All Forum Posts by: Jeff Johnton

What part of Iowa are you in? I'd need a few more details to see if I can help

Good morning Joseph,

Have you 'driven for dollars'? Drive around and look to see what multis are out there. Once you get the address you can find the owner and at a minimum, send a letter. There's potential for that to open a conversation. 

You could dedicate 1-2 hours per week on that or just take the long way home when you are out and explore different areas.

Check Craigslist for rentals. If someone says they are looking for a tenant, call them and ask if they are interested in selling. They may not be at this time but six months down the road could be different.

Good luck and I hope it goes well!

Henry,

Are all the properties in the Council Bluffs area? Are there any in the Des Moines metro? Are there any in Omaha? If so, I may know a potential buyer.

I have five investors that average about $13,000 each invested with us. I gurantee 9% interest/year to them at a minimum. They get to split 20% profits on flips. They've always made more than 9% though. I make a 5% interest payment in January every year to them. I did one flip with their money in 2021 and paid 5% for 2021 interest. Their return was over 9.25%. 

I am probably a bit generous though.

LTVs I've seen are usually around 65% of ARV. Points are in the 2% - 4.5% range with a 6 month pay back period. The interest rates are in the 8% - 10% range. Usually monthly payments but a lump sum when the house is sold. Depending on the project when you take out the loan you can get all cash at once or you may need to do draws and show/tell your lender the work that has been done.

As far as prep, your lender will love if you have 2-3 comps showing how you came up with your ARV. Also, be willing to learn. The lenders usually have some good advice as they've done this before.

 

Thank you Thomas, the last sentence is what I am getting at. This is exactly what I'd want. Payoff the families of the investors if something were to happen. Is there a specific name for that type of insurance or is this basically a sort of term life insurance?

I have a life insurance question for the community. I'm looking to purchase an apartment building with a few investors. There would be a minimum amount of time I'd want everyone to keep this investment so I wanted to have life insurance as a way to help protect everyone's investment. I would prefer not forcing everyone to go out a buy their own policy to cover their portion but rather have one group policy available for everyone where a payout would go to their beneficiaries in the event of a death. 

Is this something any of you have done before? Would this be considered a group life policy? Any information would be extremely helpful.

From the repair side, based on what you've presented, I'd guess double your budget for repairs. The plumbing and electric themselves can total near $15,000 depending on what needs to be done.

3.5% conventional loan? This isn't FHA? If this is FHA, what you are doing is illegal as you have to move in within 60 days and live there for one year.

https://mortgagesolutions.net/2021/06/16/fha-mortgage-rent-out-home/

You can get stuff done but generally at a little slower pace, even the interior. 

In Iowa we can get occasional breaks from the cold where some outdoor work can be completed on a more 'normal' pace. Workers/contractors may put some work off until higher temps (painting, roofs etc...)