All Forum Posts by: Tim Campbell

 Hey Maurice, congrats!  I buy in the western suburbs and parts of MPLS.  Your numbers are similar to what I find and buy.  My purchase price is lower but my rehab cost is sometimes higher based on the condition of home.

Since it is a HUD home, you have to use their as-is contract. Although you get an inspection period, typical purchase contingenies are null and void. Therefore, get your contractor quotes but add contingency on top of that for unknowns that your contractors won't find until they dewinterize and open up walls. If you don't use the contingency...great...but at least your prepared. Also, don't estimate the numbers with a skinny rehab budget...too many unknowns. Go in fat worst case.

In reference to type of loan, I personally would rather keep as much cash liquid as possible. I would go hard money and use your 20% as reserve funds only. After the rehab, I would refi into a conventional loan for 70% of the ARV. This way, you have the liquidity for your next deal without having to wait to build up your reserves again. There is no seasoning on the refi since you already own the home. Use other people's cash and keep your 20% as the reserve. Your ARV vs purchase/project cost may prevent you from doing it on this one but this method is more scalable.

Congrats Nicole! 

Welcome to BP Daniel.  Look forward to connecting.  Let me know if I can be of any service.

Hey Maurice, I have some recommendations for contractors.  Inbox me what you need done and I can match you with the right one.

Have you tried a bank loan. You can do FHA if you plan to rent a unit (3.5% down) or conventional. Almost any bank can do it depending on your score and debt to income.

I have a few guys that do this in the area.  I'll inbox you their contact info.

Welcome to the forum Ryan.  Look foward to connecting soon!

Hey Nick!  Welcome to the forum.  There are some local bp meetups.  Probably run into you there.  Let me know if I can be of any service to you.

You were right in saying the prices are too high....especially your opportunity cost. You could essentially buy more property and almost double the cash-on-cash return (COCR) by investing at a lower price point.

Based on the info you provided, it sounds like you have around $100k to put down while carrying $300k in debt service per property.  Correct? 

If that is the case, the initial numbers don't support a scalable investment strategy. You could essentially buy an extra duplex and double the COCR with the same $100k available cash you have by investing in 250k-300k duplexes.

My duplexes are in the western metro suburbs and rents are $1200-1500 for my 3br units.  My Robbinsdale duplex rents for $1250/unit and I bought it for $195k.

As an agent & investor, I'm viewing duplexes in western suburbs (Hopkins, Crystal, Golden Valley, etc) going between $230-290k with rents in the range you listed for the 400k properties.

So...yeah...to me...you are right in saying it is too high.  I would stop and think about what is an acceptable rate of return for the cash you invest and select price points that allow you to get that rate of return.  

Following this thread.  Interested in seeing your algorithm as well for marketing purposes.