All Forum Posts by: Chris Jackson

@Brian Smith My real estate agent says the rent on the on the occupied side right now is $675 a month.  I am thinking I might get $700 after rehabbing the one side of the building - but that's probably about max. This duplex is in a lower-income section of downtown.  (My agent used the word 'ghetto'.  haha)

My agent also told me she knew of an off-market SFH for about $45K that needed a lot less renovation than this totally gutted duplex.

@Charlie DiLisio Could you discuss a little bit more about the building violations you were talking about? How or Why could there be some sort of a building violation? And you said it was easy to check on that - how does one go about finding that information?

this will be my first purely investment property, yes. And you're right that I don't have capital to put in too. The 203k won't work because I do not intend on living there at all. Not sure what other options I have for construction loans, but borrowing too much will certainly cause me to be negative cash flow until I get a second renter in there

Well - my first dose of reality. My first dose of fear.  And excitement.  But mostly fear.

To rehab or not to rehab.  That is the question.

$60K gets me into a duplex.  Half is fixed up and rented (has been for 2 years), half is this.  A bombshell.  Missing plaster, floors and walls; but full of dead animals, leaks and holes.

So help me out in conquering my fear and putting it back into a mathematical equation. Math isn't scary - it either makes sense or it doesn't.  

Owner is asking $70K I might be able to get that down to $60K.  A 30-yr fixed loan at $75K (60 + 15 for commission, closing...) is $390/mo.  The monthly rent is $600.  I do not want to do the work myself; I'd rather get somebody who knows what they're doing to fix it up. I'm thinking that I might break even month-to-month from the rented side - but is it going to cash-flow so that I can put reserves aside for doing work?  I don't have much money to put into the property myself so I'd have to get another loan to do that and then I'd be cash-flow-negative.

What would YOU do?  Walk away from the deal or get creative?  

I wouldn't necessarily suggest using line of credit (what I mentioned earlier) either if you're planning on spending a long time DIY'ing.  My method would only work if you're going to contract a crew to knock the job out quickly. @Jacob Anderson thanks for your reply - that is just what I was thinking.  Although I hadn't thought about applying for a bunch of credit cards at the same time that I was applying for the lines of credit.  Do you have any good suggestions on what kinds/companies of credit cards I should apply to??

Just got a phone call from my personal bank, actually, telling me they could only loan $10K. Dissapointing,but that is why i am going to ask multiple banks!

thanks for letting me know that you do this too!

Hey all - I'm going to throw my two cents in with everybody else.  Lots of people have been talking about the 203K loan. My mortgage broker told me he won't even do those anymore because of all the restrictions and extra fees that are associated with them.  But in that conversation he did come up with another possibility.  I am currently looking at buying a duplex.  Half is rented and half is completely gutted.  Another option he told me about is going to a couple banks, or online banks as quickly as possible (don't know if that really matters or not) and getting unsecured lines of credit.  They're based off of your income and credit score, I guess, and as far as I know usually only go up to about $35K - so you might need more than one of those lines of credit in order to pay for all the construction that needs to be done.

This is what I'm thinking about doing.  Tomorrow I am going to go to my personal bank to get a loan, then as soon as I'm done with them I'm going to apply online at USAA (my insurance company) and somebody online from LendingTree.com.  If I can successfully get 3 lines of credit for about $35K each, then I'll have almost instant access to $100K for doing rehabs and flipping them or refinancing them.

What does everybody think about my option??

@Ayodeji Kuponiyi thanks for the warm welcome and great advice!  I am eating up as much as possible.  I want to replace my teacher's income with rentals as quickly as possible!  I. Am. Excited.

Thanks, @Kate Hall!  I am interested in anything that makes sense!  =)  Please keep me in mind whenever you find stuff in the Carlisle-area!

@Richard Capers Jr - I haven't really crunched numbers yet besides trying to see what some other local rents are.  The owner says he hasn't raised rents in 6 years, but the $750 seems pretty right-on from other places I'm seeing.  I'm going to ask a real estate agent/friend in the local area what she thinks.  The owner already plugged his lawn care guy - but I think if all I am owning is one duplex, I'll probably just manage it myself for the time being until I get a couple more under my belt.  Once I start making some more deals I'll contract out.  (I already have a full-time job!)