All Forum Posts by: Scott E.

Almost every house I've ever bought looked like this when I started. My sub market seems similar to yours. A lot of homes build in the 1950s and 1960s and a lot of developer activity in these areas with either high end remodels or scrapes.

Biggest red flag I see is the square footage is light. If you just had to remodel what's here it would probably cost you $150k-$200k all-in (including landscape). But if you need to add square footage to be comparable with other homes in the neighborhood, now you're spending $400k+ all-in.

Meaning if the ARV is $1M after you add square footage, you're going to need to buy this thing for like $350k for the numbers to make sense.

Sometimes yes bank location matters a lot.

On an office deal I bought a few years ago, I got financing through a local credit union. This credit union knew the building, they knew the brokers on both sides of the deal, they knew the tenant, they knew the health of the sub market. They knew what price per foot I should be paying for office in this area. They knew rent rates (in the event the tenant bailed on me). All of these factors were relevant in them even considering financing the deal.

I've been flipping and building houses for 12 years and 98% of my deals have come from wholesalers and the MLS.

My recommendation is to build relationships with agents and wholesalers who specialize in the sub markets that you are targeting. Not just a quick introduction call. You need to build and nurture these relationships over months and years. And eventually deals will start to fall in your lap.

If you are focused on becoming a house flipper or a developer, it is not a good use of your time to do cold calling, door knocking, direct mail, etc.

Great idea! A vote down button or a dislike button would be very valuable to the original poster of questions and to future observers of threads.

As others have said, I think we all know who you're referring to. Thankfully most people around here are doing good. I can only think of 1 person who is a big time offender of posting short 1 liner empty responses that are usually not helpful. That person is currently the #4 contributor on the forums according to the home page (as of when I posted this comment). And they should be recognized in that way if they were offering a ton of value. But they are not. They're just trying to get their post count up.

Anyways clearly I've noticed what you've noticed LOL. And it's not the end of the world. It's just an Internet forum. But a bit frustrating for sure to see this going on when there are so many people here (myself included) who are trying to do good and add value to others.

I thought he said that although this week was a pause, there would be 2 more hikes between now and the end of the year.

I also thought that the fed funds rate is not directly correlated to the mortgage rates.

Please clarify. (I'm not trying to be a smart a$$. I just would like to have a better understanding of all of this as I plan out my next 6-12 months)

You need to call around and look for a DSCR loan. This is a loan based on the rental income the property generates, not based on you as a borrower.

Contrary to what was posted above, your property actually does not need to cash flow to get one of these loans. Typically lenders like to see a DSCR of 1+ but there are some who will approve a loan with a DSCR <1 (which seems crazy to me, but they are out there).

Step 1: Don't do anything. Put that money away somewhere that you aren't tempted to touch it. And spend the next 6 months in research mode. Get educated on the pros and cons to different investing strategies. Study different sub markets. Listen to a bunch of podcasts. Ask tons of questions here on the forums.

Like you said, making the correct first step is crucial. So don't rush it.

Great thread. There is one of these antique shops out here in Scottsdale that has been open for 25 years, and it appears to be thriving. Great location, at least a hundred vendors inside, and it's always packed with people looking for treasures.

I've always been intrigued by the business model. It similar to the salon suite structure which is also very profitable.

I guess I don't really have any advice for you lol. But here to follow along with what others have to say.

House flipping is a great way to make money to use towards buying more rental properties. So you're on the right track with your plan there, but just a warning, this is a tough market to flip in.

You can pull cash out of your 2 rental properties via either a cash-out-refinance or by using a home equity line of credit. Although it's going to be tough finding a lender who will do a HELOC on a rental property. And whether you do a HELOC or a cash out refi, your interest rate is going to be crazy high.

If you need cash now you can sell your rentals and redeploy that money into something else. But not necessarily a good plan if you are trying to build up a portfolio of rentals.

Look at your return on equity, that'll help you decide if it makes sense to sell. If you have $100,000 of equity in one of these houses and it cash flows $500 per month, then that is a 6% return on equity. Not great. Probably consider selling. But if you have $100,000 of equity in one of these houses and it cash flows $1000 per month, that is a 12% return on equity. Great return. That's a deal that is probably worth hanging onto.

So are you saying that you bought a house that you live in and you rent rooms in that house out to your family members?

If yes, then then a lender is not going to consider your family rent payments as rental income. This is looked at as "boarder" income and won't be used to qualify for a new loan.

If you move out of this house and it becomes 100% used for rental purposes with lease agreements and proof of rent receipt, then you should be able to use this income to offset the mortgage payment when you're trying to qualify for your BRRRR home.