All Forum Posts by: Andrew Bosworth

Great job, @James Zito!  Congrats.

IMO, this is a great strategy, but you also have to be aware of the risks. While you are putting your property up as collateral, the chances of losing your house are low as the HELOC is based on a percentage of the equity, not the entire value of the property. Nevertheless, the quicker you can use the money and refi it back out, the better - most HELOCs have an adjustable rate. From my understanding, the new tax law no longer allows you to deduct the interest (if used for an investment property) - but I'm not a tax professional.

@Taylor L.

Thanks for including the links to @Ben Leybovich and Joe Fairless's articles.  

Many on BP, podcasts, books, etc. rightly suggest starting with friends and family - "Tier 1" as @Matt Faircloth calls it in "Raising Private Capital" (excellent book, Matt!),  In your opinion, if raising money, do new investors need to set up a syndication as soon as they raise any capital?  Or, as @Stephanie Martinson asked, is it enough to simply have a promissory note in place for each investor?  Right now, this is what I am doing for my projects, but at what point do you syndicate - whether it be for a large MF deal or something smaller?

Biggest expense?  

TIME!  

Should have started investing when I was 5 years old... 

@Ricardo R.

Thanks for the follow up.  Glad to hear things are going well.  Website looks good.

Congrats!

@Ricardo R.

Just found this thread today while looking for some info on MLOs.  

I know you didn't go that route, but how is the property performing for you so far?

@Ben Leybovich & @Sam Grooms

Congrats on the deal!  Great area of town.

For underwriting purposes, did you develop your own calculator or buy something "off the shelf"?  I'd be curious to know what your go-to tool is.

Hard to say without seeing the policy.  Other than the Property, what kind of Liability coverage did the agent quote?  Who's the carrier?  Feel free to PM me.

@Joel Owens

Your post is spot on.

Here's an example…  An 8 unit property in my target area came on the market unexpectedly last week. I say unexpectedly because I have had my eye on this property for a while and have reached out to the owner in the past (via mailers). The property checked every box for me, and as a bonus, the seller was even willing to offer financing. Only problem was that his numbers didn’t account for management, capex and sufficient maintenance costs (note, there is a big difference between looking at the prior year’s maintenance expenses versus an average year’s expenses – especially when the property is about to be sold!). When factored in, the price of the property was simply too high. The realtor tried to convince me that it would be a great investment, but despite REALLY wanting this property, I had to walk away.

Had I ignored these expenses and not properly underwritten for management, capex and maintenance, I would have potentially been in a bad place down the road when a major item came along, like the HVAC, roof, etc.

Moral of the story is to know your numbers and stick to them…no matter what.  Like you said, better to buy nothing and wait for the right property instead of buying just to feel like you're doing something.

Congrats @Shawn Lowery!