All Forum Posts by: Mike Lynch

If tomorrow you suddenly had around $300,000 cash, would you:

Try to purchase several $50,000 homes and rent them out?

Purchase a couple $100,000 homes and rent them?

Buy fix and flips and rentals using the banks money?

I have even thought about trying to create a huge website like VRBO or Homeaway, with a great web designer but have no idea if that would be a disaster, and I like to play it safe.

I have thought about starting some sort of Elder Care company? A friend of mine started a small Pawn Shop with $150,000 nine years ago and now has 5 of them in Virginia, worth millions, but that's a ton of work, and being robbed or shot is very possible. My friend always has two loaded pistols on him 24/7 and was robbed at gunpoint several years ago.

I know more about homes than anything else, since I have worked on them for 30 years.

At present, I have read around 15 real estate books, some purchased from Authors on this site, and have watched dozens of real estate videos online. Everyone claims to have the best idea, and the more you learn, the more confusing it gets.......Information Overload.

My goal is to stop being a plumber, as it is killing my back and bones, as soon as possible. I feel like a 48 year old Pro Wrestler that has been beaten to a pulp when I wake up in the mornings, from too many years or jack hammering slab homes to repair water leaks, hauling water heaters, toilets, and bathtubs up stairs, and digging ditches. I really need to slow down on the heavy duty 40 to 50 hours a week labor, and get out of this mess as fast as possible.

I know, I know, more information overload with my questions, but I would still like to hear more and try to make a decision and take my first step soon.

Thanks JJ,

The trailer is on a nice brick foundation. It is near several lakes. I am a plumbing contractor, so I do appliances, carpentry, plumbing, electrical, and siding all day on my job getting to pipes for repairs then installing everything back in place. -- I don't do HVAC, roofing, or carpet. I know how to repair it, just not sure how to buy it, due to lack of experience in that area.

I guess the main question still is, how much do people normally offer on an REO? ( Below, asking price, or higher )

Thanks Tom!

I don't know but I will check that out!

I know there is at least 2 bids on it. My realtor talked to the listing agent. Now, I need to figure out what to bid.

Good Morning!

I am looking at what seems to be a good deal? --- But I am confused, as usual.

I have found a 2005 - 2400 sq. ft. - 4/2 Doublewide on 1.5 acres of land in TN. It is in a rural area near a small town. The REO price at the moment is $41,500. I did some GIS research and here's what it says.

2015 Parcel Values:

Other land   ---  $19,810

Other Improved  ---  $145,600

Taxable Total  ---  $165,410

Recent comps are between $80,000 to $140,000

All of the homes in the area have a tax value between $65,000 and $130,000, but are around .75 acres, instead of 1.5 acres like the one that I am talking about.

What can you tell me about these numbers? --- Does anything look strange? --- Am I missing something?

I will go and see the home on Monday morning. If everything looks decent enough to move forward, and neighborhood looks okay, I am thinking about placing an offer. My budget for repair costs is around $20,000 total give or take. How much would you offer for this home if the price right now is $41,500. It has no appliances.

Here's how I came up with $20,000 for repairs. I did a sort of worse case scenario ( new appliances around $6000.00, new carpet and flooring $6000.00, new HVAC $6000.00, or paint, or plumbing, or roof repairs. I don't know, I am just wild guessing but have not seen the property yet.

Thanks!

Thanks!

I have been looking at a lot of HUD homes online. Is there a reason that the photos are so bad? They will post just a few, usually blurry and bad angle, photos of each home. It reminds me of the Bigfoot photos, always a bad shot. If they had some better photos, it might make me actually drive a long distance to see the homes. ----- Just Curious? --- Some people take great pride in their work and I guess some just don't care at all.

Thanks!

Thanks!

Our river house is totally paid off. It is worth between $300,000 and $400,000. To produce at least a 10% cap rate on it, I would need to get $3000.00 per month rent, and I do not see that happening here as most people pay around $1200.00 per month rent. If I take out a home equity line on it up to 80%, if possible, I will need to hold it and the holding costs will be $6000.00 per year ( electric, water, insurance, taxes, maintenance ) If I rent it, the renter might tear up $6000.00 worth of stuff in a year putting holes in the walls for pictures, damaging hardwood floors and carpet, overflowing the toilets, etc. Nobody has really suggested to take out a home equity line on the river home and use that leverage to buy more properties.

Say I keep the river house? The projections for market increase is around 3.5% for 2017. So, maybe next year the river home will be worth $10,500 more than it is right now. That will cover the holding costs. Maybe I can just use it as a bank keeping it pristine, using it's leverage to by some flippers for a while, or am I totally off my rocker? -- Right now the market is climbing. If I see the market heading back south, I will dump it. A home that nice could easily have $10,000 to $20,000 damages per year from a renter. Would this strategy make any since at all, or would selling it be the best option? -- I'm digging, I'm digging! :) - I might not be very smart, but I am trying to figure something out.

Okay, seeing what I have to work with, do you have any suggestions. I know that there are dozens of ways to do it. I am trying to get my mind wrapped around the best way.

Thanks!

Okay, let's say safe and relatively fast?

Here's one scenario that I have been tossing around this month after reading Rental Property Investing by Brandon Turner and a couple of other books.

Say I have around $250,000 cash in the bank, and I am very handy in repairing homes. I can buy at least 3 mobile homes with land for $120,000 furnished or semi furnished in NC. I can rent them out total for $2100.00 per month. Then take half of that, which is $1050.00 and put it in a rental savings account for CAPEX / taxes, insurance, maintenance, etc. I put the other half, $1050.00 per month in a rental checking / investment account.

I take $70,000 and pay off the loan for my primary residence. That leaves $60,000 from the initial $250,000 plus the $1050.00 coming in from the rentals each month. Now, I am 100% debt free except for the monthly normal water bill, electric, gas, insurance on the primary.

So, I now own 3 mobile homes with land and one 3/2 brick primary residence. I have $60,000 left in the bank and $1050.00 rental income each month after putting the other half in savings. I will have no home loans, car loans, equity lines, or equity loans. No debt period and a great credit score! -- The slate is clean!

What would be a good next safe move or suggestion, or do I need to start all over, rethink, and totally do something else like buying some more homes to fix and flip first? Is the mobile homes idea a decent strategy or dumb strategy. The more books that I read the more confused or dumb I seem to become, for some reason. :)

Here's a YouTube video below, of the home that I am working on right now that we intend to sell to start buying other properties. 3 bed plus bonus room and 4 full bathrooms. We paid $118,000 for it and have put around $80,000 in it. My wife and I have done about 90% of the rehab labor. All of the neighbor homes and comps are selling for around $300,000 to $400,000. It should be finished in about 2 months or so. Once it is sold, I want to get the ball rolling on my investing career.

Shallotte River House

Thanks for your feedback!