All Forum Posts by: Sundiata Jackson

@Matt John Thank you for the wisdom. It is always great to hear some of the pitfalls others have gone thorough. It helps newbies like myself gain more confidence to make the jump. As a a new investor, do you have any additional advice on making your first purchase? What are some of the things you have had to do to find your deal? What are some of the things newbies should avoid(besides not paying 20%) when acquiring their first property? 

@Bao Huynh I know exactly where that is. I a not familiar with the exact complex but I lived down the street. The area is a decent area with working families. Last time I check the area out town homes in that area were going for 90-95k. Condos were selling for roughly 85-90k. This was a couple of years ago and may have changed. That particular area has a strong rental market with rents from 900-1200. I see a condo like the one you have and that particular area, rents could be 1000-1150 or possibly more. The area is still growing and value and rents will continue to grow. As a wholesale I am not sure how easy that would be. 

Looking at Zillow in that same community there are condos being sold from 115-130k some of those properties are foreclosures, properties last year sold for 88k-122k. A 2 bed 2 bath, in the same community rents for 1100. IMHO I would try to find an investor who would likes a rent ready condo. With that being said its appears that there is a HOA of 200/month. I would try would continue to push with the wholesale but I do not think you will make the spread you are looking for. I would start looking for other exit strategies to make sure I can get rid of the property.

Do you have any other exit strategies? 

Is the unit rent ready?

Is the owner motivated enough?

Is the owner in a position to do a seller financing deal?(I know this will cut in to your profit but just thinking of ways out just in case.)

I hope this is helpful and i hope you are able to succeed in selling. 

@Bao Huynh I just moved from Sandy Springs a couple of months ago but still have family in the area that i visit often. Sandy Springs is a nice area and has a lot of new construction going on i.e new condos, new live and work communities and the new Mercedes Benz dealership. There are pockets of Sandy Springs that are not as updated as the other parts. Sandy Springs has areas that are about C+ but upwards of A+.  Do you know what part of Sandy Springs this condo is located? 

@Ralph R. That is very true. That is why I use 10% for vacancy, repairs, PM and CapEx. Although I know I could cash flow more, there are so many unknowns I would rather be prepared.

@Ralph R. Thank you for your insight. I really appreciate your wisdom. As a newbie investor it is always great to get unbiased advise. 

  "In this case your property has some cash flow but will it increase in value?"

The property is probably in a C+ area near an active Air Force base. The area is filled with blue collar families. I do believe that the property value will increase over the next couple of years due to the county finishing up with the construction of the new Atlanta Braves stadium. But with that being said I am unsure how much or how long that will take. 

" if it wont cash flow at the $59000 price point why would you buy it with the idea of selling it as a turnkey?"

The original purchase price is $49,900 i wanted to offer $40,000. Recent comps in the same neighborhood sold for $59,000. I know it is not much of a spread but I was trying to think of all my possible exit strategies. Ideally I would like want to do a cash out refi and use that money to buy the next property. 

In a perfect scenario, I would like to clear $200/month in cash flow. After running the numbers multiple times I have concluded that I would need way more cash down than i current have to put up. As I am new I am not sure how important ROI would be in the Atlanta market. If I were to put up the entire $40k my ROI would be around 7%.

In your market have you seen $200 cash flow combined with a ROI of at least 10%?

@Sean Tarpenning I am still not 100% sure if I will be doing this deal but I will still PM you as that would be helpful for future deals. Thank you. 

@Doug Woodville If I do i will let you know. 

@Danny Olivo

I am being conservative with CapEx as the townhouses on both sides do no look like they are well kept. So i wanted to make sure I am covered. As far as pushing rents up, there is room but many of the town homes in the same area are roughly $790ish without rehabs.

@Christopher Phillips

The original asking price is $49,900. At full asking price it would still cash flow at $79/month. ROI would still be 7%.

@Christopher Phillips I did not calculate in closing cost but thank you for bringing it to my attention as that will change my return. 

I have not found a lender yet but wanted to see if it was possible. Although paying all cash would increase my monthly cash flow it would decrease my return. I wanted to find a good balance between cash flow and ROI.

Paying all cash for this property increases my Cash Flow to $277/month but a ROI of only 7%. I believe this is still a good deal for some people but I would like to see a higher return, but as a newbie I would like to know what requirement you look for when running the number.