All Forum Posts by: Travis Turner

Points is the fee charged by the lender in relation to your loan amount.

1 point = 1% of the loan amount

So a $100,000 loan that's charging 1 point would be a $1000 fee

I found the link so thought I would share it to get opinions. 

I'm not at all related to the seller just found it interesting and wanted to know what the potential downfalls might be with the numbers looking so good.

https://www.zillow.com/homedet...

I have read and seen others saying that the 2% rule when purchasing a buy and hold rental is too good to be true and is to be avoided.

I have recently seen a few places on wholesale websites that are well over 1% and some at 1.5 - 2%.

One of interest to me was a duplex listed for $64,900 and has tenants in it paying a combined $1150.

Although it doesn't show all pictures inside and out (exterior pictures aren't deterring to me) its obviously got some deferred maintenance I'm sure there should be extra CapEx to be budgeted for.

If rentometer verifys the rent is in the ballpark and its not falling down.... what am I missing?

Is that much of a spread indicative of a completely crappy or grade D property?

Seeking opinions from the property gurus here.

TYIA

I'm assuming this was directed towards me. If you click "quote" or "reply" it will tag me.

My main goal is CoC return with appreciation a distant second as I'm just looking for cash flow for future retirement while running my business, with no intention of selling.

Indiana, Ohio, North Carolina, Alabama, Arkansas and several others seem to have C class properties that sell for and rent for the range posted earlier.  They aren't glamorous but several (4-5) of them can be purchased for what you or I could buy 1 for locally.

To me for this price point the risk is worth it to find a rockstar PM (paying the 8-10% fee) in that area (getting a superior CoC return vs locally self managed with no PM fee) and build a good team and fly there once or twice a year to check things out in person. (Self employed so traveling isn't a problem and I don't want to and doesn't financially make sense for me to deal with maintenance on the rentals)(my personal position definitely not the same for everyone)

With the lower cost of living, the wages and costs of repair appear linear there.  Our local electrical scale is +/- $110 per hr and the above mentioned areas (depending on area) is $60's - $80's

I'm still a total Noob - this is just my analysis after a very short period of research and 6 or 7 books read.

Welcome.

I'm an electrical contractor and also studying a few areas to begin investing in.

With maxing out your wife's retirement, living within your means, and getting into rentals is a great recipe for success IMO.

I dont have any experience in the current ones.

However a contactor friend of mine did a remodel 3 yrs ago and the cabinets were part of the bid.

He told me he bid installing them at 3x the normal cost of cabinets.

When it was said and done the amount of time it took to install the kit of literally hundreds of parts he didn't make any money.

In my opinion they looked very low quality.

My current home I have gutted and will be buying from a local cabinet shop.  If you find a good cabinet builder, the price will be comparable (or cheaper) to what Home Depot sells them (after HD markup) but you will have a better finish quality that will stand the test of time.

@Cameron Whitehead

Our state has had an enormous influx of California's leaving that horrid state.

Other investors have also been finding this state a very low cost area and have been buying and flipping for decades.

His area is an amazing place for vacationing as well as mine so cities are actually limiting the STR market because its pricing locals out of the area driving land value through the roof.

In my area there is an incredible shortage of real estate. So much that every property that's listed under $400k is getting multiple offers the listing day.

A friend of mine sold his house last week. He contemplated selling it exactly a year ago but decided against it. He got exactly $100k more for waiting and did no improvements.....

I'm an electrical contractor and 70% of the new homes we work on are vacation homes.

I just finished one that was an oceanfront .75 acre lot purchased for $400k with a tear down home. They leveled the home and put an $800k home on it.

It's the owners 4th vacation home.

@Ben Nadeau

Based on the 1% rule if your into that P-ville home for $170k amd should rent it for $1750.

However that town should have some real good appreciation as more people are getting priced out of your town and heading that direction.

I'm in the same boat (and state) as you and am looking out of state right now for my first investment. None of the areas around here make sense to invest with the current sales prices and rent.

Has Bend cracked down on the STR market there?

That almost seems like a better idea there with all the draws there (I was in Redmond last week)

The markets Im looking at have homes from $40-$80k amd rent from $800-$1k per month.

Even though they aren't A class properties those numbers make more sense then buying a fixer here for $90k that needs $60k worth of work that rents for &1k.

Good luck

@Bill C.

Liability insurance is a must for any work done as others have stated. It may be your only recourse if they damage something of yours or a neighbors amd they arent willing to fix it or make it right.

Workman's comp (in my state) only applies if that person has employees. It isn't required in my state) as an owner operated company.

I wasn't required to have it until I hired my first employee.

As an Electrical Contractor the first thing I would recommend you do is go to the city or county jurisdiction and find out how much the permits would cost.

Developing land can be crazy expensive.

Here in Oregon when building a single family home its typically around $4k just for a set of plans to be drawn by an architect.

Up to $10k for building permits

In my small town its $11k just for the water meter and sewer connection. (On a SFR)

Excavation and site work is also not cheap. Underground utilities, grading, gravel etc. Digout for footings, foundations and drains.

Each property is > $50k before walls start being built on a 1500 sq ft home.

People here are literally buying properties with tear down houses where they can literally tear it all down EXCEPT one wall and call it a "remodel" to save all that development cost. (including myself)

I'm new to investing but well versed in construction.

In my opinion if you could find a foreclosure or off market deal to purchase that needs lots of work, you would almost definately always be $ ahead vs building new.

Vegas is obviously a different market but definately research the total cost before beginning.

Good luck in your venture!!!