All Forum Posts by: Account Closed

 No, I am starting to understand. So in your opinion, what cash flow would be considered a cash flow? I thought anything above $250 was good. I'll use that rental calculator on here and try to get a better picture.

 Gotcha. Was hoping for this one to be a good deal since the other properties in the area are actually worse in terms of cash flow.

 Lender will be lending a certain percentage up front to the contractor, already have contractor and lender agreed on payment on whatever house I pick. Won't see any of the rehab payment, goes directly from lender to contractor.

Thanks! Exactly the type of answer I was looking for! Now it's not going to be a flip but converting it to a rental property in the near future. My mortgage payment/PITI is going to be 1250 a month after renovation. Had a rental appraisal and he said easy 1750 after all the renovation.

The loan is going to be the new VA Renovation loan so it's a zero down, no PMI, renovation loan.

Is it still a bad rental property?

oh gotcha. Not sure if it’s different in other places, but here mortgage payment includes taxes and insurance. 

Thanks. I'm probably going to go thru with it since I still don't see how I won't make money off of it. In my opinion, having 400 dollars after mortgage (including tax and insurance) and property management is pretty good for my market. Also, the insurance is regular insurance not pmi (I don't have to pay PMI even with zero down).

 Like I have said: 1250 IS the mortgage. It includes tax (tax is only 0.5% here), interest, principle, and insurance. I am not understanding what you are trying to get at. I thought cash flow was after the mortgages minus vacancy/repair (although i will be having a free handyman since it’s part of the company perk I get if I go thru with a certain property management). Property management is only going to cost me 100 a month + half a months rent every turnover). 

@Caleb Heimsoth

@Caleb Heimsoth Gotcha. Now, what if all I plan to do is rent it out? We had done an unofficial rental appraisal (realtor is a friend of mine, and she got one of the managers in the Rental Property Management department looked into it). He said I can get $1,750 easy a month after the renovation plan I had in mind. Mortgage including insurance is going to be $1,250. That's a $500 cash flow with a zero down. Wouldn't that be a good deal? The area I am at is barely getting 0.9% on rental. Should I just invest elsewhere?

Sorry for all the question, just getting started with real estate investment and trying to figure everything out. 

@Caleb Heimsoth which is why I was wondering how you would price this property. My realtor based on CMA said it will be around $220k, but the issue why she says it may be wrong is due to the fact that this property only has 3 bedroom/2 bath while the properties on her CMA with the same Sq Ft has 4 bed/2 bath. Those with 3 bed/2 baths in the area but are 300-400 sq ft smaller are valued $180k. So do you go with the sq ft or the bedrooms estimate?

@Caleb Heimsoth No I am not. I am trying to rent this out after living in it for a year or two. It'll be under a renovation loan with 0% down (I am in the military) and only 5.25% interest rate. The loan is capped at $195k so I have about 80k to work with for renovation. My plan was to take out a HELOC if I have enough equity at the end and purchase another rental property.

First off, I am new to the forum but have learned so much. 

Some info:

I will be buying a short sale for $110,000 in need of renovation (estimate around $70k updating everything including electrical/plumbing)  that is in a very sought after neighborhood. However, the neighborhood has so much different types of homes that it is hard to pinpoint comps. The closest I have seen is in the $180,000 range (taken into account # of beds/bath and year), but the house I am looking into is 400 sq ft bigger, the yard is bigger, and it has privacy fence and bushes. The realtor is also having trouble trying to pinpoint potential rental and value due to the fact that $180,000 has 3 bed rooms, but if we try to match the sq footage with other homes, its at $220,000 with 4 bedrooms (the house I am looking at is 3 bed).

On top of that, there are currently no rental available in the neighborhood (very low turnover rate) with the exception of the newer houses but smaller sq footage which are going for $1 per sq ft. All the other homes that is the same year +/- 5 years and sq ft are not popping up for rent for the past 3 months.

With this type of mix neighborhood, how would you price the value and rental property? 

oh forgot, the house I am looking at is built in 1970s while the newer homes with high turn over rate are built in the 2000s. It's a buyers market here still so closing cost is paid by seller and houses are typically in the market for over 60 days if that helps any. I trust my realtor, but curious on the thought process and what ya'll would price this home at. 

Thanks!