Rental Property Investor · Houston, TX · Member since 2015 · 75 posts · 66 votes
Howdy BP,
I am a real estate investor in Houston Texas and started full-time investing in 2013. I started a wholesaling and flipping company that has closed nearly 500 deals. I sold that company in September '18 and started buying small multifamily.
A couple of friends of mine recommended I start regularly posting here on BP. So I thought I would start this thread and see where it goes. Ask Me Anything, hopefully it is real estate related.
For someone looking to get started soon, if you had to redo it all again would you still start by wholesaling and flipping? I actually kind of want to follow the path you did. Flip at first then transition into rentals once i get some capital
I just closed this one with a partner. He gets 9% interest and 30% equity. Ill cash flow 900/month and have no money in the deal
Jason, on this deal, do you repay the full loan or 70%, as the lender maintains 30% equity in the deal. Do you have more details on how this is structured?
For someone looking to get started soon, if you had to redo it all again would you still start by wholesaling and flipping? I actually kind of want to follow the path you did. Flip at first then transition into rentals once i get some capital
I just closed this one with a partner. He gets 9% interest and 30% equity. Ill cash flow 900/month and have no money in the deal
Jason, on this deal, do you repay the full loan or 70%, as the lender maintains 30% equity in the deal. Do you have more details on how this is structured?
For someone looking to get started soon, if you had to redo it all again would you still start by wholesaling and flipping? I actually kind of want to follow the path you did. Flip at first then transition into rentals once i get some capital
I just closed this one with a partner. He gets 9% interest and 30% equity. Ill cash flow 900/month and have no money in the deal
Oh wow I really appreciate that level of insight. Did he also finance all the rehab for the property? If you don't mind me being so blunt, what sort of agreement did you have in place? Did you do most of the rehab yourself or did you just find an excellent deal?
For someone looking to get started soon, if you had to redo it all again would you still start by wholesaling and flipping? I actually kind of want to follow the path you did. Flip at first then transition into rentals once i get some capital
I just closed this one with a partner. He gets 9% interest and 30% equity. Ill cash flow 900/month and have no money in the deal
Hmm...I know the houses in TX will last longer than up here, but zero for cap-ex appears a bit unrealistic to me. Tell me what I'm missing here.
For someone looking to get started soon, if you had to redo it all again would you still start by wholesaling and flipping? I actually kind of want to follow the path you did. Flip at first then transition into rentals once i get some capital
I just closed this one with a partner. He gets 9% interest and 30% equity. Ill cash flow 900/month and have no money in the deal
Two things.
1) Is tax really that low? $100 / month seems awfully light.
2) Nothing put away for capex/repairs? Who pays for those...?
@Jason Bible Thanks for taking some time out for this AMA. Since your move to multi family properties, what's have been your biggest challenges?
Biggest challenges is lenders and partners. They've been so great to work with in single family that some do not want to make the jump with me to multi. Second is timeline, MF moves much much slower.
For someone looking to get started soon, if you had to redo it all again would you still start by wholesaling and flipping? I actually kind of want to follow the path you did. Flip at first then transition into rentals once i get some capital
I just closed this one with a partner. He gets 9% interest and 30% equity. Ill cash flow 900/month and have no money in the deal
Jason, on this deal, do you repay the full loan or 70%, as the lender maintains 30% equity in the deal. Do you have more details on how this is structured?
30% of the net equity. Net equity is about 20 ish, if we sold it today. Lender gets 6K
For someone looking to get started soon, if you had to redo it all again would you still start by wholesaling and flipping? I actually kind of want to follow the path you did. Flip at first then transition into rentals once i get some capital
I just closed this one with a partner. He gets 9% interest and 30% equity. Ill cash flow 900/month and have no money in the deal
Oh wow I really appreciate that level of insight. Did he also finance all the rehab for the property? If you don't mind me being so blunt, what sort of agreement did you have in place? Did you do most of the rehab yourself or did you just find an excellent deal?
