All Forum Posts by: N/A N/A

well, just as an update, after getting tons of opinions at work...i ended up returning all my painting materials to home depot and traded it in for a random orbital sander --- which i just wanted to say is freaking awesome! i bought a dewalt because all the review on epinions sounded like the other orbital sanders, while more powerful, is it's own worse enemy since due to it's aggressiveness, can lead to gouges and grooves.

so i decided to re-sand everything down to its original state and re-stain with a lighter stain - classic oak color. if its my own home ( actually i technically live in it right now), i would have been more risque but you guys are right, if its potentially a rental/investment, you need to go neutral!

I agree black on black might be a little heavy but does anyone else have a suggestion? I already purchased my black galaxy counter top so that can't be changed at this point. I wanted to choose a dark cabinet color because a light color might make the cabinet look cheap and a darker color will cover up some of the imperfections better.

I have a deep red accent wall (this is what the cabinets are lying against) in the white painted kitchen. dark grey-ish tiled floors, black countertop, SS appliances.

Are there any interior decorators that can help a guy out? What color should I paint my cabinets?

any opinions? or else i'm going straight goth!

Has anyone seen this pairing? Is this an ultimate no-no?

I screwed up the staining on some cabinets. Then I ended up using a sand belt (stupidly) to try sanding everything down and starting from scratch but it cut into the wood on many parts. I finally decided to use some wood putty and just paint them.

Anyone have opinions on black on black?

Paul,

Welcome! I'm also from Chicago in the South Loop area

I've also had trouble finding the deals MikeOH have talked about but I am starting to think more and more it's really dependent on the market/area you live in.

For example, if I purchased a 1BR condo in chicago for 200k, using the 2% rule, there is no way I can get 4k rent a month.

Assuming I purchased 70% of FMV, at 140k...then using the 2% rule, there would be no way I can rent a 1BR at $2,800. Most 200k condos near south of the citymight rent for 1k or $1,300 tops (1,300 is really pushing it though).

So, I mean I totally think MikeOH's makes sense, anyway you crunch certain numbers, you are either making money or losing it.

So my question is, does anyone who works out of a more metro type area have a different type of strategy they have found successful using? The Rental Strategy seems to work in Ohio but as you can see, those numbers will not work in chicago. For the 2% rule to work in Chicago, using the formulas in reverse, with an average rent of 1k, my cost to purchase a condo would have to be 50k. The only condos I've seen for 50k (FMV would be around (60-90k)would only rent for 400-600, which would mean I need to purchase it for 20-30k for it to make sense....

MikeOH,

Is there any reason in your calculations you assume no money down and a 20 yr fixed?

And how much is the minimum amount of positive cashflow you use as a standard to determine whether it's worth it to you? do you decide depending on the number of units? or is it purely by the numbers?

You said you would consider if the price was 436k--- debt service using those rates means 3,650/mo and basically around 700 cashflow for 24 units...basically +$30/unit a month.

Thanks in advance. I'm just trying to learn how to evaluate deals better.

If you get something under contract are you obligated to do anything? Or do you just have the negotiating rights for an agreed upon time period in which you can re-sell the rights to the contract or complete the sale on your own if you choose to do so?

Wheatie,

Actually, I'm not necessarily trying to pull out any cash on the refinance. I want to pay down my mortgage and have lower mortgage payments and then possibly use a home equity loan in case I need it for something (like a deal that comes up).

So I'm confused.

I have this 125k loan. I put in about 10k of my own money into rehab work to increase the value of my property by approximately 23k.

How do I realize this 23k gain without selling? Is the simple answer you can't until you sell?

Sorry to beat a dead horse but I just want to make sure I understand completely.

OK. Let's try to use real numbers right now.

Say I paid $157,000 for a property.

With 20% down, Mortgage is 6.5% 30 yr fixed for $125,600

Let's say I spend money to rehab it. Comps in the area are around 180-190k. Let's assume it gets appraised on the low end of 180.

So the "sweat equity" is 180k-157k=$23,000 (this number includes the labor and materials paid...does not mean i actually spent 23k)

If I tried refinancing after a year, assuming they still give me a 6.5% rate, does it mean the principal on my loan would now be:

125,600-23,000 (sweat equity)=$102,600?