All Forum Posts by: Annchen Knodt

Hi BP,

I've been brainstorming ideas for low-budget and creative direct mail pieces (I have already sent 3 rounds of postcards to absentee owners, but I think it's time to change it up a bit).  Since I have access to a high-throughput color printer, it occurred to me that printing out creative tri-fold "self-mail" pieces (no envelope, sort of like a brochure) might be something worth trying.  Of course folding, sealing, and adding postage would be quite labor-intensive, but I think I might also have access to a folding machine, and in any case those are the sorts of tasks I don't mind doing while watching TV or something.

I've done some research and think I have a decent understanding of how to get bulk mail rates with folded self-mailers, and how to save even more on fees by adding a barcode (probably by using the free USPS IMsb tool?), CASS-certifying your list, pre-sorting, and using pre-canceled stamps.  I imagine that the direct mail companies out there leverage these bulk-mail discounts for their economies of scale, but I'm wondering if anyone has any experience with / thoughts on whether doing something like this is worthwhile for more of an individual smaller-scale operation.  I'm thinking it's not likely a great return on time investment, but wanted to at least consider it.  

I'm also curious if anyone has thoughts on how the tri-fold self-mailer might perform for marketing, as I've not really heard it discussed much.

Thanks!

Hi @Pedro Santos - I live in Durham and have bought my first rental in nearby Burlington (between Durham and Greensboro). It seems like most of the good rentals there would be a little bit above the 65k limit but there are certainly lots of other towns in the greater Raleigh/Durham area that would be more in that 20k-65k range. Rocky Mount (to the east) is one that comes to mind that is popular with investors.  I would recommend connecting with at least an investor-friendly agent and probably also a property manager in one such town, as they will be the best qualified to help you learn about the market and help you figure out whether your desired strategy will work there. Good luck!

@Austin Largusa I'm just starting out but have gotten some recommendations for Coastal Credit Union, and from speaking with them so far I think I'll be happy with using them for a refinance I'm doing on the property I'm currently working on.  Not sure how well they'll work for out of state investors but maybe worth looking into.

Congrats!  Thanks for sharing.  I'd be curious to hear about the returns on investment you are getting in this community, if you wouldn't mind sharing that as well :-)  I've mostly written off trying to find investments in Durham since the market is so hot and the price-to-rent ratios aren't so great, but it looks like you've found something that works.

Hi Stephanie,

If you haven't already, I'd recommend checking out the Brazos Real Estate Investors Club (especially while you are still in CS): https://www.brazosreia.com

Good luck and congrats on getting an early start on investing!!

Annchen (Fighting Texas Aggie Class of '09 :-)

I'll be there - looking forward to it!

Thanks so much for your detailed response, @David Patchett!  I will definitely check out those forms, that's super helpful.

70% LTV for a refi is about what we are expecting, good to hear that that's what you found in your research also. We don't want to over-leverage in general, so at least as we understand it now, those numbers should work for us.

And, I should have mentioned in my post that my father lives right there in Brenham, and that's where I grew up :-)  We also have some confidence in the town's growth, hence why we went ahead and pulled the trigger on a direct mail campaign to find motivated sellers there and hopefully get some deals on buy-and-holds.  Cool that you have family there and get to visit - we're in the same boat then!  I hope you get to enjoy some Blue Bell ice cream when you go :-)

Thanks again!

@Rick Pozos, that sounds like a really solid and reasonable plan - thanks for sharing your experience!

@Ronald Rohde Thanks for your response!  Yes, we have started a relationship with an attorney in College Station (I live in NC but my father lives there in TX).  Good to know that you provide escrow services - the 3 months up front is a good tip and hopefully we can offer that to the seller.  The loan is a conventional 30-year fixed from Chase with ~23 years left (at a low rate), but other than that I don't know too many details yet.  Subject to appeals to us because the rate on the loan is lower than what we can get now, and we have a good amount of our cash tied up in other properties at the moment. Are there other features of a loan that would make it a poor candidate for subject to?

Thanks for your input, @Rick Pozos!

Re the numbers on this one, we actually do think we can get it for ~70% minus repairs - purchase price is $65k ($55k loan balance + $10k down payment to seller), our conservative rehab estimate is $40k, and ARV is around $150k.

Does your strategy of giving the sellers a 5 year balloon mean that you are paying their mortgage for 5 years, and then you pay that off, presumably with a new loan just for the balance at that point? I can see how that would be appealing to the seller. The motivation behind our cash out refinance idea is mainly to get back the potentially large amount of cash we will have in the house for the rehab (could be $40k), making it kind of a hybrid "subject to" / BRRRR deal. Perhaps we could offer the seller just a 1 year balloon, where we get a new loan in a year after the place is rehabbed and rented - at 70% LTV we should be able to pay off the seller's original loan and pull out all of our initial cash investment.

Thanks again!