All Forum Posts by: Terrence Evans

Hi everyone,

I am looking over the short term to "come home" (so to speak) to get a couple of rentals.  I am originally from the A - S. Dekalb to be more precise, but lived in LA for some time now.  So right now I am seeking 2 things. 1) investor friendly realtor that has general knowledge of the ATL area but who can answer questions about properties south of I-20 down to S. Fulton, Clayton Cty, and over east to S. Dekalb.  I am focusing on this area because the price points are better for me.  2) General advice on how to reach these goals.  I can set up searches in redfin all day long.  But the trouble is the metro area has changed a lot since I was a kid and maybe there are areas that I shouldn't consider/need to consider or other facts that I need to know - knowledge that I can't glean from those sites. I keep seeing comments that there are no good deals in ATL anymore.  However, my California RE mind sees the prices vs rents and am bewildered by such statements.

As of now, these are my desires in properties:

For each additional $100 of rent, the max PP can only increase by about $12.5k.

If you see immediate issues with these desires, PM me so that we can talk about it offline. I do want feedback as I am open to refining this list further. For instance, if you think a 40k 2 bdr condo is a good property, I am open to hearing the reasons why.

Thanks in advance and Go Birds!

So Cal flippers:::

Do you guys put down the standard 3% for EMD or some flat amount like $5K??

Let's say I come across a deal where the owner had to move quickly and they sell their house at a discount. It is worth 600k but they sell it to me for 520k. I use a private money or hard money loan to buy it. Btw the property needs nothing as it was rehabbed a year ago. I only have to do a basic paint and carpet rehab for less than 10k. So in all I have a property that on paper has $70k of equity, less any holding costs due to the P/HML.

So how can I get this equity out? 

• I could sell it now.  My profit would be cut in half due to commissions. But not terrible given that I basically am doing nothing to get said profit
• I could refi and rent it provided that i was cash flow positive.
• Is it possible to refi and either do cash out or get a 2nd HELOC to get money out? I thought cash out wasn't possible because I'm already above typical LTV maximums.

so let me ask a slightly current question.

Let's say I come across a deal where the owner had to move quickly and they sell their house at a discount. It is worth 600k but they sell it to me for 520k. I use a hml to buy it. Btw the property needs nothing as it was rehabbed a year ago. Ok what if I do a basic paint and carpet rehab for less than 10k. And instead of selling it, I do a cash out refi for its "arv price" (600k) pocketing 70k less closing costs and hml holding costs.  I could then live in it, rent it, and/or hold and sell at a later date as long as it still rises slightly in value. Any problems with this thought process? If this is common, forgive me.

ok.. that's what I thought. Bleh.

Chad, I wasn't talking about auxiliary closing costs just the down payment

I feel dumb for asking this given how I once had a mortgage.

But.. let's say you bought a house for less than it was worth. So you have equity built in. And let's use real numbers. This mythical house was bought for $76k but it is worth $100k. So when you go to a lender for the loan, do you have to put down any money? You already have 76% LTV. It's the same as if you bought the house for $100k and put down $24k (> 20%).

Forum,

I often see the phrase "buyer must verify permits".  What is the significance of this? If a change was done and it wasn't permitted, does the buyer have to get it permitted? Or is it just a disclosure when you try to resell it?

BP peeps,

I was wondering if any of you use design software to figure out your flips beforehand?

For instance I would want to put this prop in the software and try to redesign it there, since I am a visual person.

BTW, If you had to do 1 thing and 1 thing only, what would u do first?

Thanks, TE

@Will Barnard

@Verna M.

@CK Hwang

Thanks... I know the question is general but I was just curious what the response was going to be.

I was just wondering, all things being equal, is it better to do Redondo Beach vs South LA or Wilmington.  I just see a fair amount of supply in those areas.  Less so in the beach cities.  But then again my search parameters are probably incompatible with the Beach Cities too. And i do see alot of flipped props in those poorer areas.  There has to be a limit to the desire of people buying homes in those areas vs a beach city.

Thanks for all the responses

I was wondering from you guys if it was better to rehab and flip in modest/bad neighborhood vs doing the same in a better neighborhood?  Are the profits better, provided you could find a deal?