@Tove Fox - Residential Real Estate InvestingPros:Lower Entry Costs: Easier to get started with less capital required.High Demand: People always need homes, making demand relatively stable.Easier Financing: Mortgages are generally easier to secure with favorable terms.Simplicity: Easier to understand and manage, especially for beginners.Flexibility: You can use it as a personal residence or rent it out.Cons:Tenant Turnover: More frequent turnover leads to vacancy and more management.Lower Cash Flow: Income potential can be modest compared to commercial properties.Emotional Buyers: Residential prices can be influenced by emotions, leading to price volatility.Maintenance Burden: Landlords often deal with repairs and maintenance, which can be time-consuming.Commercial Real Estate InvestingPros:Higher Income Potential: Stronger cash flow and higher returns are common.Long-Term Leases: Tenants often sign longer leases (3-10 years), reducing vacancy risk.Professional Tenants: Business tenants tend to take better care of the property.Valuation Based on Income: Prices are based on the income the property generates, not market emotions.Shared Costs: Tenants often cover property expenses like taxes, insurance, and maintenance (via triple-net leases).Cons:High Entry Costs: Requires more capital or partnerships to get started.Complex Management: More expertise is needed; you may need a professional property manager.Economic Sensitivity: Commercial properties are more sensitive to economic conditions.Challenging Financing: Securing financing can be harder, with stricter terms and higher interest rates.Zoning and Legalities: More complex regulations compared to residential properties.Key Differences:Risk: Residential tends to be lower risk, while commercial offers higher rewards but with greater risk.Management: Residential is easier for DIY investors, while commercial properties usually require a team.Scalability: Commercial properties are easier to scale, offering more potential for significant cash flow increases.

Budge for unexpected repairs.

I am hopeful they will want to work with me to get things repaired and updated to validate appropriate rent increases.

Let’s break it down with the 70% rule to see if it’s investor-friendly:ARV: $190,000 (taking the middle of $180K-$200K)70% of ARV: $190,000 * 0.7 = $133,000Minus Estimated Repairs:Roof: $20,000AC: $4,000Additional repairs (general estimate for a property needing updates, say flooring, paint, minor plumbing): $10,000-$15,000Total Repairs: approx. $35,000Max Buy Price for Investor: $133,000 - $35,000 - $10,000 (wholesale fee) = $88,000Since you’re getting it for $91,000, you’re close, but to make it irresistible, consider negotiating the purchase price down a bit further.

In a text book case you'd buy a property for half of its ARV (after repair value) and then spend 25% of ARV on rehab and generate 25% equity.

The title company has never once responded to any of my phone calls or emails about this.  

Purchase price: $2,800,000 Cash invested: $560,000 The property is a three-story multi-family residential building with six independent units, initially facing significant challenges due to poor conditions.Renovation Investment Summary:- **Structural Repairs:** $250,000- **Kitchen Modernization:** $100,000- **Bathroom Updates:** $50,000- **Exterior Improvements:** $100,000- **Holding Costs:** $50,000- **Property Taxes:** $30,000- **Insurance Costs:** $10,000- **Management Services:** $10,000

I am NET cash flowing just over 1k (includes maintenance, repairs, cap-ex, vacancies, utilities), which is pretty good considering this is in SoCal.

A seller could also refuse to pay any concessions for buyers closing costs, appraisal required repairs, etc. but it would be to their own detriment.

That experience gave me a solid foundation in property management and repairs.