All Forum Posts by: Silvio L.

Hello All,
Recently my girlfriend and I decided we were going to start a wholesaling business together with the hope that we could earn enough to eventually purchase distressed properties ourselves. Our goal is to help distressed homeowners in our communities, particularly where there are cultural and language barriers present.

We've constructed and begun work on a massive marketing campaign consisting of direct mail, newspaper ads, magazine ads, internet marketing, business cards and pamphlets at local businesses, cold calling, walking around our neighborhoods looking for properties, and word of mouth and bird dogging.

Yesterday we officially started the business by mailing out our first 50 yellow letters. In less than 24 hours we got 2 calls! I called both back but neither was really interested in selling.

Still, the rush of getting those first two leads has really pumped me up. I can't wait to get this really moving. Also, I was surprised that the letters actually work!

Wish us luck!

Hi Scott,

Thanks for the reply. Here are a few more details.

1. I had no notable reno costs. a few light bulbs and a new faucet. The seller was a rehabber/investor that bought the property for 80k and sold it to me for basically market value. I have had some repairs since then but I wouldn't factor that into the acquisition cost.
2. my taxes are 9,000 and insurance is 2,000. I estimated maintenance and repairs at 10% of gross rent. I did more specific calculations but for the sake of simplicity I made it 50%. I actually estimated about 48%. With the condition of the home and being only 2 units, I suspect the maintenance to be reasonable. Mind you this includes water; I have factored in water according to an average of what I've paid since living here.
3. My purchase price was 199k. My loan is 193,955k. down payment was 6,965. the 1.5% you speak of is the the difference, I believe. To be honest I don't know to much about that, I guess it's a detail I missed.
4. Yes
4. I did think to subtract the property taxes in the closing costs. That's good to know. I don't have the paperwork with me but I will take a look at that.

Hello Everyone,
I am new to the world of Real Estate investing and I came to bigger pockets to get ideas and advice for my next deal. But before I post about that, I wanted to share with you all my first deal, which I am pretty proud of. I say this because I followed some of the 'golden rules" practiced but some on BIGGERPOCKETS and I think my plan was executed successfully. Quick background: I wanted to get into real estate investing but decided I would start with an FHA loan as I could live in the home and also take advantage of the 3.5% down payment. Here are the details:

Home is in a decent (not joking) area of Newark, NJ.

House: 2 unit duplex, each with 3 bedrooms, 1 bath, and standard amenities
purchased; 199k
down payment: 7k
closing costs: 7k
total cash outlay ~ 15k

I am currently occupying one unit and renting the other for 1200. I am moving out next month, and once I rent out this unit the numbers will look like this:

monthly rent: 2,400
expenses (taxes, insurance, maintenance, legal) - 1200
NOI: 1,200
monthly debt (30yr @ 3.75%) = 898
cash flow: 302/mo
yearly cash flow: 3,624
ROI = 24%

What does everyone think of my first deal? Also, I have a few questions:

1. What is the next step for the property, do I create an LLC and transfer the property to the LLC?

2. Any recommendations for my next deal? I have good credit, but not much cash. Plus, I don't want to go the conventional route and use up my cash reserves (20% down - no way). I want to continue my buy and hold model, but I would like to increase cash flow by purchasing a property at 60-70% ARV. I definitely have the manpower and resources to do a full rehab if needed, but no funding. Is there success in using a Hard Money loan for acquisition and then refinancing to a traditional loan after repairs? What do most investors do in terms of financing to acquire and fix properties for long term hold and cash flow?

Thanks so much everyone, not only for your help with this, but also for all the information I've gathered on this site in the past year. Cheers!!

-Silvio