All Forum Posts by: Tyler McKendry

Whoa, thanks again. Really by all the advice I've received. Looks like I'm on to the next one. 

I will read that article on analyzing deals. A quick glance indicates its very informative.

I listened to a couple podcasts by J Scott and I've spent hours on his blog. I will have to check out his book!

thanks everyone

Thanks for the advice. The consensus that I've got on here and from a couple friends is that I shouldn't take on this large a project as my first project. I agree.

I should have mentioned in the OP that I would be making an offer contingent on inspection. I thought that was a given (but I suppose newbie investors would be prone to make a big mistake like that).

I actually have what I think is a pretty good idea for this situation. One that helps me and the seller. The idea:

Offer to buy half of the house for X$ contingent on inspection. Work with her (she is a wholesaler with rehab experience) to rehab the house. I could have the option to work on-site at $15/hr and we would also work with contractors. Once the house is section 8 approved or appraised value >$60k, I have the option to buy out her 50% for half of the appraised home value.

The above offer will do a great job gauging if she is selling because its a lemon, or if its for a logistics reason. It also helps me out a bunch because it allows me to get an inexpensive lesson in rehabbing with someone more experienced than me. Any thoughts on my idea / modifications I could make? 

Thank you for the advice Dave. I would be looking to fix up and section 8 rent out. They are asking 40k and rents are around 1200-1300 for chapter 8 in the area. I could spend a month or two in the house while repairing. Does the lowered holding costs and high rents make this deal look any better, or still not worth it?

I also think its worth noting that it is a rehabber that works 50-100 miles north of here that is selling the property. This is a bit unsettling as I can only imagine she would not be interested in selling if it was a good deal. 

I am eager to get started on something, but I feel this is probably not the best investment. I would love to hear some other opinions.

Hello,

I am brand spanking new to real estate investing. I found a SFR 4/1 in a ghetto+ area (I suppose a C-?). 1100 sq ft, 4BR 1bath, 2 minutes to major highway and looks out over a lagoon. It's possible to turn the laundry room into another bathroom.

The property was ravished by termites and seems to have lots of areas that need rehab. Assuming foundation/electrical/roofing is okay, could anyone give a ball-park estimate on the cost of repairs? I will be attempting to do most of the repairs on my own. (I am not handy, but a fast learner and good researcher).

Front area is a bit worn, I saw a few small cracks along the foundation, aswell.

This picture is from the bedroom that had the termite problem. This is part of the roof.

This the bulk of the damage. 

More of the termite-infested room. Pretty much 80% of the walls are shot. 20% of roof.

Kitchen looks in good shape.

There was problems like this in a few areas, mostly in doorways. 

Those were the major issues I could find. The house is loaded with **** and it will take a day or two to clear it out. The bedrooms may need new flooring and the place needs a paint job. The front/back yards could use some lawn care.

The sellers are wholesalers who just picked up the place before it was sold due to delinquent taxes. Places in the area go for $70-80k but most have 2 bathrooms. and they are asking 40k. I assume that puts the rehab costs around 25-30k.

My next steps are to research the property records in the court house. Also going to check the last roofing permit / flood zone info.

This is my first deal so any advice would be appreciated. I'm no expert, but the interior repairs look to be quite a bit less than 25-30k, right?

These would be in lower-middle income areas in South Florida. You can get something rent-ready for about 20% cap, otherwise they normally are a bit more run-down and need some fixing (few thousand).

I also agree that there will be more costs/turnover etc. involved with these properties. Insurance/taxes are higher, too.

To me, it makes sense to buy house(s) in cash (Either one property around 100k or two around 50k). Considering I have no income and no real estate history, I think it would be difficult to find reasonable financing anywhere.

I'm curious what sort of financing would be available once I have 2 cashflowing properties/100% equity/no reportable income. I assume banks wouldn't touch me. But perhaps private money at 7-9%?

Hey everyone,

I'm getting into real estate investing. I want it to become my primary focus and my primary source of income over the next few years. I have about $100k-120k in cash available for investment. I have good credit and zero income. 

My plan right now it to buy 2 foreclosed homes in Florida in middle-low income areas and rent them out. ~$50k, ~20-25% cap rate. After this is done, I will have 100% equity in 2 properties but only the properties to report for income. Will this put me in a dire financial situation? 

I have heard of "blanket loans" which is essentially a home equity loan over multiple properties. The last I heard, you needed 4 properties for this operation. Is that true?

Will some community/regional bank accept a person with 2 free-and-clear rental properties, good credit, no income, for a 20/80 mortgage? 

Someone I know and trust is looking for a 50k loan for 7-10 months. I've only done this once before and it was unrelated to RE. I'm a bit curious what you guys think about the deal, and if there is a solution to a problem I have..

Background: He's a partner on RE severance project. He's been involved in 2-3 of these deals and his partner has done several over the last few years. He needs to cover his end of the costs for a project.

Offer: The offer is a $50k loan. principle + $10k on completion of the project, which is estimated at 7-10months. Additional 2% every month it goes past+min payments. He's also offering a lean on the property (which I assume is free-and-clear, but may be worth <50k in severed+disaster scenario).

Risks:
Trustworthy guy, disciplined, and ambitious. He has a reasonable TDSR. Good credit. He has a fulltime job. I think he makes ~$70k on salary.

I'm unfamiliar with project related risks. Obviously not every deal is a slam dunk. I can cover myself somewhat here by getting the loan secured on the property.

The deal seems alright.

Problem: The 50k cuts into my working capital for the year. $20k-30k is okay for me.

I'm excited about doing a deal, and this one seems promising. I'm brainstorming solutions here.
Is there a way to sell part/all of a loan?
Can I secure my own loan on a loan contract? (Is this advisable?)
Overall thoughts on this deal?

Paul,

I would like to find a motivated seller and buy in cash, then sell on financing.


Hey John, I'm glad you responded.

I'm trying to sell on financing, and I did include this in my test ads. The test ads were listed online-- I suppose a sign out front and/or near by intersections would be would be an effective selling strategy, too.

Tampa does seem like a great market for MH investing. Everything from my initial research indicated it was a great market. At this moment I am quite discouraged. The last 2 leads I had turned out to be people posing as motivated sellers that were actually flippers trying to sell a home they fixed-up. Another lead I had was a guy who was completely delusional about this homes value and not motivated enough to need to sell. I'm sure these things are common. If this was really easy, everyone would be doing it.

I'm glad to hear the homes can be sold in <1mo with effective advertising and pricing. This is the first time I've heard this, but, I'm positive you know this market better than the other people I've asked.

I will drive through some more parks tomorrow and talk with people looking for leads.

Hey everyone,

I'm in the process of working on my first deal and I've run into a couple obstacles.

I'm looking for homes in the $2000-5000 range in a market that has lot rents from $400-550.

I tested the market for buyers and got very few responses (2 in 1 week by email). I did the same test in a much smaller market and for 4 responses in 1 week. I asked a mobile home park manager the approximate time a home is on the market and he said 3-4 months is typical.

Doing a deal in this market seems pretty risky to me. I can only see a deal being worthwhile if I buy from an extremely motivated seller.

Does anyone have any advice for this situation?

Belinda Lopez, Hello!

I'm still in research-mode.

My strategy as of this moment is to stick to mobile/manufactured homes. I'll be searching for good buys (motivated sellers) and sell with financing. It looks like great returns for minimal work with a small legal(contract) risk.

I believe parks are a bit outside of my capital restrictions and comfort zone at this time. I think single family homes or parks would be solid candidates for a market to jump into once I've got a feel for REI.