All Forum Posts by: Taylor Knott

I just saw this thread. My name is Taylor I work for Greendiamond and live in Korbel behind blue lake. I've been viewing several properties with my realtor and was in escrow on two but the sellers weren't motivated to work with the amount of deferred maintenance needed. Recently I have been talking with my coworker about REI. We may partner on a commerical building and are looking at it friday. Prices are tough here especially with all the homeowner handyman work done to houses. Id love to join the Starbucks meet up

Wow that's cool this deal happened from taking a road trip. I also live in the area about 15 min. away. Eureka is a cool but tricky area...in the inspection process on a SFH that has 2 units. Good luck to ya!

Good afternoon BP I found a Duplex deal for a long term rental. On one lot are two units a 4-2 and 2-1. It comes in at just under 12% COC return.

List Price: $319k 

Total sqft: 3000

Total rent: $2000(4-2), $1400(2-1) may be a little higher depending on condition

Points by lender:  .75

Rate: 3.9% (Not locked in yet)

Closing Costs: $4000

Rehab: $5000(one unit hasn't been updated and the other has)

I am seeing the house tomorrow. I asked my realtor how I could be best prepared and to make his job easy. I had been thinking of questions like: Why is the seller selling? Why has rent been below market price? When were units last updated? And last major repairs.

My realtor relayed to me that the seller is leaving the country and is willing to carry the loan, rents were low with long term tenants, one tenant could still remain but could move out as part of closing. 

With that info now I have options for a conventional loan or seller finance and to remove the long term tenant to raise rent to market price.

Obviously I need to see the units tomorrow to fully know rehab but the seller finance seems like a great option to get creative with financing.

What would you do and why?

@Anthony Dooley I fully understand the higher Cash flow in lower quality neighborhoods. I was just saying potential repairs/rehab in at least my area could hamper COC return and cash flow initially. It's tough to find a good return here but I'm looking at a 4-2 with a 2-1 on the property that's just shy of 12% COC return. I appreciate your comments and input

Good afternoon,

The past couple of weeks have been great. Sought out and found a lender over a local one that was wayyyy too expensive. Interviewed realtors and found one to officially work with. This guy had plenty of local insight and is actively investing.

Currently I'm actively looking at properties and listings my realtor sends my way. Penciling out the numbers it seems for our market there are plenty of SFH as rentals that have positive cash flow after factoring in cap-ex maintenance, vacancy, management, financing costs and upfront rehab costs. I know all rules can't be applied generally knowing markets and even neighborhoods vary. That being said I'm finding properties that have COC returns in the 6-9% range. As a first time REI are there others out there who have found this the case for their market? And do you invest in them? Obviously you can find ones with better COC return, but may be in lower quality neighborhoods and may need a lot of repairs that would eat up or negate your COC.

I'm on the prowl, but don't want to get emotional and invest in a property with out proper consideration. Would love to hear thoughts from people in similar areas. 

I can say as a newbie there is unlimited information and rabbit holes to go down here that require zero. Also so many people to reach out and connect to. Personally I'm hoping to connect with fellow members in my area and possibly partner with some. But I've been amazed on what I can learn and absorb by just digging in

Upon doing some digging of the town I found lakeport is a tourist destination with the lake, resorts and casinos projected flat economic growth over the coming years, a population that has decreased a hair but remained relatively flat, the crime rate index is well over national average and has increased over the past 10 years even with increased spending for public safety. I also dug into the the property to find that it is in a flood zone and requires flood insurance. 

Based on the above I wouldn't invest in Lakeport and specifically with the property after finding out that it is in a flood zone.   

I'm not sure what people consider important/make it or break it indicators for a city. Do people invest in areas with the above factors I laid out? Or would it depend more on a neighborhood basis?

Again thank you for all the valuable time and input!