All Forum Posts by: Account Closed

Tough position to be in, but an exciting investment to be sure. HML is certainly an option if you can do the work quickly. Otherwise, can the existing owner, now that the loan is made whole, apply for a 2nd on the property, or a HELOC? That might do it. Or, you could bring a partner in who is willing to put up the money for a guaranteed return.

Good for you! It's been said there is 100 ways to make money in real estate. I'd believe it. We've had one rental so far and are planning our REI business right now.

Education is key to being successful in this business.  I would suggest listening to the podcasts on BP, reading the guides, and also some books on the subject.  

Well, not California, I can say that much!  Too expensive for this in most areas.  I've had some conversations here on BP with people from Michigan and Ohio, and there seem to be a lot of good deals up there.  

What about other places in TX?  I realize Austin can be high, but maybe there are other options in smaller towns near major centers, places like Waco maybe?  Could be less expensive there.

Read some of the guides here on BP, and use the BP calculator.  I would not recommend going into a deal unless you know the market you're buying in, and you know it's a good, cashflowing deal by the numbers.  

The REI business is littered with people who felt a deal was good "in their gut" but it turned out to b ea nightmare. Smart investors know what they're going into, not just hoping and thinking it's a good deal. Numbers don't lie.

I would also suggest after you run your numbers, post the details to the forums, and let experienced investors comment on your potential purchase, this is very helpful.  Good luck, and happy investing!

The rules/laws may be different where I live in CA, but in general, if you are your own broker/agent, you don't have to pay someone else the commission.  You would still pay the buyer's agent fee, but you would save your own, so if the normal fee is 6% commission, normally split between the agents, you save 3% at minimum.

You can sell a flip by owner like any other property, but if you're a Realtor, you can list the property on the MLS. Also, there are Realtors out there who will list for you on the MLS and charge a fee, usually $300-500, but they don't end up representing you in the transaction. You get exposure to the largest group of buyers that way.

@Franklin Romine@Chris Williams Gents, thank you for the recommendations.  I haven't completed a portfolio loan yet, but I did seem to have good/positive conversations with Citizens Business Bank as well.

The first positive I see is large capex items are new, so that's less risk up front.  Without knowing the area, historical rental trends and the like I can't get too specific, but forcing appreciation in rents and property value via cosmetic upgrades and safety upgrades seems like a good idea and typically is one I see people do a lot here on BP.  It all depends on whether or not you can see people moving into your renovated units in the local area for $150+ more per month.  Or, you can go for the appreciation play, basically gain the existing cashflow, slowly flip each unit and then sell the property for (hopefully) a sizeable gain in a year or two.

One thing I can say about remodels, with my own experience in the 3 homes I've owned/lived in thus far, and the rental we've had, is that renovations always get more expensive than you expect.  For instance, you might find those two prong plugs are fed with all aluminum wiring, which in some areas/states has to be replaced.  Or, you might find that by touching the electrical in the building, you would be on the hook for County/State mandated repairs to bring things up to current code.  Still, what you intend to do could be a good bet considering the upside in rents and appreciation.  Just one investor's thoughts.

I would invest in 2-4 plexes if I were in your shoes.  They offer economies of scale, meaning if you lose a tenant in a 4 plex, you still can likely cover all your costs with the 3 remaining renters.  If you go single family home, you're either 100% covered  or 0% covered.

Education is the right path. What I have found is that reading books, asking questions on BP and to others in the REI business is key. There's so much to learn, from where and what to invest in, how to finance and hold it, exit plans, growth plans, etcetera.

Hello Rob, there are so many ways you can analyize a property you can easily get to analysis paralysis.  I've experienced this myself using my own spreadsheets to calculate things like cash on cash, cap rate, gross rent multiplier, debt coverage ratio, and the like.  What I've found is that at the end of the day, there's always risk in making the decision to move forward with a deal.  As investors, we have to find our comfort level with risk and move ahead with that in mind.

As for calculations, there's a great book on the subject

There are others out there and inumerable ways to look at it. It depends on if you're focusing on initial return (cash on cash), long term return (cashflow, GRM, Cap rate) or some medium term metric. My best advice would be to seek out education and also use BP's calculators as a good start.

I have also found that doing hypothetical analysis of properties is a good way to build my deal analysis muscles.  It's great practice.