All Forum Posts by: Zachary Sexton

Thanks for the response, @Lisa Williams. 

My wife and I are looking for properties we can buy in Tulsa:

• for cash
• at 75% ARV (e.g. buy at $50k, rehab $25k, appraise at $100k)
• in B class neighborhoods (e.g. Kendall Whittier, Bryan Mawr, Maple Ridge)

and rent to:

• families (or students)
• at 1% of post rehab price per month (e.g. $100k value. $1,000 rent)

After the rehab and placing a (long term) tenant, we'd refinance and hold long term for cash flow. BRRR as they say in these parts ;-)

If you or anyone you know can help us find and purchase these kind of deals, we'd love to connect. And what type of deals have you/are you interested in investing in? 

Are you still finding deals? I'd love to see some of them in the forums. My wife and I are looking to buy BRRR properties with cash in Tulsa.

Who is investing in Tulsa? And what is your most recent deal?

Just trying to get a thread started and meet people that are investing in Tulsa.

Also any recommendations for:

-Real estate agents

-Property managers

-Contractors

Thanks in advance, Zack

I’m working with a distressed seller that is trying to avoid missing a payment on the mortgage. As far as I can tell they are not in foreclosure yet, but they’ve had their utilities shut off due to nonpayment.

Do y’all know of any way to check if the electric and plumbing is in good condition when the utilities are shut off?

Update: Did we buy, negotiate or walk? 

On Wednesday February 13th, 4 hours before the end of our option period, the owner got back to us on our post inspection requests.* Instead of fixing the front unit's roof, replacing the leaky bits of cast iron plumbing and taking care of a handful of other requests we made, he offered to take $20,000 off the asking price.

Since we had lined up a low down FHA 203b loan, we knew the house would not pass appraisal unless the major plumbing and roof issues were taken care of before closing. After a little negotiating (e.g. we found a roofer who was willing to do the work and be paid at closing by the title company so neither of us would have to go out of pocket on the $7,000 expense), the clock ran out and we terminated the contract.

Since our agent and lender work on commission, the only two out of pocket expenses were the inspector ($600) and our option fee ($750).  As of now, I'm feeling good about the real estate tuition. You really pay attention to the lessons when you are about to be on the hook for hundreds of thousands of dollars. What we learned about the home buying process and the local Austin market in the past two weeks greatly outpaced than the last 6 months of reading and podcast listening I've been doing as mental preparation for the jump into real estate.   

Topics include:   

• property taxes
• plumbing
• roofing
• estimating rehab costs
• condo regimes
• making an offer in a seller's market
• inspections
• understanding important financial ratios
• permits
• contractors
• getting quotes
• home insurance
• home warranties
• renter contracts
• apartment leases
• economic opportunity zones
• surveys
• rent rates
• getting references

I hope to post a little write up on my mini-journey to solidify my learnings and help new local investors with the roller-coaster ride that is getting your first property under contract. 

Thanks again for those who offered their advice on this post and via private messages. It really helped. 

*Is there a name for that?

 Thank you!

 The 50% rule was actually pretty close to my actual numbers.

Negative $550-ish a month. And this thing won't be cashflowing for 16 years!

The only happy exit strategy is a successful flip. 

Last night my wife came home and we talked about what we'd be able to do/save by living there, scaling down the renovations, testing the AirBNB waters and enjoying living next to our friend group once more. We took our $120,000 reno budget and cut it to $80,000. I also got more conservative with the ARV ($640,000 vs $700,000).

The idea of tying up $100,000 is scary. Unless one of us starts pulling in a higher income at our day job, that would likely mean 3 years of more minimal contributions to our retirement accounts and missing out on that potential market return.  

But it does seem like we have some profit potential after our 3 years slow reno gamble (@ 4% growth w/ the more conservative $640,000 ARV).

The $20,000 or so growth we could have seen in the market (assuming a 7% return) looks like it could be $85,000 in real estate at 4% market growth; $52,000 at 1% growth and $13,000 at -1% growth. 

I guess the question comes down to, is the risk and opportunity cost worth the education? I'm leaning towards yes... but I'm open to more feedback. Especially form the accountant with a property right next to mine. Hint. Hint. @Beau Fannon ;-p

It does seem like a pretty big swing. This is the part of town we like and feel confident in the trajectory. It is  expensive dirt thought.    

Any suggested resources for learning about code compliance? I'll hire out for anything that needs a permit, but I'd still like to get my hands dirty! 

The units are livable, but they would not make us money. Our principle, interest, MIP, taxes and insurance run about $3,300. Current rent is about $3,000 and (from the looks of it) not likely to go up.

I like your point on making sure everything is up to code. Electrical, plumbing, HVAC and siding were the things we wanted to hire professionals for. Kitchen, flooring, paint, gutters, patio, windows and landscaping where the things we were planning on doing ourselves.  

We budget pretty meticulously now. Our current savings rate from our W2s is about $2,000 a month. We also have about $10,000 in liquid assets after closing. What's an example of a major expense that you'd be worried about? Vacancy is one we can handle. Mold is the one that scares me. The house did have more moister than it should in certain parts of the house. Is there any way of figuring out if there is one of those time bombs hiding before we close?  

Thank you. I think you are right about the rent. The supply for rentals seems to be ever increasing with those huge condo/apt builds in the area. We plan on living in the back unit. The front unit's lease is up in July and they've indicated they'd like to stay. The profit we were hoping for was in the increased value we'd add by fixing it up and selling them as separate SFUs.