All Forum Posts by: Stephen M.

Did you ever get this answer?

Thanks Melissa!  This one certainly had its hurdles more than others.  By the way, I think we know each other.  I believe you work at Echelon?  This is my company:  https://www.yelp.com/biz/chicago-apartment-seekers-chicago-5
You may recognize my wife as well  

Thanks John. I was just trying to get a rough idea and that would make sense for a single family home.  How is Champaign going for you?

Investment Info:

Other fix & flip investment.

Purchase price: $371,268
Cash invested: $65,000

The condo was listed wrong so we picked it up at a great price. We are under contract to sell for $525,000 with no agent commission.

What made you interested in investing in this type of deal?

I know the building well as I live here and I also have experience flipping and being a full time realtor

How did you find this deal and how did you negotiate it?

MLS. It was listed as 1/1 when it was really a 2/2. It also stated it was 800 sq feet when it is really 1060. Foreclosure.

How did you finance this deal?

Cash with some help from a family member

How did you add value to the deal?

experienced in investing, being a realtor and in renovations.

What was the outcome?

Closing in 3 weeks. Should be about a 75K profit.

Lessons learned? Challenges?

Don't be afraid to drop a little more money into it if your gut tells you it will be worthwhile. Our biggest hurdle was the master bathroom. The toilet and sink were switched which created a costly plumbing issue if we wanted to reverse it it back to where they should be (we are in a highrise) so we left it alone, but this also caused us to not be able to expand the bathroom further. Although it may have cost us $2000-$3000 more, I think we would have sold for 15k+ or more. Go with your GUT!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Just myself and my wife!

I have always been interested, but obviously there are risks with the types of renters, turnover etc. My issue is managing it. I am in Chicago so it's not realistic for me to manage a property.  Does anyone have a rough idea of what property managers will charge in some college towns?  I know it can vary greatly, but I just have no idea if it is typically more or less than being in a big city.  Thanks. 

-Steve

Thanks everyone for your guidance. I really appreciate it and it all makes sense to me.  I did a deal recently for a client and the seller was all about his "cap rate" on his investment condo for which is why I questioned the relevancy of it.   

Thanks so much John. Now this maybe a stupid question,  but what makes say a 4 or 5 a bad cap rate?  Of course you want to maximize your ROR, but is 7 or 8 the magic number based on the ROR in a property as opposed to placing in say an annuity?  I see a lot of 7 or 8 numbers as the threshold so I'm curious why it's 7/8 an not say 4/5?  

I’m a flipper/investor and trying to figure out what to do after we sell this next flip. I hear varying opinions on what truly is a good cap rate if we decide to buy and hold next which I’m leaning towards, given our current local market. I’m curious about your opinions? Google searching is beyond cumbersome so I appreciate it if you don’t send me some link to a website and rather give me your opinions as experienced investors. Thank you in advance and i promise to return the favor with any advice i can offer as an investor/flipper and full time realtor. Thanks again.