🚨 Deal Breakdown 🔥🎉 · Real Estate Learning Community

🚨 Deal Breakdown 🔥🎉

This is the power of collaboration over competition!

Just want to share some updates with you all! I know this group is not only nationwide but apparently global, which I am incredibly humbled by and grateful for.

This deal is in the upstate of South Carolina just 30 minutes from Greenville, S.C.

I am buying this property for $140,000 cash. It’s a 3 bed 2 bath 2 car garage built in 2000 in great condition. Added some interior photos below.

I will be paying $30,000 to Jonathan Miller as we worked on this deal together and I wanted to see what’s the most I can pay him as an assignment, because who doesn’t want to see others win.

$140,000 + $30,000 + seller & my closing costs = $175K roughly

I am going to spent about $6,500 - $8,000 on strong “upgrades” to the property such as, all new LVP consistent throughout the entire home, white interior paint throughout entire house, upgrade all cabinet hardware, fans and light fixtures to a more modern black aesthetic, paint all cabinets (kitchen & bathroom) white, pressure wash exterior, fix a few loose bricks on the front porch and refurbish the back deck.

Let’s call it total $185K when you include paying my private lender for a month or two funding it all and things like utilities & insurance.

The house is worth in its current value $250K and after it’s simple upgrades will appraise for $255K (conservative comp especially being on 1 acre and all other lots have less land and 1 $255K with less land and less square footage)

I will then do a rate and term refinance up to $180K, which is 70.58% of ARV but any DSCR lender will give me up to 80% LTV if I needed it.

2 reasons I only want to go up to 70% $180K is so that A.) I meet my 1:1 ratio on the debt service. (DSCR lenders want to know the the property can rent or cover 100% of the total monthly mortgage of “debt” hence DSCR (debt service coverage ratio)). B.) If I only borrow up to 70% of the overall value, the few thousand in fees can be financed within the loan, allowing me to close on my refinance with zero out of pocket.

Now, remember I said I’d be all in $185K but truthfully I’ll be all in $175K and just using a few thousand dollars of my own cash for the repairs, holding costs, paying my lender, etc so you still want to include your total costs in the deal.

After the refinance, my mortgage at $180K and some change for fees included, on a 30 year amortization at 8% interest + taxes & insurance will be roughly $1,600/month and the property rents for $1,650-$1,750. (Not all great buy & holds mean $400-$500/month cash flow day 1. Remember there are many benefits to a good buy and hold and also rents go up but mortgages stay the same.)

I’ll net $50/month for now but on a strong 3 bed 2 bath in great condition and a great location as a long-term rental, although this will be a mid-term rental so really cash flow will be more and at least $70,000 of equity with a few thousand dollars out of pocket.

Part 2 is being able to subdivide this property after I complete buying and stabilizing this property, shown in the bottom image of the parcels.

Based on having 100 feet of road frontage, being in the county and only cutting the lot in half, I will create a .5 acre lot out of the 1 acre and do what’s called a partial lien release, which will make that lot free & clear.

I already spoke to my GC/builder who agreed he could build me a 3 bed 2 bath 2 car garage 1,600 sqft for about $110-$120/sqft which brings my total build cost to about $200K.

2025 new construction value will be at least $320K.

Same scenario, $320K x 70% (.7) = $224K and so I will pay off my private short term lender with a 30 year long-term mortgage to own 2 rentals side by side in retail market condition, in a great location and a few thousand dollars both totaling together about $170,000 in equity day 1, paying and blessing someone with a $30,000 assignment and holding these for years and years growing cash flow, networth and wealth.

This is obviously the Real Estate Learning Community, so I wanted to share some insight on some of my deals happening right now.

Please don’t hesitate to ask any questions! Not only did a write a great real estate book available on Amazon, everyone knows I’m an open book in general!

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