All Forum Posts by: Tony Hernandez

Each new meetup will be a different thread since BP only allows the event posting to happen when the thread is created. I cannot add an event to an existing thread. @Joshua Dorkin perhaps could fix that for us but he might be a bit busy...

@Mike Jury @Christopher Neugent

The next meetup will be in September. I'll be posting it soon. I think we are going to make the Fox and Hound our primary meeting spot.

Off market is where it's at but you have to be patient. A lot of people who call me know the market is hot and want full retail. If I was a licensed REA then I could potentially convert these to listings. For now, I just refer them out. I just have to wait for the folks who really need to get out fast.

@Shane Woods

 Good luck! And if for some reason this doesn't work out I know a broker here in Dallas that is looking to hire a go getter such as yourself for the Tarrant county area.

Thanks everyone. I believe this guy is sitting on a lot of equity and wants to cash out. Rental income doesn't make sense at his price but he will make some money (depending on how he bought) if he puts a sign in the yard.

I know I can't get it for $115k. I was just hoping to do a sanity check on my numbers. Property taxes in Texas are high.

The seller wants $270 which is market value. From a buy and hold perspective, I don't see a way to make that number work. Does anyone else?

• ARV: $270k
• Repairs: Paint & carpet. Year built is 1999 and has new roof and fence.
• Rental income: $1900 monthly (is average for market)
• Monthly Expenses: $496 for property taxes & $300 for insurance

Using BP calculator for an all cash deal I get:

• Purchase Price: 100k
• Cash on Cash ROI: 7.56%
• Monthly cash flow: $629.83 (assuming 4% vacancy, 5% repairs, 6% cap expend, 10% managment)

So from this I see that an all cash deal would yield great monthly cash flow with an OK cash on cash ROI. However, in order to get that number the purchase price is $170k less than if the owner puts a sign in the yard.

When I look at doing this deal with conventional financing I get:

• PP: $115k
• Cash needed: $30k
• Cash on Cash ROI: 6.76%
• Monthly cash flow: $166.82(same assumptions)

I can tweak this down to get a higher purchase price and keep cash flow over $100/month but then my Cash on Cash ROI goes to CD levels.

So my question is, is there a deal to be had for a buy & hold investor when the rents do not justify the market price? What would you offer this Seller?

The asking price is likely at retail or above. What would you do? 

Call him back and throw him a lower offer? 

Call him back and say "thanks for calling. Call me if you ever want to have a serious conversation?" 

Don't call back at all?

The Richardson / North Dallas / Collin county meetup for August will be back at Fox & Hound. I'm open to other suggestions since we did the same place in June.

The purpose of the meeting is to get to know folks in the area who are doing REI and network and share stories.

Looking forward to seeing you there!

Tony Hernandez

@Jon Klaus

@Jerry Puckett

@Hattie Dizmond

@Dana Chun

@Rick H.. I should expect that anyone I might assign the contract to will want to do the same. Since my plan A is to do the flip myself, I will be doing my own inspections and estimates. At least I'll know what things someone else will want to do if I move to plan B and can set the Seller's expectations.