rehab. but market value is only about 160,000.

Thanks for the info Chris..I think my issue is that im not getting a good enough deal on the rehab to begin with.

I love the BRRR strategy..however im stuck...if i take a HELOC out to buy a $140,000 property cash, do I refinance and get back about $98,000 (70%) to pay back SOME of the HELOC or do I keep the property paid off and pay back the HELOC monthly with rental income? I'm confused where to keep the debt: in the houses with a refi or with a HELOC...I would def refi if I was doing a HELOC to get the 20% down payment but im not sure what to do when you use the HELOC to pay off the house up front..

Thanks Alex. Actually, these properties don't come up too often so there's practically no comps.They are cash cows and the owners know it so they charge a lot more then the house would typically be worth. However, there is zero equity after the purchase other then the money I put into it. I am just seeking a way to negotiate a lower price without offending.. it also makes getting a loan difficult because the house appraises as if its a fixer upper SFH. Its just a weird niche that I need to negotiate better I suppose..

I invest in a college town where i buy SFH and rent them to college students by room. This gets me more money then if I had a typical family just renting the home. The houses are generally in disrepair and need a lot of work and getting a mortgage is tough because the bank doesnt see it as a business, they view it as a SFH. So if the house is worth 60,000 and needs 40,000 in reno but the landlord wants 100,000 for the home how would you negotiate that? FYI, a 5 bedroom home command about $2375 a month.

Congratulations fellas! I don't own many properties but I enjoy reading about others successes and learning something. Actually, Im so new I had to re-read half this thread just to follow the lingo! LOL.

The issues I face are that the SFH that i buy are in a college town where they are rented out per room as opposed to a local family for less. This method gets you a lot of income. However, the bank still sees it as a SFH, not a business, and will value it as a SFH. The owners want to price them as if they are a business. So the owners want a lot more for the house then it is actually worth. SO the owner wants say, 100,000 for a home really worth 60,000, because of the condition. That means I have to escrow renovation cash with the bank in order to bring up the valuation and get a loan. How would you handle negotiations with this kind of deal?

Thats a good story. Those tenants are great. BRRRR method is my goal. Glad to hear a success story

Would you buy a house where you had to evict a tenant on day one, spend 20,000 on renovations in an effort to make a great return with current market rates? I would have to float the mortgage for 5 months plus renovations but the rents are way under market value. The reason I ask is because in "The Book on Rental Property Investing" by Brandon Turner he writes that it would be a disaster to have that scenario. Is that terrible to take such a loss up front knowing the rewards that lay ahead? Current rents is 925 a month and I can get it up to 2375 after the losses I describe above.