All Forum Posts by: Sydnie E.

J,I appreciate your post and willingness to offer your time to some of less experienced investors. If only you were local :( I would love to find a mentor in the LA area or surrounding cities. Most PML's want you to have 3-5 deals under your belt before they work with you, which is hard to do with no hands on experience. I hope that more will be willing to offer their services. Great idea! Thank you for recognizing the need in this industry.

Thank you for responding J. I will gather more information on the property and then repost.

Sydnie

Hello BP,

I am a new investor and looking at a property that currently has asbestos, mold, and roofing repairs that are needed. The home is located in an area that could sale for 400K-435K if renovated properly. The current asking price is 200K. Would it be too much work to have all of the repairs including upgrades to make the property more attractive to buyers? What is the average cost to remove asbestos? My thought is that having these issues could potentially lower the cost of the home. Does anyone have any insight on this topic? Is this a waste of time or could this be a potential deal? Please help!

Thank you

Sydnie E.

iPhone App?????

Prashant,

You make some very good points. Finding tenants and good ones at that will be a challenge and maybe even costly. In California the deals are the ones that need fixing. If there are no repairs the asking price is so high that making a profit seems impossible. I will just have to keep looking and see what I can find. Hiring a management team will be another cost that this property doesn't seem to be able to withstand. Not to mention the property taxes that will need to be paid. Looks like I'm back to square one but that's ok. Thank you for your input.

Sydnie

Jon,

Thank you for breaking that down for me. Looking at your calculations it doesn't look like there will be too much income coming in from this property. I got a chance to go on a renters guide for the area and based on if the property has one or two bedrooms is why the price range is so different. I have not been able to contact the seller due to the holiday but looking at the renters guide the price for that area fell between the two. Even at the higher rent I may be cutting it close. Assuming that I am able to keep tenants all year. This property has been on the market for 161+ days so I thought it may be an opportunity to jump in the market. After reviewing the numbers I think it would be better to find a SFH that I can fix and flip. Thank you for always providing such detailed information.

Sydnie E.

Thank you both for your detailed responses. I know my questions are across the board but I haven't been able to locate a book that provides such details and instructions for new investors. If you know of any, I would love to hear about them. The information you provided will really help me when assessing this property. Currently the property is listed for 249,000. It would need "lipstick rehab" as you mentioned Harry for all four units. The bathrooms would also need tile and maybe new toilets, tub etc. I know you mentioned using the 50% rule for income evaluation but can I still use the 70% rule to lower the purchase price from the seller?

50% Rule Clarification:

If the standard rent for that area is $895-995. I guessing I would multiply that number by 4 and then take 50% of the total to figure the monthly cost. Is that correct? Any income for me would be great. I look at it as additional monthly income that I would not have but should I be calculating a specific percentage of return in order for it to determine if it is a good investment or is that a personal decision based how much I want to receive?

I appreciate your responses. I'm trying to avoid as many mistakes as possible as I adventure into new territory. It is a scary thought but I continue to push myself to move forward.

Thank you.

Sydnie

Hello BP,

I am new to investing and currently looking into purchasing my first rental property, four units. I am not sure what the first step should be. I plan to call and have the property inspected to see if there are any major damages to the property but I don't know if I am making a smart move or not. How do you evaluate rental property to see if it would be a profitable investment? Does the 70% rule still apply? The property is not in the best shape and from the looks of it all of the units will need repairs. I not sure what type of things I should run away from or just fix it and hope for a return.

I also would like to keep my investment adventures separate from my personal credit and have heard that setting up a c-corp is the best way. The internet people search will show any businesses that you have and I don't want random people having that information. As a newbie would it be smart to set up a c-corp with no current property income. Can anyone tell me the best way to go about this in the least expensive approach?

I welcome and appreciate all feedback.

Sydnie

Hi Simon,

I'll be sure to include that in the agreement. Having that will be a real money saver in the event a home has any hidden repairs. Thank you for your input.

Wow! Thank you Jon for that detailed explanation of this process. That was exactly what I need to know. I'm currently in the process of finding an agent but even though I will have an agent I want an understanding as well. You included some fees that weren't on my check list. So, Thank you again.