All Forum Posts by: Nolan Payne

Hi BP! We just purchased our first rental property and the tenants just moved in a couple of days ago. The HVAC unit is original/very old and will likely stop working within the next year. However it still produces very cold air and works fine at the moment. We do have a home warranty which should help with repair or replacement but you know how those warranties go they try to do everything they can to not actually replace the entire unit and even if it needed replacement there would probably be a dollar limitation.

But my question is assuming it completely dies randomly... let’s say it would take two weeks to get a new unit ordered and installed. Obviously providing a property with heating and air is the landlords responsibility. So what would I do during those two weeks for my tenants? Pay for them to stay in a hotel which could really add up? Or go to Lowe’s and buy window units or portable units? 

Interested to hear your ideas and solutions in this scenario. Thanks again!

Thanks for the input and encouraging the thought process. In regards to my goals, I feel I like the idea of owning a home for little money into it after the refi and having an asset someone else is paying off. Making the quick 20-30k isn’t really a driving force, but then on the other hand the cash flow is a little light with the 20 yr mortgage but I don’t want to wait 30 years.

Really the BRRRR process is appealing and Having the house paid off and then selling and cash out later as a retirement plan is nice I think....

Hi BP! I hope ya'll are looking forward to a great Labor Day weekend! Here is the scenario and numbers for a property I've purchased at auction and I'm struggling to figure out which is the best play/course of action from here, and would appreciate ya'lls experience/judgement/advice! Details:

• Purchased home for $183,500 in cash (auction property so had to be cash)
• With repairs/rehab estimating $18,500
• ARV value $230-235,000
• If sold, would net around $22,250.

If held as rental, will cash out refinance and get $172,500 back, based on 75% of $230,000 appraisal. 4.2% interest rate for 20 yr loan, equals $115/month cash flow with almost all of my money back and 25% equity in the property.

But then I think to myself, if I sell the property for $300,000 in 20 years, we'd get a check for $300,000 (roughly), but we had about $200,000 into the property. So we gained $100K over 20 years....that just doesn't sound that great while cash flowing around $115/month.

Am I missing something? Which route would ya'll lean towards? I appreciate the suggestions and letting me know if I'm missing something.


 

Welcome David to BP! I am also a Realtor and just purchased my first investment property off of Carolina Beach Rd heading towards the beach in a community called Kirkwood at Arrondale directly off on the right side of the road if ya'll know where that is?

Bought it via foreclosure (didn't have access to the inside of the property) and wouldn't ya know it appears the previous owner is still in the home so we just sent her a 10 day notice to vacate letter....So needless to say this is getting quite interesting for my first investment property haha!

BTW Joe, what time is your meetup at the brewery?

I really appreciate all the insight and help! And thanks Stuart Hipp for the detailed guidance!

I'm moving forward with the property and have decided I'll do the eviction if needed. But, I'd love your thoughts/suggestions on how to handle the property itself given these numbers. This is my first investment property purchase.

• Buying the property for $183,000 cash
• Comps are in the $220-240,000 range, could easily sell around $230,000
• Assuming $15K of rehab, built in 2005 and since she's still living there, I know the HVAC at least kind of works etc....
• I'm an agent, so when I go to sell, only have to pay out 2.5% to buyer's agent, saving money there
• Rental rates for this property would be $1,700
• Expenses would be $400/month (literal tax numbers, HOA, replacement reserves etc so these numbers are pretty tight)

So would ya'll flip this and grab the profit and move on? Or rent it out? And more importantly, do I put debt on the property to get the majority of my cash back out??

Thanks again!

Thanks for the help! What is a typical cash for keys amount?

Hi BP Community!

I need your help! As of yesterday, I'm the winning bidder on a property on Auction.com. I drove by the property yesterday before bidding on it and it's still occupied. Looking at the register of deeds, the bank purchased the property back from the live, in-person auction early June, and then foreclosed on the property last week. There was a deed to the bank recorded June 18th, so in my mind that is when the bank officially owned the home and the previous seller is now in a home they don't own. I live in NC by the way in case that helps.

• So does the bank issue an eviction notice as of last week telling the previous owner to vacate?
• Does the previous owner have a certain time line before they have to leave?
• What happens if I close on the property in let's say 30 days and they are still there, do I proceed with an eviction? And on that note, can I do an "eviction" since that person was never my "tenant" since I was never their landlord? Or would they simply be trespassing at that point?

Any direction would be very helpful and appreciated!

Thanks Jake. The MHP is a bit concerning/new/out of my wheelhouse, but man, $22K a year it throws off in NOI, that's juicy... Although I'd have to put up $250K as well, so I guess it's all relative. Comparing the numbers, I'd get my money back in 11.3 yrs on the MHP and with the SFH I'm in it about $49K (down payment and closing costs) with no increases in cash flow, I'd get my money back in 12.7 yrs....

Very confident on numbers, already spoken to insurance agent for insurance numbers, all expenses are tight since I'm a Realtor in this area just down the road, so I'm very confident with those numbers and have factored in vacancy rates etc....

Hi BP Community (first post here)!! I'm excited to read/learn and grow together!

I'm a Real Estate Agent at the coast of NC near Wilmington and a first time investor. I've located 2 completely different investments and wanted your expertise/opinions/guidance etc to help point me in the right direction on which one to pursue.

Option 1: Single family home in a superb location.

• 3br/2ba about 1,200 sq ft, 2 car garage.
• Rent would be around $1,350/month.
• Asking $169K, could get it around $165K. One potential struggling point is that this would not be a "fantastic" deal. Comps are anywhere from $160-175K so I'd essentially be paying market price.
• I'd be getting a mortgage, 30 yr fixed at 4.62% for an investment property.
• It'd cash flow at $326/month and 8% Cash on cash return, 6.9% CAP.
• It's in a superb location/ properties don't last AT ALL and rentals are in high demand.
• Oh and this is literally 5 minutes from where I live.

Option 2: Mobile home park with 10 units (I know little about this investment type)

• Asking ~$250K and since these are single wides and I'm essentially buying the land with the mobile homes sitting on it, I guess it'd just be cash or seller financing. I don't have that much cash, but around half of that I could swing.
• 10 lots, 1 park owned home.
• NOI ~$22,000/yr
• This is about an hour from my home.
• Lot rent and all expenses are already set up and in place, so this would be essentially buying it and it basically runs itself (comparatively speaking).

Exit strategy seems easier/more secure for SFH vs MHP would be more investor oriented/hopeful.

What would ya'll do? I appreciate your guidance and look forward to starting this journey on BP!