All Forum Posts by: Becca F.

@Elise Bickel Tauber

I've been contacted by wholesalers so many times in the last 3 years with 2 SFHs. I can appreciate their motivation and hard work but I don't have a favorable opinion of them. One of them constantly texted me after I told her no multiple times, like she can't even remember I told her I wasn't interested. I started telling them I'll sell if for 3x the market value since home prices and interest rates are higher I wouldn't be able to replace it with a similar house at the low price I bought it for - this is for my SFH in the Midwest. They had no reply lol

Two of them offered me well below market price on a house in the San Francisco Bay Area. I saved the letter this one person mailed me - the offer was so insultingly low that I thought it was joke. If I was a completely uninformed person about the market value of California properties, I could have possibly been taken advantage of. I had the house appraised before and after the renovation. 

Both homes are being rented out and have no plans to sell them. If I were to sell either home, I'm using a real estate agent. I do understand someone starting out in real estate who doesn't have enough capital to buy investment property and they choose to wholesale. However, they won't get any business from me especially if I'm selling, to be brutally honest. 

@Aruna Abdool

I'm in the San Francisco Bay Area. I'm investing in the Midwest, Indianapolis area specifically for now. I know this area pretty since I used to live there and have a SFH rental there. Ohio is also a good market - I talked to a realtor in Cincinnati. I talked to a turnkey company but I would have had to do a lot more research in the markets they buy in: Detroit, St. Louis, Memphis, Ohio (mostly Cleveland area). I'm buying turnkey/move in ready with a local realtor, in escrow right now. I'm not doing an out-of-state renovation but I may consider it in the near future. One thing is that my California properties have appreciated a lot more than my Indiana properties even just in the last 3 to 4 years but I'm not buying here now at these price points.

I've heard that upstate New York has better price to rent ratios than New York City. I don't know anything about NY but that's what a few investors have said. Good luck!

@Landon Kohlrusch

I didn't partner with Kris Krohn but I did get on a call with one of his reps. I felt like I was a car dealership with a slick salesman trying to talk me into buying a car. He expects you to put up all the capital and the program costs $18,000 to $35,000 but you get access to their team of "experts" and they find the property for you, do all the work, etc. Then the plan is to sell it in 3 to 5 years to find a better rental market. He takes 50% of the profits from the sale. The guy kept saying, "I'm just afraid you'll make a mistake. Here's another program for $10,000 if the $18,000 is too much...blah blah blah". I told him that I'm not interested several times and he stopped trying to persuade me. 

You can get free advice on BP, from other realtors, lenders, contractors and other investors. I wound up putting an offer on a house in Indianapolis after communicating with several knowledgable people including a great realtor and other investors. I'm glad I used my $18,000 on part of the down payment on this SFH instead of Krohn's RE mentorship program (or any mentorship program). If you Google his name, Kris was involved some type of lawsuit at least 10 years ago.

Here's my comment on some who had posted in a different forum category about Kris Krohn:

https://www.biggerpockets.com/...

@Jessica DiPonziano

I'm buying turn key/move-in ready properties out-of-state. After doing a local renovation that took over 5 months and went over budget, doing a BRRRR out-of-state doesn't appeal to me. I may consider a rehab in the future but for the next year, probably no. I looked into Martel Turnkey and got on an almost hour long call with them. They seemed pretty honest and had a whole team in place including referrals to property management companies. Most of their properties are in Michigan, St. Louis area, Ohio and Memphis. A tenant would be in place by the time of closing. I don't know any of these areas and would have needed to research them more, which would have taken more time and more analysis paralysis.

https://martelturnkey.com

It was down to Martel and buying with a local realtor in the Indianapolis area. I know Indianapolis area very well since I have a SFH there already and my realtor could give me a break down street by street of the neighborhoods. I also got advice from local investors and my property manager (don't buy on busy streets, high quality tenants won't want to buy in high crime areas). I put in an aggressive offer on a SFH. The seller was a flipper so countered and she countered back, I countered again, $8500 off the list price and $1000 in seller concessions. My other properties are Class A and tenants are great. This is Class C so the adventure begins. If you can find a local realtor whose clients are mostly investors, that might be good route. What I've heard with turnkey companies is they vary widely from being great to terrible. Good luck!

@Jason Norris

I find the LLC and S-Corp issues confusing. Most of my investor friends with 1 to 4 properties don't have LLCs. We all purchased umbrella insurance. I know an investor with 11 properties with LLCs. I looked up one of his property addresses on the county records and his name shows up, not the LLC. The doesn't seem anonymous to me and theoretically a tenant (or guest) trying to sue now sees his name on public records. There is a way to do get an anonymous LLC by having a registered agent file all your paperwork so that your name isn't linked with the LLC. Some investors have LLCs and some don't - I'm not sure if there's one right answer for everyone.

