All Forum Posts by: Steven Birch

Hey BP!

The numbers-

Asking Price- $159k

Taxes-$4k

HOA- $220

Lender offered 5% down at 2.76% 30 year conventional. 

Previously Rented for $1600

Cap Rate- 7.49%

Cash On Cash- 26.31%

No work "needed" to rent it out. Has new LVT throughout, new tile, new fixtures, new trim, new paint, new furnace, new ac. Cabinets/countertops are old and I may swap for about $5k.

I came across this townhome thats about 2 miles from my SFH. Its in a great neighborhood, great school district, and comps are anywhere from $160k to $200k. However, its listed as a short sale, but the owners owe less than asking price? Bank related they just stopped paying and are in pre foreclosure, giving them the opportunity to sell being they have equity. Has anyone heard of this?

DEAL OR NO DEAL

That's great information. I'll do some research on that. Thank you

 Can you elaborate on what a 2 page blind offer is?

Hey BP friends!

I work as a police officer in my local community so I have the luxury/burden of knowing the good areas from the bad. I also have the ability to "drive for dollars" during slow times. I've identified roughly 45 homes I believe have potential for a direct mail campaign. 

Some of the homes are distressed, have had sole owners/occupants pass away recently, have been subject to frequent landlord disputes, etc. 

My understanding is that hand written post cards that are personally written to the homeowner work great. However, being there are so many, in your experience is typing a personalized message on a postcard going to net much worse results. The 45 homes I've identified are in the jurisdiction I work, however that doesn't include the 30 additional I've found in the town I reside in. Hand writing 75 post cards multiple times seems awful lol. 

I'm open to any suggestions or feedback on getting my personalized message out there. Do I just hunker down and do it?

 Great advice! We will hash it out deal by deal. 

@Daniel Pearson The current draft of the agreement is sent over suggesting a 60/40 split. He said he's going to think it over. If he denies, than the next offer will be an hourly rate/punchlist of projects I'm working on. That'll be the next best thing. 

@Daniel Pearson The relationship is solid. I'm not concerned with the long term success/failure of the business affecting our relationship. My real concern lies in setting precedent for deals moving forward. I don't want to set the precedent of an unfair split while I'm pouring weeks and weeks of sweat equity into the deals. 

@Peter Mckernan I have a call into my tax lady to help walk me through the ins and outs. 

Thank you both for the insight.

@Peter Mckernan

Some great tips there. This is our first deal. I like the idea of a 60/40 split to compensate for my time and additional capital set forth, while still compensating her for her efforts. 

I will speak with an attorney regarding the LLC and drafting the OA. I like having the foundation set on paper to prevent any future issues with disbursement.

My next question would be on Pro's and Con's of an LLC. Is there tax benefits/issues? Issues regarding getting financing?

Thanks again for the response @Peter Mckernan

My brother is interested in joining me on a real estate deal but I have a couple questions for the community on the best way to go about structuring the deal. 

My brother will be funding roughly 40% of the rehab cost while I fund the other 60%. However, the tricky part is his wife is the real estate agent that is representing us on the deal AND I'll be the one doing a majority of the rehab on the home. He's not handy and doesn't live near the project to assist. 

My question is, what is the best way to structure the profit disbursement being I have to do the 3 months of labor? There's an extra layer of complexity being his wife is the agent but an even 50/50 split seems crazy with the additional time/effort/money on my end. 

Am I being a selfish a**hole or is there a way that makes sense for all involved. 

 270k all in cost. Arv is roughly $325k. Plan is to hold long term. 

I live in algonquin! I'll make sure to connect with you.