He financed 100% rehab and purchase. We use an equity participation mortgage. I have a GC rehabbing the property; I've been to the property once. Found a the deal through one of my agents.
For someone looking to get started soon, if you had to redo it all again would you still start by wholesaling and flipping? I actually kind of want to follow the path you did. Flip at first then transition into rentals once i get some capital
I just closed this one with a partner. He gets 9% interest and 30% equity. Ill cash flow 900/month and have no money in the deal
Hmm...I know the houses in TX will last longer than up here, but zero for cap-ex appears a bit unrealistic to me. Tell me what I'm missing here.
This property is getting EVERYTHING. Capex should be close to zero for the first five years. If you look under the Vacancy, MR, and o&M that is where I hide cap ex.
For someone looking to get started soon, if you had to redo it all again would you still start by wholesaling and flipping? I actually kind of want to follow the path you did. Flip at first then transition into rentals once i get some capital
I just closed this one with a partner. He gets 9% interest and 30% equity. Ill cash flow 900/month and have no money in the deal
Two things.
1) Is tax really that low? $100 / month seems awfully light.
2) Nothing put away for capex/repairs? Who pays for those...?
1. its is, it should be about 3k/yr in the next few years.
2. This is a major rehab where everything is replaced, cap ex should be close to zero for the first 5 years. I dump all those expenses into the vacancy, MR, O&M column by using a simple depreciation calculation. NOTE: that since the new tax law, its possible to take an accelerated dep of 30% based on a handful of factors. Also if you are cost seg'ing your portfolio your schedule e is going to look very different than you p&L.
I made a few changes to reflect a 3200 tax liability and use depreciation as a charge against net monthly cash flow. It drops my net profit to 700/month and I am building a capex of about 1300/yr.
@Jason Bible I have a couple of SFR's that are cash flowing pretty well. I'm looking to get into MF but I can't seem to find a good deal that cash flows. I'm looking for a cap rate of north of 10%. Any suggestions on finding deals for MF? I'm working with a realtor that is searching for some off market properties, but considering they are from his realtor partner I doubt I'll get a deal. Thoughts?
For someone looking to get started soon, if you had to redo it all again would you still start by wholesaling and flipping? I actually kind of want to follow the path you did. Flip at first then transition into rentals once i get some capital
I just closed this one with a partner. He gets 9% interest and 30% equity. Ill cash flow 900/month and have no money in the deal
Hmm...I know the houses in TX will last longer than up here, but zero for cap-ex appears a bit unrealistic to me. Tell me what I'm missing here.
This property is getting EVERYTHING. Capex should be close to zero for the first five years. If you look under the Vacancy, MR, and o&M that is where I hide cap ex.
Sounds good. So are you expecting to sell after 5 years then? How many years have you been managing rentals?
@Jason Bible I have a couple of SFR's that are cash flowing pretty well. I'm looking to get into MF but I can't seem to find a good deal that cash flows. I'm looking for a cap rate of north of 10%. Any suggestions on finding deals for MF? I'm working with a realtor that is searching for some off market properties, but considering they are from his realtor partner I doubt I'll get a deal. Thoughts?
There are a ton of deals on market, just need to negotiate them.
For someone looking to get started soon, if you had to redo it all again would you still start by wholesaling and flipping? I actually kind of want to follow the path you did. Flip at first then transition into rentals once i get some capital
I just closed this one with a partner. He gets 9% interest and 30% equity. Ill cash flow 900/month and have no money in the deal
Hmm...I know the houses in TX will last longer than up here, but zero for cap-ex appears a bit unrealistic to me. Tell me what I'm missing here.
This property is getting EVERYTHING. Capex should be close to zero for the first five years. If you look under the Vacancy, MR, and o&M that is where I hide cap ex.
Sounds good. So are you expecting to sell after 5 years then? How many years have you been managing rentals?
