All Forum Posts by: Uendy Garcia

Margins aren't high enough. Older home, too many unforeseens, you don't want to do this deal.

 Keep emotions out of it, Its business. This is NOT a deal you should do. get it for 40k less then do it ,

Good luck 

@Uendy Garcia the last time foreclosure properties made sense was as profits were coming down because of overbidding the pros came down to accepting an 18% profit on the total purchase price and invested capital excluding personal time value. You are at around 11% projected profit a very slim profit and no room for error. Unless you love this property and if worse came to worse and you had to keep it would you be ok? Maybe a keeper and a sale another day.

@Uendy Garcia, to echo @Greg Kasmer's response, always look at COC on that initial deal. However, I think it is important to look at what you will do with that capital you generate. While a single deal might only be a 'base hit' versus a 'home run', it could set you up for something bigger and of course, each deal you do, you gain experience as well which will benefit you in so many ways.

So on the surface, this sounds like a solid deal, compare it to any other available options and if it makes the most sense, pull the trigger, kick it out and then keep growing into the next one.  

Hi Ryan, I like the "base hit vs a home run" analogy. As you mentioned before, the experience I gain with this deal could set me up for something bigger. It is a good start. Thank you for your reply.

I would only do it if you were okay holding on to the asset for the long term. $30k can turn into $8k or 0 really fast - whether that is due to unexpected costs - especially on an 1875 vintage home - or your ARV estimate being off. I'd be okay taking a swing for a $30k profit if it's a good buy and hold property. Otherwise, I'd pass.

@Uendy Garcia, to echo @Greg Kasmer's response, always look at COC on that initial deal. However, I think it is important to look at what you will do with that capital you generate. While a single deal might only be a 'base hit' versus a 'home run', it could set you up for something bigger and of course, each deal you do, you gain experience as well which will benefit you in so many ways.

So on the surface, this sounds like a solid deal, compare it to any other available options and if it makes the most sense, pull the trigger, kick it out and then keep growing into the next one.  

Sub $200k in fishtown with only $70k reno seems plausible but not the norm. If those are realistic numbers Im still not sure Id do a deal for $30k in the current market. These older rowhomes always have some issue that will equate to unexpected expenses. Happy to talk details if you want as I live and invest in the Fishtown area. 

That is the question I have been asking myself, Eric. I, now understand why some investors do not want to repair older homes.  I will be contacting you in private for some suggestions.                      

Uendy

@Uendy Garcia in general $30k projected profit is pretty slim.  There’s not a lot of margin for error in your assumptions. One oh-$hit during rehab can eat into that very quickly. That said, a projected $30k return may be a great opportunity if the hold time is short, if you want to keep your crew/contractor (or funds) working, if there is very little risk in the rehab, etc.  It also depends on how conservative your underwriting assumptions are.  The more conservative the underwriting the more likely you’ll exceed the $30k return.