All Forum Posts by: Zack Clopper

Sorry for the delay everyone has been a busy week.

@Nicholas Lanni Thanks, good luck on your first property.

@Clayton Mobley Thanks, I tried to make sure I fixed all issues whether small or large including he windows I figured even though tenants are paying utilities it will help them keep costs lower and happier like you said.

@Dennis L Lewis Jr Thanks Dennis, It is in Baltimore County in Essex/Dundalk area. I did all the work myself with the help of some family members but I learned a lot along the process.

@Suzette Brathwaite Thank you, can't wait for the next property.

@Dominique Poindexter Thank you, I hope to be able to write more success stories soon.

Hi Everyone,

I finally can say my first rental is rented out. I decided back at the beginning of the year I wanted to get into Rental properties but did not have the money but really wanted to do this. Started cutting out as many expenses as possible and was able to save up enough for my first rental. I went from being the typical person living paycheck to paycheck to now only spending 55% of my paycheck by cutting out all unnecessary expenses.

After putting in around 10 offers I finally had one accepted back in June 2017 and did not close till the first week of August due to lender delays. Since it was a foreclosure there was a little money to put into the property than I initially thought. I did not know I had to pay all transfer taxes could not get any seller help etc.

The details on the property are the below:

-Purchase Price: $80,000

-Closing Cost/Taxes/15% down: $20,575.46

-Interest Rate: 5.25%

-Mortgage/Insurance/Taxes/PMI: $566.09

-Capex (10%): $129.50

-Repairs (5%): $64.75

-Rent Loss (8.33%): $107.92

-Rent: $1,295

-Profit per month: $426.74

-Yearly Cash on Cash Return: 21%

I had to make a few repairs to the home before having it rented out. I had to replace the Windows (x9) in the whole house, refrigerator, stove, light bulbs, paint, flooring in bedrooms and bathroom, few other miscellaneous things around the home which totaled just under $3,500 for all repairs. I actually estimated it would cost around $4,000 in repairs before I bought the home so I was a little under budget in that aspect.

Master bedroom floor before :

Master bedroom floor after:

I had to make a few repairs to the home before having it rented out. I had to replace the Windows (x9) in the whole house, refrigerator, stove, light bulbs, paint, flooring in bedrooms and bathroom, few other miscellaneous things around the home which totaled just under $3,500 for all repairs. I actually estimated it would cost around $4,000 in repairs before I bought the home so I was a little under budget in that aspect.

So far I am all in at $23,991.73 to this property. Now that I learned the whole process from this home I set the goal to have another house under contract by the end of the year. Will be selling my “weekend” car to purchase a second rental as I know I can use the rental income to buy another next year if I choose to.

I always loved reading the beginner posts as I knew they were in the same boat as me so hopefully this helps someone out there take the next step.

Thanks,

Zack

Hi @Andrea Valenzuela I ended up going conventional on this property, I close on it in 2 weeks. 

I am funding the repairs from family members and paying 6% interest on the borrowed money so less money out of my pocket and don't have to pay 12% the hard money lender wanted. I been keeping track of all my money and want to write a post up after closing but should have less than $19,000 of my own money into the property including appraisal, inspection, etc.

Hi Everyone,

Buying my first investment property, the house i am putting an offer in on is $80,000 bank owned. The house needs the following:

-Vinyl plank flooring throughout home which i would install myself (850 sqft home)

(850sqft x 2.69per sqft = $2,286.50)

-New windows (11) 

($160x11= $1,760)

-Painted and spots patched where previous owner had screw holes 

(Est. $600)

From the estimates i have got seems like it will cost under $7,500 for repairs, i added a little buffer. 

The hard money lender i spoke with pre-approved me but since my first investment property the terms will be the below.

- Purchase Price = $80,000

- Loan Value = $72,000

- Hold back amount = $9,000 (1 or 2 Draws)

- Interest Rate = 12%

- Monthly Payment = $720 (72,000 x 12% = 8,640/12 = $720)

- ARV = 115,000

I am keeping this property as a rental, rent is $1400-1500, house is in great shape the last owner kept care of the property with many updates just needs these minor fixes. I believe i could have everything done within two weeks after closing and have a renter in there within a month as its a great rental market where I am buying. 

