All Forum Posts by: Trent Stone

As a Realtor in Utah and investor, I will flat out tell you that BRRRR deals are VERY rare right now. We have so many investors fighting for scraps right now. It can be done, you will just have to network a lot and analyze a ton of deals. Utah and SL counties are fierce and way over-inflated right now. Davis county is a bit better. The smaller counties have better margins, but less demand so the risk and vacancy is going to be higher. My partner lives in AZ which is about the same as here, so we are doing all our investing in Indianapolis right now.

I get a few wholesale deals a day sent to my inbox I can look at for you or I can also set you up on a hotsheet from the MLS if you want. Let me know if I can help, good luck!!

Oh you should shop for sure lol. Rates are at an all-time low. Average is about a 3.5% right now? Investment loan a bit higher but I don't see any reason why you couldn't get low 4's with your credit. I'd ask a GOOD broker to shop for you, they can usually get better rates. I might also recommend shopping at a few portfolio lenders, with your low risk they would probably offer you better terms and rates as well. Good luck with your first property!!

If you are just shifting debt from one place to another, the tax implications should be nothing. The only thing I can see is if you pay itemize your deductions and have an enormous amount of home mortgage interest on your current home.

I used to manage a tax office but I'm no CPA. I would really recommend reaching out to one who specializes in real estate, I'm sure they would answer you for free. Good Luck!!

First thing I recommend is to make sure his numbers are airtight, get a few opinions (I can refer you to an amazing Realtor we work with in Indy). Did he plan for contingencies? How well do you know him? How many CMA's have you gotten? What are average days on market for the neighborhood? Where is he getting his SOW from? Does he have a contingency fund built in the numbers? How is he selling and marketing the property? Are you paying agent commissions?

Second, you want to make sure you are covered. If you are strictly a debt partner then you will need to make sure you have first position on the property and there are no other liens. Does he have any skin in the game if things go sideways? I have a joint venture agreement I can send you that we use with our money partners, it can easily be adjusted for the terms you are seeking but it will get you on the right track as far as what you should be looking for.

IF his numbers are correct, you are all it at 74%ARV and on such a small deal, that is really not a lot of room. I am currently investing in Indianapolis as well and we shoot for 65%ARV all in but we won't go higher than 70%ARV. Hard-money lenders won't lend higher than 70%ARV for a reason and they usually require at least 10% of the purchase price down. So, the deal might be okay, but you really want to make sure it's a good to great deal if you are going to be at that much risk. Say he flips it in 4 months, you stand to make 7k on 115k. That's only a 5.9% return on your money, not spectacular for the amount of risk you are taking IMO. After commissions and closing costs, holding costs, etc. you are looking at less than 20k profit before he pays you, IF nothing goes wrong AND the numbers are completely solid....It's a little risky for my taste. We pay are partners a bit more and our margins are way bigger. As the person putting together deals, I would not even think about pitching this to anyone.

Long 2-cents, sorry, but I hope it was helpful. Reach out to me if you would like me to look over the deal for you or if you want a copy of our JV agreement. Best of luck!!

If it's owner occupied for 2 years they could qualify for 3.5% down FHA or even 3% down with conventional. Interest rates are at an all-time low, that would skyrocket the COC when they started renting it as an investment property. House hacking at it's best.

The numbers look a little loose, I might scrutinize them a bit more before I pull the trigger, but it could be solid.

I've analyzed hundred of deals, I'd be happy to look at some with you. After the first couple dozen or so you can start cranking through them quick. I screen deals first, then if I think it has potential I ask my Realtor his thoughts and anything else I should know about the area or property. If he likes it then I send it to my business coach(Fellow investor). If everyone likes it, I get my contractor to walk it and give me an SOW, then I'll throw it to a lender to make sure their numbers line up with mine.

I HIGHLY recommend the BP calculators, they are the most straight forward and best I've seen. I used to use excel but I got way too deep and nerdy with the numbers. Watch Brandon's webinars about how to use the calc and just go nuts with it lol.

So, my first thought is something is wrong with it unless it's in a war zone, your cap rate should be closer to 6% right now in the DFW area (maybe 7% if you are lucky and found a great deal). With the NOI you provided, your purchase price should be closer to $350,000. 21,418/.06 = $357,000.

Get an inspection, make sure you don't need any major repairs and scrutinize the rent roll. I'd ask for the sellers disclosures before you sign anything and make sure you include an inspection period if you need to back out so you don't lose your EM deposit. 

Let me know if you need anymore help, good luck!!

Yeah, if this is an investment property you should realistically expect to put down at least 25%. So, if you put down $75,000 your COC will be pretty low.

View report

*This link comes directly from our calculators, based on information input by the member who posted.

We are currently looking for a money partner for 1620 Fletcher Ave Indianapolis, IN, 46203. We have the property under contract for $160,000 and plan to spend $50,000 on the renovation for a total of $210,000, not including financing costs. The property was renovated in 2016 and we expect the repairs to be somewhat minimal. Our contractor will give us a scope of work next week and we will update our rehab budget accordingly. After repair value is estimated to be at $300,000, after holding costs our target profit is $69,814 and a turn-around time of 90 days. This deal is located right next to the exploding neighborhood of Fountain Square. Rehabs and new builds around our subject property have been sold between $350,000-$450,000. This deal has huge potential to sell for over $300,000. We have provided investment options for this project below. Investment report and sample JV agreement can be sent on request.

Option A: $20,000 and qualify for an investment loan to fund the purchase and rehab. $8,000 return after repayment of principal or a %20 equity share, whichever is greater.

Option B: Fund the entire estimated $210,000 project cost at %12 annualized interest and 2 points paid at closing.

If you have any questions please contact Melissa at 801-159-0519 or Trent at 760-977-0777. Let us know which option suits your investment preference and we will send a finalized JV agreement for signature.

Best Regards,

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Trent Stone

760-977-0777

stoneproperties.org