All Forum Posts by: Steve R.

Thanks for the info! I will definitely check them out!

Hi William,

I found your post while search for the same thing. Please let me know if you find a good CPA.

Good luck with your investing!

Hi guys! 

I know I heard @Brandon Turner talk about a binder that he puts together of financial info and properties to give to a bank when he is getting a loan. I love this idea, but I can't find any info about it on here. If you know of an article about the subject please send me a link. Also, if you have your own system I would love to hear about it.

Hi Jason, 

My first criteria is the 2% rule which states that the rent received per month will equal 2% of your investment. (I.E. $800 rent, $40,000 investment.) It is not a hard and fast rule, just something to look at first. I will go below that number if it is a property that I will not have much for CAPEX on for a while. You have to figure out what % works in your market.

I also try to use the 70% rule that flippers use. It states that your offer must be 70% of ARV less your rehab expenses. If I follow this rule it gives me forced appreciation and an exit strategy if needed.

Good luck!

@Andy Hudgins I decided to pass on it since I could not locate any foundation at all. The wood cripple wall appears to be sitting only on crushed rock. 

Thank you all for your words of encouragement and words of caution. I went back over last night and took a better look in the crawl space. I dug the crushed rock out from under the sill plate and found daylight. Then I thought, surely they must have put piers down in the corners and every 8' or so, so I crawled over to the corner and same thing, nothing but wood sill plate sitting on crushed rock. I live on the Iron Range and they moved the town starting around 1920 so that they could mine underneath where the town currently sat. This may be one of the houses that they moved. Whoever moved it obviously did not worry about doing it correctly

@Alex Franks I understand where you are coming from but the idea that is bouncing around in my head is that the folks that couldn't normally afford to rent a 3/2 with a two stall garage and large lot on the edge of town would love to rent this for $150 or so below market rent. It would not be perfect, but theoretically, it would be safe and secure. (of course, in this example, it is not so safe and secure.)

Maybe my thinking is flawed on this issue. What do you guys think?

@Andy Hudgins Do I need to dig the holes below the frost line for these new footers? Since the bottle jacks are hydraulic is there any chance of them failing some time down the road? Thanks for the help!

@Larry Turowski I could sell it contract for deed with less than 15k into it. Yes, there are other investors that have steered clear but I think sloping floors scare people away. I'm just trying to figure out if there is a good reason people are scared off other than there will be no appreciation.

@Russell Gronsky The property is not a safety hazard. It just has sloping floors. I do realize that it will not appreciate without the floors fixed though.

@James DeRoest Thanks for the tips. I'm going back over there tonight to give the crawl space a  thorough inspection to see if it can be straightened.

Hi BP! I have been going back and forth over this issue.

I am currently looking at a 3/2 SFR in a decent neighborhood that that I can pick up very cheap but it has sloping floors. It sits on post and piers with a crawl space. The house has been there a long time and I don't think it will move much any more. I can purchase and do a light rehab for 20k but I would not be fixing the sloping floors besides trying to jack up here and there in the crawl space. I should be able to rent it for 650-700 a month which would generate around 375-400 in cash flow or I could sell it right away contract for deed without putting much into it for 30K.

What do you guys think? 

Hi Sonny,

Welcome to BP! I only have a few rentals right now but I will share what I know. I have one of my rentals grandfathered in at a low rate with American Family but they have not been competitive on my newer properties. My last two have been with a small, local insurance broker in my town of Hibbing, MN. I have 300,000 liability per property on my policies and I can up the medical payouts from $1,000 to $5,000 for just a few dollars more. My insurance agent explained to me that if your tenant gets injured on the property, they will pay for the medical bills without asking too many questions up to the limit of your medical payments on your policy. 

Once you get a few more properties it wouldn't be a bad idea to get an umbrella policy for $1,000,000 or so to protect yourself. Good luck!