All Forum Posts by: Sebby Gabre Madhin

Though they are not based in Ocala, Equity Title is a very well respected title company in central Florida, and they handle closings all over Florida.  I know investors in Ocala who have used been very happy with their services, and they definitely handle investor needs, including double closings, etc.

Hi Ryan

I agree that this may be promising on first glance but I think that you need to get/give more information before deciding if this is really a deal. I would take a closer look because this appears to meet the very crude 1% rule at rent of $1800 and pp of $170k, but I wouldn't call the ROI without more info.

The statement of "expenses" is too vague.  You should be able to easily get a breakdown of what the taxes and insurance are (and confirm by calling an insurance agent and checking online public tax records), but this is just the starting point.  To really know, you have to factor in other costs:

--any landlord paid expenses, include lawn care etc

--vacancy-- I also use 8% of gross rents as rough estimate

--set aside for capital expenditures- I use 10% as gross number, but to really know you if you should move this higher will depend on age/condition of roof, HVAC, and other major systems

--set aside for repair--again, I use 5-10 % but very much depends on how recent the  rehab is, condition of units, etc.  Also factor in your own/your dads "handiness" level.  My partner can handle most common repairs (plumbing/electrical/etc) so can shave off a % or two, but if you will be relying on an outside repairman for all, then you have to be honest and bump it up.

--always factor in property management even if you don't intend to use it, depends on your area but in mine can get a decent company for 7.5%, other areas are higher or lower.

you can use the BP rental calculator (look under tools), among others, to plug in these numbers and play with different scenarios.

You need all this to get an accurate cash ROI number and determine how much you want to offer. After all is said and done, I would VERY much agree with your caution in dealing with a unit that's been on the table since August---esp. in todays hot multi market--- I wouldn't completely discredit it (some of my best buys have been units that others passed on for whatever reason), but I would definitely dig deep before committing.

I agree with above that you have no equity to sell, and, unless you have a very generous relative that you can live with for a few years while you are waiting to age out of the bankruptcy, you need somewhere to live, so moving to rent another place and renting the place out may not make much sense either.

Depending on your life/family situation, have you thought about "house hacking" by getting a roommate (or roommates) to help pay down your mortgage?  That's one way of using OPM to pay down your debt and or build up cash for the next purchase in a few years.

That is a killer return and my first instinct is to say keep it, but if it really a horrible area and you don't want to stay invested there, then I would consider selling the half, BUT NOT as a rent to own, just a sale for the $50 k if they can swing a loan from elsewhere.  You will then minimize the risk of what happens as the area declines.

If you do that then you will have < 10 k invested in, and getting $1100/month, will recoup your investment pretty much after a year or so and then you can either keep going with the rental or just sell it to cash out completely, and anything you get from the sale is pure profit.

We are also doing a lot of gray these days, both in and out.  We have been using Sherwin Williams Summit gray for paint, with SW Greenblack for trim.  Comes out nice.   Often, but not always,  go with a bright red door and red mulch.  Buyers seem to like the look.

Are the tenants on the other side good tenants, ie do they pay on time, keep the unit clean, quiet, etc.  That has a lot of value, in and of itself, particularly since you are living in the duplex yourself.  If they are otherwise good tenants paying undermarket rent, I would try to negotiate a gradual increase in rent (like maybe $100 with this renewal, and smaller amount next year if they stay). 

You will save the costs of renovation, and the vacancy, and that is significant.  Also, you have the "known" entity of a good tenant rather than the crapshoot of a new tenant, who may or may not have lied to get into your unit.

With < 6monhts since you bought it, esp with no initial equity in the house, I also very much doubt that you will be able to pull any money out by renovating a kitchen and floor, unless your market is crazy with appreciation.  I don't know much about Stuart, but I doubt it.

So, in a nutshell, my advice is to try to hold on to your tenants if they are good.  Itif they are not then yes, don't renew, renovate, and try to get market rent.

In our market the 1% of listing price, with a minimum of around $1500, also holds, for low-mid range houses.

Our stager gives us a slight discount for volume/repeat business, but not much, as there are fixed costs with the movers, etc. This is for delivery/setup/removal and 3 months use, with a small fee per month after ($250 I think, thank goodness we have never had to use it yet...).

IF I had any taste, and if we did more volume, I might choose to buy the furniture and move from house to house, but since neither is true I think that my stager's job is safe!

Pics below of her most recent job for us, a small house (800 sq ft), full staging $1400

I found it-- it seems to still be there but just not longer a clear link to it.  You can get to it by entering biggerpockets.com/portfolio.

I just downloaded a current pdf so that I would have something to build on if they get rid of it though, since it looks like they might not intend to keep it around.

WTF, I use the portfolio tracker ALL the time, and now it appears to have disappeared. I know it was "beta" but I've been using it for years and would have liked a head's up if BP was getting rid of it?

What's up admin?  Is it gone or just under a different name?

@Mindy Jensen

As an investor, I wouldn't buy a sinkhole property for a flip.  You have to disclose, and most retail endbuyers will RUN away when they hear the word sinkhole.

Only time I would ever even consider it if it was a buy and hold that I could get at a steep discount, and rent for enough cash flow to justify the risk....and could get a full inspection/review of the foundation remediation work done....and even then, I would pause.