All Forum Posts by: Stephen Waldroup

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I went and looked at this property today, and it needs between 5-10k in repairs. All cosmetic like new paint, flooring, and some other little things. The price is 74k right now and I did the calculation with 65k and 74k, but left it at 65k here. I am just looking for some advice if I'm missing anything. I also put it in the BRRR calculator which did not give much of a cashflow, but had a little over 9% coc return and one third the money I needed after I refinanced. 

@John Leavelle I also looked in the area with same size homes selling between 95-150k ish. The 95k homes are about 1500-1600sq ft and the 150K are homes between 1900-2500sq ft. The foreclose is 2100sq ft. I also have looked around on rents and a homes between that size pretty much all across town are 1000-1300. One home that is 1300 for rent is not far from the house. Duplexed that are not far are 995.

I also have enough cash that I could invest my own money and not have to use a hard money lender. The only thing is I definitely have to do it on the right deal to recycle my money, or not have much money in the deal. Yes I agree I understand the power of the BRRRR method which is why I would rather do that then just buy something nicer and have to put 20-25% down.

@Nicole Hoss Yes I read Long distance investing by David Greene. I understand all the concepts, but I feel like that would not be smart trying to do that on my first deal. I have also looked at turn key companies, and have hurt good and bad things which is scary to me also.

@Nicole Hoss Yes it's between 5-10miles from were I live. Yes this would be my first. I have analyzed quite a few places, but they loose money or barely make a return. I know to get a decent deal I'll have to look at a lot of places, and make a lot of offers that will be rejected. I just also don't want to get analysis paralysis. 

@John Leavelle I found it on the MLS. It is a foreclosure. The 49k is what it is listed at this moment. I came up with the ARV by the tax assessment is appraising it between 115k-120k. Houses next to it and right in the area about the same size are between 95k-150ish. I first put in the 70% into LTV and it came up to -$50 cashflow and inf% cash on cash. That is why I put 60% for LTV. I would really like to be able to find something that at least makes 8% cash on cash and $100 or close to it cashflow after everything. I know I don't have to hit it out of the ball park for my first deal, but I don't want to be barely making a return while having to do all the work. Or am I thinking wrong about what I want?

I understand what you mean about the CapEx.

@John Leavelle Thank you for the response. I know once I see the house the rehab cost could go way up. I put 25k in repairs to just have a number that would show a cash on cash return and cashflow. If the rehab cost was much more I don't see it making sense, or am I over thinking thinks about a deal. I also changed the cap ex to 10% and cashflow went to 39 a month and cash on cash went to 13%. I see people saying all different things about what thy put for cap ex. I see some say if the repair all the cap ex items in their rehab they put 5% or so if they don't repair everything they put more. I understand it's just money you put back for rainy days, and I am a very conservative person when I run numbers. I just don't want to be too conservative that I don't ever get into a deal. Thank you again

@Michael Noto so even if I fixed all the cap ex items repairing it I need to put more than 5 percent on repairs and cap ex? 

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I have not look at this property yet, but just running some numbers, and wanting to see if my numbers are making sense. 

@ John Leavelle

I definetly don't mind some money in the deal. If it can bring close to $100 dollars a door and at least 10% cash on cash return. I don't feel like that is unreasonable. I'm still trying to get my first deal. I put an offer on the house that I analysis and it was declined, but I know there will be another that I'll get. 

So i changed it to so I had no money in the deal. Made the loan for 85k cashflow only 22 dollars. But then i would also have 11k to put in another deal with all my money back correct?