All Forum Posts by: Ryan Walley

@Marques J. Great safety net.  I wonder if this is offered in other states.

Looks like a super deal with little money down (as opposed to all cash).  If there are any more like this let me know!

Hi Holly Ann,

Congratulations on getting close to your first deal!  Finding a contractor and a property manager, if needed, are the two most important parts of investing.  Any property can be made or broken with a bad contractor or PM.  Look for those who come with referrals, hopefully from people you trust.  You'll want to find a balance of cost vs skills and professionalism.  A kitchen gut could run anywhere from $5k to $25k+ for the same finishings with different contractors.  Beware of contractors who are available to start right away, or obviously who need a large deposit up front.  Contractors are notorious for getting paid, starting a project, then never finishing.  Let us know how you make out and if you have specific questions along the way.

Ryan Walley

Licensed Broker

Parker Cardinal LLC

1. Pay down high interest debt or any past due bills. 2. Invest most in B-C multi family homes near blue collar college town near you (or apt bldg) to generate 12-15%+ cap rates for cash flow. Fix up as needed to max your cap. 3. Flip a small SF home or condo to get experience in development and valuation.

If you don't know the numbers, I meant. Why is new construction selling for $400k+ but you say the ARV is $375k max? Do you have older comps to prove this?

You want to hear from a local broker/developer/investor if you don't ribose numbers. To me from Buffalo, NY it also looks like a skinny deal. Not a lot of margin. Maybe that's all you get in PDX. I love Portland and understand their sales prices relative to the rest of the country. When I flip, I like to look for a min 35% return on my capital after expenses. This is more like 10%, no?

Let's go Buffalo!

Sounds like a great macro-level plan!  The key now is to take that first step and buy that first place.  Look for something renters would appreciate, and buy knowing that this won't be your FOREVER home, just your forever cash flow device!

Assuming you don't have this under contract yet, correct? If it's an MLS listing, a renovation loan isn't looked at as a strong offer typically if there's others offers with more down or all cash.

Some banks will finance a reno, but it's tooth and nail to get them to do it.  I haven't had any luck, but many people will say they have.

Lastly, I bought my first two deals (buy and hold) via traditional financing so I haven't done a HML, and I only put minor repairs in cause I'm not handy. If you are, and you are confident in the "Renovate" portion then a HML is probably a good idea. It's risky and I would usually suggest a first time investor use a traditional loan with better terms, or save the cash and invest it into the project when you can afford it.

I'm familiar with this house.  It has a gross cap of over 33%.  Unheard of.  Most homes have gravitated to a 25% gross return, but this home is under market a bit I believe.

Remember the neighborhood has higher than average crime.  Higher the cap, higher the risk.  You need to know your market, screen tenants well, and have a great manager on site to ensure the property stays in good shape and the tenants stay happy and paying.  Or else you will deal with vacancies, thefts, evictions, etc. more than you would on an 8% cap deal.