All Forum Posts by: Andrew Herrig

@Jessica Valdez What is your buying criteria? I find that for what I am looking for, it is difficult if not impossible to find on the market and I am forced to look for off market deals that you will not find on Zillow or Realtor.com (through my own marketing, other wholesalers, relationships with agents, etc.)

I recently did a refi at 75% LTV for 4.75% on an investment property. I think initial purchase rates are slightly lower.

@Michael L. I'll throw out another alternative to rentals I haven't seen here yet - investing passively in larger multifamily deals through syndicators/PPMs.

I understand where you're coming from in regards to stress and time. I have 9 units now, and while I won't say it is 9x harder than having a single house, it is definitely not easier. Certainly real estate has built my net worth faster than stocks ever could have, even if you cherry picked the best time period for stock market returns in history. But it comes at a cost, and at some point you reach an awkward stage where it's too much work to do on the side, but it doesn't provide enough income to replace your job.

If you're willing to do the hard work and sacrifice a few years, you can build up a pretty nice nest egg to do other, truly passive, investing. In my case, I will probably sell off a couple rentals, transition most of the others to property management, and invest the cash flow and capital gains into larger syndications (at least for now while mykids are young and free time is at a premium).

A lot of doors have been opened by building a small portfolio over the last few years, and I've learned that the relationships you make are more important than any single deal when it comes to growing your nest egg over the long haul.

I have used and been happy with Jason and Josh Spector at Align Foundation. 

@Michael Ndjondo makadi Finding 2-4 unit properties where the numbers work in DFW is challenging. There just isn't much small multifamily built here. I suspect Austin is similar, but I'm not as familiar with the market. 

If you are interested in cash flow I would go to Kansas. Texas has appreciated a lot the past 5 years and the best way to get something that cash flows here is to do some kind of value add, which is harder to do from a distance. 

I use Cozy for all but 2 of my rental units. One tenant still mails me a check every month (they don't have a computer), and another goes to a physical bank branch and deposits into my account (they don't have a bank account).

@Jinyu Shao I would be very careful with turnkey in Dallas. Do your due diligence.

Memphis Invest is a good turnkey company, but even they tend to price their properties based on rent ratio rather than comps. In many neighborhoods, you are paying a premium to the comps and I don't believe you'd be able to recoup your initial investment if you had to sell in the near future.

In addition to that, you need to calculate property taxes based on what the property is being sold to you for, not what is on the tax rolls. 2.7% of appraised value is a good rule of thumb. County tax rolls may say market value is only $50k, but rest assured when the county finds out it has been sold for $100k, your taxes will be double next year.

@Dane Ohlen Can you send me your contact at Legacy Texas bank? I am looking to do a HELOC or some form of LOC. Thanks!

@Tom Hacku The type of tenant that wants to live in a brand new, expensive, Class A apartment is vastly different from the type of tenant that wants to rent out a SFR or smaller, older multifamily. There is a market for both. It really depends what your risk tolerance is and what kind of tenant you are comfortable managing.

@Joshua Dees If it's worth $250k and you can get it under contract for 70-75% of that, trust me, the money will find you. However, it sounds like while he may be motivated, there is no reason for him to sell for such a drastic discount. Houses priced correctly in Wylie are still flying off the shelves, although it does seem that the market is slowing down some (maybe seasonal, maybe not).

I get leads all the time from people that have their houses listed for sale on the MLS but want it sold quickly for cash. 99 times out of 100, they are not motivated enough to take my offer of 70-80 cents on the dollar, but it never hurts to ask.