All Forum Posts by: Noah McPherson

@Steve Vaughan @Jay Hinrichs Thanks for the feedback guys. I see the importance of avoiding debt on things that aren't cash flowing assets, and I'll make sure I fully understand the terms of my leverage also. As for the 3 months of debt service plus a a years Capex and repairs, that was exactly what I was looking for. I'll make sure to implement that into my management strategy.

Hey BP, 

I have two questions I think would be important for me, as a real estate newb, to have a better understanding of. First, at what point would you consider a person Overleveraged? would you judge if a person is overleveraged by their income their bringing in and/or how much liquid assets they have in banks, mutual funds, etc.? Secondly, I would like to know how much I should keep in reserves? For example, I have a duplex. How do I calculate the amount of reserves I need? I understand the answer is probably subjective, but I think this is an important topic, as it keeps your portfolio in a safe position.

@Lucas Miles Thanks for the info. I didn't think of using my local credit union. I realize they may be able to do a lot of things larger banks can't. Since I have a good relationship with them, I'll try them first. As for the business plan, I'll get on that right away. 👍👍👍

@Lucas Miles yessir. That makes sense. My intention was to find a deal not listed on the MLS. That means I'll most likely have to close faster and with cash. Also, if I find cash, I can avoid the seasoning period when I refinance through my local credit union. I was just hoping people could suggest ideas for finding financing for a newbie. I know there are hard money lenders. How else could I?

Hello BP,

I'll keep this simple. Can you guys open my mind to financing options for newbie BRRRR investors? I currently own one rental I bought off the MLS.

@Andrew Postell Thanks for all the suggestions. Yes, I do have a primary residence, which is a duplex I'm house hacking. I do like the partnering suggestion. Finding someone to fund a deal would be possible, though I don't have much of a track record. Would lenders be more likely to two people partnering on a deal? On account of them having two incomes?

Hey Guys,

I'm looking to get into a BRRRR deal next. First, I'm going to go after hard money (though I'd do the deal by any means of financing). As a new investor, I see a potential problem with using hard money, as I don't have a track record. So, I'd like any advice I can get about approaching a hard money lenders for financing. How can I best help them out? Do people typically bring them deals from distressed sellers? Foreclosures? I'm looking for any bit of information that can help me bring them the the kind of deal they want and present them a deal in a way that solves their problem. Thanks

Hey guys,

I'm a buy and hold investor from Duluth Minnesota. In four days, I'll be closing on my first rental property, and I'm planning to close on my second deal next June. For my second, I'd like to start building a relationship with a hard money lender. Does anyone have tips on securing hard money? I know organization is important when approaching lenders, so I'd most likely make an analysis to show the lender. However, it'd be really nice to secure financing before I found the deal. Any tips on that? Maybe a sample analysis? Any advice would be greatly appreciated.

Hey Everyone,

I'm a beginner investor from Duluth, Minnesota, and I'm closing on my first duplex July 8th. Since I'll be house hacking, I'm considering renovating the unit I'm in and doing some exterior work as well. If my goal were to put my money into the house in the hopes of refinancing rather than saving up for a down payment, what would be the risks involved. I'd like to get a house this time next year, and I'm wondering if that strategy would get me there.

@Jeffrey Griffin

Hey Everyone,

I know this question was forever ago. I'd just really like to contribute to a discussion 🙂

First, your property will have a gross rent amount. After deducting all expenses from your gross rent, you will be left with your cash flow (profits). I found gross rent by contacting my duplexes selling agent.

Second, make sure to deduct these four basic expenses.

1.)Mortgage - Mortgages can be calculated simply using online mortgage calculators

2.)Property Taxes - Historical Property tax info can be found on the MLS or websites the property is listed on. Zillow and Realtor.com both provide annual property tax expense.

3.)Homeowners Insurance - Homeowners insurance can be estimated by calling an insurance company and asking for a quote.

4.)Utilities - Finding utilities is as easy as calling the utility companies and giving them the properties address. Don't forget things like Trash.

Third, these last five may be the most important for you Jeffrey. These are some beginner investors forget. I know I did.

1.)Property Management - Will you ever hire property managers to manage your property? Budget that in.

2.)Maintainance - Fridges break. Toilets break. Don't forget to budget that in.

3.)Capital Expenditures - Want to upgrade your house? Maybe new siding? Kitchen updates? Budget that in.

4.)Vacancy - Don't forget the money you may lose when turning over a property to new tenants.

5.)Taxes - Last but not least set aside some money for uncle Sam.

There are a few things more unusual things like HOA fees that I haven't had to deal with. The main things will be in the second two sections above.