All Forum Posts by: Suni O'neal

@Maugno M. None of these things are a surprise to me. I considered them in my offer. I put this post here because I’m second guessing myself as I mentioned. Surely, some buyers question their choices throughout a purchase as a checks and balances thought process. I posted here for anyone to add some of their experience if possible especially those who are local having a sense of the neighborhood. I did a lot of research on my own (which is not obvious from my post but I wanted to keep it as brief as possible). I can afford to have a relatively lower cap rate/cash flow because I have a great job at this time so it wouldn’t be the worst thing if the deal is not perfect but again I posted for any helpful comments.

@Kim Heretick, will consider your suggestions, thank you ! 

@Account Closed, thank you. I should say that I have a broker. I’m actually using roofstock for this home which could be my first problem, ha. I’m pretty much left to my own devices. I realize that I may be too eager.

I have a broker

Hi! I'm kinda panicking as I always do when making final decisions. Would so grateful for your thoughts on an offer of mine that was accepted on an out of state SFH. Getting cold feet and not sure if I should back out. I know that everyone has a different risk profile but I see conflicting reviews about the area being a C neighborhood, with crime and Hammond being known for "chasing our landlords". I'm not thrilled about a few things on second thought. Here are the stats:

109,900, new lease starting next month @$1195 per month, taxes $2000

3 bd/1 bath, 860 square ft, large fenced in lot @ 173rd and chestnut, between Colombia center and Purdue U.

Rehabbed foreclosure, 1955

New hvac, New roof, 1 year home warranty paid by seller

Initial expenses about $6000 for:

Appliances ( no stove or fridge)

AC (duct work in place but no central unit)

$130 monthly cash flow

6.29 cap rate

COC 5.2%

(Vacancy , 8.5%, capex, 8%,Management 10.5%, maintenance/repairs 8%)

I’ll be taking a mortgage out on it. I know it’s not a deal but am I overpaying? Comps seem to be from $98k-$120. Should I run? Not happy with having to put in appliances and the AC which was promised to the tenants.

I’m also thinking about the future and an exit strategy which I believe is important. Neighborhood may not have much appreciation and the curb appeal is just ok. Would likely go to an investor rather than a family if all things remain the same in 10-20 years. Wondering if selling would be tough ( of course can’t predict the future)

THANK YOU SO MUCH I’m advance for responding to this nervous nelly.

Hi! I'm kinda panicking as I always do when making final decisions. Would so grateful for your thoughts on an offer of mine that was accepted on an out of state SFH. Getting cold feet and not sure if I should back out. I know that everyone has a different risk profile but I see conflicting reviews about the area being a C neighborhood, with crime and Hammond being known for "chasing our landlords". I'm not thrilled about a few things on second thought. Here are the stats:

109,900, new lease starting next month @$1195 per month, taxes $2000

3 bd/1 bath, 860 square ft, large fenced in lot @ 173rd and chestnut, between Colombia center and Purdue U. 

Rehabbed foreclosure, 1955

New hvac, New roof, 1 year home warranty paid by seller

Initial expenses about $6000 for: 

Appliances ( no stove or fridge)

AC  (duct work in place but no central unit) 

$130 monthly cash flow 

6.29 cap rate 

COC 5.2%

(Vacancy , 8.5%, capex, 8%,Management 10.5%, maintenance/repairs 8%)

I’ll be taking a mortgage out on it. I know it’s not a deal but am I overpaying? Comps seem to be from $98k-$120. Should I run? Not happy with having to put in appliances and the AC which was promised to the tenants. 

I’m also thinking about the future and an exit strategy which I believe is important. Neighborhood may not have much appreciation and the curb appeal is just ok. Would likely go to an investor rather than a family if all things remain the same in 10-20 years. Wondering if selling would be tough ( of course can’t predict the future) 

THANK YOU SO MUCH I’m advance for responding to this nervous nelly.

@Angelique F. , I haven't purchased a home yet on Roofstock but have been following the listings for over a year now. I may be someone who is conservative and it sounds like you may be as well so I felt like I should let you know about some trends that I am noticing.  

My standards must be higher than most because I rarely see a home on Roofstock that makes my personal cut offs. When I do see a home that reaches my comfort zone ( usually just barely), I have lost the bid to others who are likely overpaying and possibly making cash offers. This may be out of despair as people are moving money from the stock market to real estate. I will continue to be patient and cautious before buying a home. There are definitely no deals to be had here and by the nature of the product and our current times, the seller benefits more than the buyer. I'm ok with this because  he website offers convenience and is great for someone like myself who works over 60 hrs a week. You may not be ok with this because it affects your bottom line number and you losing some money for this convenience.

Roofstock does not have accurate tax info. Yes, you should always check for myself but you would think that it would be very easy for Roofstock to get this info from the seller. Taxes were listed for 1500 when they were really 4000 ( huge difference) when I checked out this particular home with the tax assessor. It would be a great business model to have such info up to date and when you don't..it makes me question the website entirely. Also, you will see that their numbers for capex and maintenance are typically low which inflates the COC. Remember you can and should change the numbers yourself to see if the the COC is still worthy.

Someone shared with you how to check the tenant ledger and this is a great tool. I am glad that this is offered upfront and I appreciate that Roofstock makes it easily accessible. I am not interested in inheriting anyone who has late payments ( or section 8 but that is my personal preference). I ignore most homes that have tenant's with late payments because I don't need the headache at least not this early on.

I'll use anywhere from 5-12.5 % for maintenance, cap ex and vacancy rates and still the COC tends to be low. You will rarely see a home in a low crime area (check trulia's crime map to start with). Roofstock's rating of a neighborhood is a generalization.

I usually just look at the homes that are listed for "open house" and ignore the rest. The better deals sell within the open house period and the rest are junk to me (maybe that's harsh but again my opinion). They added a nice search tool that you can save with your preferences and get email alerts. 

The age or state of the roof, HVAC etc used to be given to help you make a better decision. For example, it used to be that a roof was listed as excellent condition having 5 or more years of life left but now things are categorized as "functional" or not functional needing repairs. Read through the inspection report and use their pics to help you but all reports vary in the amount of detail which can be frustrating.

Now all of this is under the assumption that you are certain type of buyer that Roofstock is catering to..it's not for everyone. There are slim pickings out there for a potential buyer like myself and even slimmer pickings on Roofstock but I remain hopeful. It is a great concept and I enjoy using the website. All of the best.

@Junior Soares

You should be so proud of yourself. This is inspiring. Is there a method that you recommend when it comes to assessing whether there is a good rental demand in any given area? I know that ultimately calling a local PM in that area would be helpful but I wonder if they are being honest. Thanks again for your story

@Jason

@Jason G. Thanks so much for all of your time on detailing your purchases through roofstock. I've been following their site for a few months now with attention to the newer listings (open house) and I tend to see low COC's in 1-2 star neighborhoods. I am not interested in doing cash only deals where the COC appears to be higher. What criteria are you using because I might be setting my criteria too high and maybe I'm not being realistic. I'm looking for 10-15% COC, 20% IRR, class B, 10% maintenance,10% capex, 8-10% property management and I am not banking on appreciation.

Thank so much!