Here is some more information about LLCs. It's Nathan's response to the person who posted.

https://www.biggerpockets.com/...

Good luck with buying your first property. 

Yes, so far it's worked out. When I only had one property, the SFH, it was pretty easy and didn't take much time to do my own taxes. I have a CPA from TurboTax represent me in case I'm audited, since I bought the TurboTaxPremium. I also have a multi-unit owned with co-investors. The property management team sends me the cash flow for 12 months. As far as help, it depends on who you talk to in TurboTax. The last CPA on there that I asked for help was a real estate investor so he gave he some good advice.

I asked friends for local recommendations for CPAs and none of them would recommend their CPAs (one is retiring). That's not a good sign. That's why I just did my own taxes. I didn't really want to just walk into the local H&R Block office or go through Yelp reviews to find a CPA. Eventually I'll get a CPA. 

@Ryan McKay

Congratulations on your first investment property! I've done my own taxes with TurboTax Premier with 2 rentals. I keep careful records of my income and expenses. I have a TurboTax CPA review my returns before filing. This year will be different since I did a major renovation on property #3 so I'll see how that goes once I start on my taxes. 

I think it's valuable to learn how to do your taxes on your own so you see all your numbers but it does take lots of time. Eventually I'll hire a CPA once I get tired of doing my own taxes. I don't have an LLC or S-Corp (for now). If I had an LLC I would definitely have a CPA do my taxes.

@John Martinez

I just put in an offer on a SFH In Indianapolis metro area and that will be my likely cash flow, $150 a month. It's in a growing area. I have another SFH rental that was cash flowing over $400 a month but I bought it 10 years ago. It's now cash flowing about $162 a month - my property taxes went way up since I lost the homeowner exemption when the county figured out I was renting the house (I used to live there). I chose not to sell because it's in a Class A suburban neighborhood with a great school district and is appreciating in value. I have a low interest rate 3.875% and the tenants are paying down my mortgage.

I look at the economic growth in the area and appreciation. If I was strictly looking at cash flow, I would have sold that suburban house but then I'm looking more expensive homes with a much higher interest rate. In California it's negative cash flow at these high prices, so I'm buying in the Midwest. I'm not sure where people are finding properties, SFHs specifically, that are cash flowing $300 to $500 a month right now...send me those listings :) 

It's a great time to buy. The rates are high so there's less competition but in some markets/select properties there are multiple offers - I was outbid on one SFH. This is in the Indianapolis metro area. I kept looking and just made an offer and am in escrow. I was able to negotiate a significant amount off the list price. I'll refinance later when the rates drop (hopefully).

@Cyrus Hernandez

After buying homes as primary residences and investment properties several times, I would recommend a mortgage broker, as Clayton Silva said. They can give you different options. When I was uninformed, I went with the lender my realtor recommended. They don't find you the best options and in some cases recommend paying for points to buy the interest rate down. In my opinion it's best to have zero points or use the fewest points possible unless absolutely necessary (e.g. you need the lower rate to bring your debt-to-income ratio down to qualify for the loan). If I'm going to refinance in the next year, if rates go down, I wouldn't put extra money to buy down the rate. 

For my last cash out refinance of a rental property, I talked to 5 lenders. Some takeaways:

- they should not charge you any type of application or cancellation fee. One tried to charge me a $295 cancellation fee when I went with another lender. This is illegal under RESPA and I could have reported her to Consumer Protection Financial Bureau (I didn't report her to CPFB but I did speak with her supervisor). You have to right to cancel the loan up until you sign the closing documents. I was charged a $400 application fee a few years ago on a different loan. 

- Be wary of lenders offering you rates significantly below current rates. One lender claimed to be able to get me under 6% on an investment property. When he sent the loan estimate it was $23,000 to buy the rate down to 5.625% (this was around late November 2022). That is excessively high, not even sure if it's legal to charge that many points (4.59% points). When I pointed this out to him, he ignored any emails or voicemails I left for him. A primary home buyer can't even get that rate let alone an investor. 

- One lender gave me a rate then said they would give me a better rate if I showed him loan estimates from other lenders. This was extremely annoying since I felt like I was haggling with a car dealer. It was too much back and forth. 

The lenders who did these shady things were direct lenders. I'm not trying to disparage all direct lenders but that's been my experience - I'm sure there are great lenders out there. I'm in underwriting with a mortgage broker for another rental property I'm buying right now. Good luck!