Would you guys recommend doing cash out of your own pocket with conventional loan as that is what i am leaning towards. However my realtor suggests i do hard money so i can just wrap everything up into the loan.

Thanks everyone,

Zack

Freddie Mac also has a loan program that will allow you to put 3% down on a second home purchase. I was planning to use this for my second purchase, when you speak to your lender bring it up (Home Possible Mortgage). Hope it helps some. 

Hi everyone,

Since joining 2 months ago I applied for a HELOC through SunTrust on my primary residance as i like doing business with them. The appraisal came back this week at 140k and I owe a little over 99k so they approved me for 12,900.

I thought the house value would have came back more but cant complain since only been here for two years and haven't put much money in. 

When SunTrust told me the rate though I thought it was real high from what I been reading but could be wrong they told me 4.25% plus prime which is 4%. that brings the loan up to over 8%. I haven't accepted yet and thought about trying a different bank but wanted opinions on here. 

I am in Baltimore County and would love to get others advice if they did a HELOC nearby on a primary residance.

Thanks

Thanks @Michael Evans and @Joe Villeneuve

Since the unsecured loan is only a 60 month term the payment is so large, I do believe they offer a longer loan to bring the payment down for the first 6 months still probably would only break even for 6 months. 

My main concern was even if its not with this property wanted to see if you are even able to refinance a house that the value is $50k or less to pull the cash back out.

Messed up n the title when I put >$50k.

Hi All,

Looking to buy my first investment property in PA and was looking to fund the deal with a Unsecured Personal Loan around 8.50-9.25% interest and the property is 40k. I was going to offer 25k cash and 2 week closing after I had the cash in my account assuming inspection came back good. The house does need very minor repairs such as paint, vinyl floor is pealing up in a few rooms and dining room has wood panel walls I was going to dry wall instead.  I can do all that work myself and not worried about that but even then the house will be worth less than $50k.  Similar houses on this street and surrounding streets have old in the range of $35-45k in recent months most needing repairs.

The rent will go between $750-800 according to a local property manager in the area. If I did the unsecured loan for 6 months at 9% the below is what the cash flow situation would look like:

Loan Pmt: $470

Taxes: $102.35

Insurance: $85

Vacancy: $60 (750 x 8%)

Repairs: $37.50 (750 x 5%)

CAPEX: $56.25 (750 x 7.5%)

Rental License: $40 (yearly)

Property Manager: $45 (750 x 6%)

Rental Income: $750

By doing this I would net (-$108.16) or (-71.41) if rented for $800 for the fist 6 months assuming I can get someone in there within a month to pay all the remaining bills. If I am able to do cash out refinance to pay off the loan with a 5% I/Y and 30 year term would net over $200 per month.

Does anyone know if I can do a Cash out refinance on a property that would only appraise at $40,000 (low end) and assuming they only give me 75% LTV which is $30,000.

Last point the only reason I am looking into this route is I do not want to tie up all my own cash in this project so looking at my other options for small loan amount.

Thanks in advance.

Zack

@David Krulac I was able to listen to your Podcast yesterday a lot of good information in it. Thanks for info on the meetings I will be sure to check them out. Look forward to meeting you at one of them.

Hi everyone,

I am looking to invest in the Harrisburg (17110) I also was looking at 17103 but looks to have high crime rates but rent is still high with lower property prices.  I am also looking into a near by town Lebanon (17046) area which seems like a nice suburb. 

I have been doing research on areas not to invest in where crime might be a little higher but it would be much appreciated if anyone could shed some light on any negatives about investing in the area.  I really want to make it to the investors meeting this Thursday 02/23/17 but might be difficult for me to make it on time as I work in DC. 

I have mainly been looking at Duplex's that rent out for 2%+ of purchase price. 

It seems Harrisburg has slowly been rebounding, i visit Harrisburg a couple times a year for different events and I think it is a nice area. 

Thanks in advance everyone for input.

Zack Clopper