I may keep them longer than 5 years. I do not manage rentals, I have a great property management company
For someone looking to get started soon, if you had to redo it all again would you still start by wholesaling and flipping? I actually kind of want to follow the path you did. Flip at first then transition into rentals once i get some capital
I just closed this one with a partner. He gets 9% interest and 30% equity. Ill cash flow 900/month and have no money in the deal
Hmm...I know the houses in TX will last longer than up here, but zero for cap-ex appears a bit unrealistic to me. Tell me what I'm missing here.
This property is getting EVERYTHING. Capex should be close to zero for the first five years. If you look under the Vacancy, MR, and o&M that is where I hide cap ex.
Sounds good. So are you expecting to sell after 5 years then? How many years have you been managing rentals?
I may keep them longer than 5 years. I do not manage rentals, I have a great property management company
Not really what I meant by the term managing - the line item for management did not escape me. All good.
Hi Jason! Thanks so much for transparently putting yourself out there. It's genuinely appreciated.
Given your level of real-estate activity in the last ~ 5 years can you share:
What is your current NET WORTH? (Using conservative estimates of the equity in your real-estate holdings)
How much TOTAL INCOME (EBITDA) did you earn, in aggregate, from all of your real-estate investments & activities A.) over the last 12 months? B.) in 2018? C.) in 2017? D.) in 2016? E.) In the last quarter?
For what amount of money did you sell your Wholesaling & Flipping company?
Hi Jason! Thanks so much for transparently putting yourself out there. It's genuinely appreciated.
Given your level of real-estate activity in the last ~ 5 years can you share:
What is your current NET WORTH? (Using conservative estimates of the equity in your real-estate holdings)
How much TOTAL INCOME (EBITDA) did you earn, in aggregate, from all of your real-estate investments & activities A.) over the last 12 months? B.) in 2018? C.) in 2017? D.) in 2016? E.) In the last quarter?
For what amount of money did you sell your Wholesaling & Flipping company?
Thanks! (and wishing you much continued success!)
Posting all that in a public forum is a real swell idea.
Tks for quick reply - Would you be ok to DM it to me? (or can I DM you?)
The question is germane, I believe, to know what all of the hard-work & effort you've put into Real-Estate over the last few years has amounted to - in the real world...
And, you did offer to 'Ask you Anything...' :-) ....
For someone looking to get started soon, if you had to redo it all again would you still start by wholesaling and flipping? I actually kind of want to follow the path you did. Flip at first then transition into rentals once i get some capital
I just closed this one with a partner. He gets 9% interest and 30% equity. Ill cash flow 900/month and have no money in the deal
Hell of a good deal man! Where does the money come from on the REFI loan? I calculated a vacancy rate of 3.5%, isn't that pretty low?
For someone looking to get started soon, if you had to redo it all again would you still start by wholesaling and flipping? I actually kind of want to follow the path you did. Flip at first then transition into rentals once i get some capital
I just closed this one with a partner. He gets 9% interest and 30% equity. Ill cash flow 900/month and have no money in the deal
Hell of a good deal man! Where does the money come from on the REFI loan? I calculated a vacancy rate of 3.5%, isn't that pretty low?
There is no refi. Straight private money loan for 5 years. Vacancy in this market is virtually zero
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
7y
@Jason Bible Gotcha! It looks like you run a lot of numbers on properties. In terms of real estate strategy would you consider this a long term flip> sell at year 5, or a buy and hold sell 10+ years?
@Jason Bible Gotcha! It looks like you run a lot of numbers on properties. In terms of real estate strategy would you consider this a long term flip> sell at year 5, or a buy and hold sell 10+ years?
i am not that strategic when it comes to long term planning. A lot changes in 5 years. Over the next 5 years Id like to own about 125MM in real estate. I should have about 25MM by the end of 2019. We have various exit strategies, however, we always leave the door open to holding, selling, or refi-ing.
This type of deal is a good example of great cash flow. I didn't even buy it that deep, and didnt have too. Just get them deep or with lots of cash and things have a way of working out. Id love to tell you that you can build a really slick spreadsheet and it will work out to a T. Thats not the real world.
On this deal I am considering removing the trailer and building another duplex. I think I can get it built for 125kish and gross rents of 1800.