All Forum Posts by: Tyler Haskell

@Derek Jones@Pat McGrath

Thanks for the input. I had a typo there, the comps were run .5 miles away or half a mile. 

Spoke with him again and he mentioned they fixed whatever issue was with the permit but it has to be resubmitted for 800 bucks...

contractor is walking through with me in about an hour. Ill see what he thinks.

My financial strategy would probably be to get a 200k mortgage with 20% down and use a home equity line of credit or hard money or private money for the 80-100k rehab.

Hey BP,

I am looking at a duplex in a desirable area of Sacramento, wanted some deal analysis:

Story is a guy in Oregon owns it and built it out from a three bed single family to a duplex with 2190 sq feet. It now has a 2/1 and a 4/2, but they are some tiny rooms... Ran out of cash or didnt want to finish the build, and is selling. Wholesaler I met has it under contract for two more weeks. Asking 200k.

turned down 180k cash offer already (supposedly)

I did a walk of the outside with the wholesaler and peered in the windows. Partial new siding and windows around the house, new framing and studs, part of a kitchen and part of two bathrooms completed and thats it. Its basically completely gutted to the studs.

Had my realtor pull comps within a 5 mile radius. 5 duplexes sold within the last year ranging from 300-400k. most were two 2/1 or at most 2/2. But the actual street location may have been better, it is a good area but on a busy street.

My best conservative guess for ARV is 340-350. could be higher.

Had a contractor recommended by an investor approximate 80,000 for finished rehab. that leaves 60-70 on the table. he got to that number by seeing pictures and telling me a new build from studs is about $40 per sq foot.

Rentometer evaluations lead me to believe the 2/1 could rent for 900-950, and the 4/2 could go for 1300-1400 (potentially 1500) in that area. so....

flip: 200k cost 80k rehab (100k with perimeter work) 10K holding costs and fees potentially all in 300? ARV 340-350 as a rental aprox 2300 a month 280k mortgage at 4.5 is 1,450 a month self managed 25% down is 70k cash not sure on taxes or insurance but seems to work should cash flow at least 300 a month. Other considerations as I see it:
holding costs for complete rebuild may be longer, up to 3 or 4 months?
80k rehab does not cover outside the building, and the yard is a complete mess. a lot of concrete would need to be poured, new fence required, landscaping and grass needed, and as of now no where for anyone to park (old garage got turned into bedrooms) Not sure how much that would influence vacancy or value.

They have permitting that expires in August, but he mentioned something about a failed inspection for the permit and that it needs to be refiled (Not sure what that means exactly)

Very strange floor plan, not sure what the original owner was thinking with the layout, like he got greedy with the number of bed/bath.

anyways, thats what i put together so far.  Hows it look to you guys? this is definitely not a simple rehab or deal to put together, and has a lot of little nuances that may get me in trouble.

thank you guys for your positive feedback, including the ones I have worked with so far! 

@Joel Owens @Noel John Cabrigas @Drew Mim Mack

Thanks guys, I appreciate the comments!

@Robert Blanchard

Thank you Robert, I ended up doing a couple deals with another investor out there, and another with a turn key company. There are many of them out there and they all have a different take on preferred neighborhoods and types of houses. Good luck!

I want to give a shout out to Bigger Pockets and the entire community. This site is amazing, the podcast is incredible, and most importantly, the community is like nothing else! About 6 months ago I began devouring books, podcasts, and reading everything I could. Since then I have acquired 4 properties in Indianapolis, and everything is going great!

My past experience with the business world has taught me (And with the company I own) that you keep everything close to the chest. Don't give away trade secrets or numbers, don't let any one employee see the secret sauce recipe or the entire business process, and most certainly do not encourage and promote competition in your industry locally. 

But to my excitement, around BP and REI I see something completely opposite, and it works! The community is open, the people are willing to help and connect, and this in turn allows everyone to make more money and promote localized economic growth for that area. It truly is a small close knit community.

I can say that starting my journey in REI has been challenging, fun, and so far profitable! Lets continue to grow and succeed in reaching our goals as individuals and as a community!

Cheers,

Tyler Haskell

@Steve Vaughan

Thanks for the input. I had never thought of forming an S corp as a managing company, seems like a good way to keep the books under one umbrella. Thanks again!

@Bill Gulley@Curt Davis

Thanks for the input. I feel that I have done solid due diligence on the property, and as I said everything appeared fine when I looked at them.  

The properties will be financed, and the seller normally does deals just AS IS for the most part. He added the additional clause at my request because I thought it may be a good idea in case the inspection yielded something major. 

Like you guys said in different words:

Either the properties have 4500 dollar hidden problems, or everything is fine and the clause in there just because I asked.

Thanks again!

Hey all,

So I have four purchase agreements for out of state property that I plan on closing. In your opinion, how necessary is it to have an LLC set up? How about getting an investor friendly accountant and lawyer?

I am sure people do deals all the time without one or all of these components, but at the same time I know their are benefits to having these as well. Thanks again!

Tyler

Hey all,

I have three properties I am about to sign purchase agreements for, and it is an investor to investor sale.

Everything about the deal gives me a warm and fuzzy, less one condition. But it may very well be the standard. This is my first set of investment properties so I am not sure:

The PA has a contingency of AS IS condition for the houses. Below that at my request the seller has included the line "Inspection for informational purposes only" and below that "Only serious structural issues (over 5,000 dollars) may be grounds for terminating or renegotiating this contract"

I met the seller, flew to the state the property is in and saw the properties my self, nothing seemed wrecked about them. He has done some cosmetic and mechanical rehab on the properties already, and the seller has an outstanding reputation in the BP community and investor community. 

Should I be worried about this? Should I have the 5000 dollar issues clause lowered to say 2000 or 3000 to protect myself? Or is this PA format standard for investor to investor deals?

Thanks guys!

Tyler

@Craig Vondersaar@Shawn Holsapple 

Thanks for the input! I am beginning to build a better mental picture of the layout around Indy thanks to your guys help. 

I had not considered or seen anything in Eagledale so that sounds great. Looking forward to catching a flight over there and taking a look!