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All Forum Posts by: Brandon Craig

Brandon Craig has started 11 posts and replied 51 times.

Quote from @Bruce Lynn:

City council meeting tonight to discuss AirBnB if you're interested.

I was at the barley house meet up in Dallas couple weeks ago with council members and alliance. Also was on the webex call today listening to the debates.

it doesnt look good for air bnb. 
Quote from @Alicia Marks:

I invest in Johnson County just south of DFW. There's some serious rehab properties you can pick up around $90-110k, but need $70k in rehab. Otherwise you can get rentable properties in the $180k and up pricepoints. I don't know where you'd find 1% rule houses if that's what you're hoping for.

Yeah I don’t think 1% is possible anymore in DFW. 

how much cash flow are you getting off those 180k+ properties in that area?
Quote from @Jenna Parker:

Sherman and Denison are decent emerging markets for SFR rentals. South DFW suburbs are growing in the rental space (Waxahachie area). The Austin area is growing like crazy and rent is sky high. Best of luck!

What price range would be good for these locations in DFW suberbs?

Hi All,

Due to the new Airbnb regulations likely putting them hammer in Dallas, I’m backing out of a deal that I was closing on in a week and swapping to LTR. (Follow up to a post the other day about my air bnb deal being in the hood)

 Where would the best place for LTR to deploy 50k (by myself) or 100k (partner)?

SFH seem to have very little cash flow, small multi-family are scarce in DFW, and commercial RE has such a high barrier for entry on the down payment side.

Need advice and where to move forward.. do we go far outside DFW? Like Sherman or something? 

Thanks in advance. 


Quote from @Matt Solis:

Yo @Brandon Craig

At best you would be able to break even if you turned a 600k property into a LTR, but you would need to rent out each room invidiually to make it work. $700 per room for a luxury home is not too far fetched, which would put gross rents at $3500. Your PITI is probably around $3300 with 20% down, that leaves $200 for reserves. Assuming tenants would also be paying utilities. You will probably need to self manage as most property managers will not do RBTR.

The silver lining here is that the area you described near the Zoo has a ton of potential for appreciation. IMO, the path of progress is heading towards Bishop Arts/Oak Cliff/Cedar Crest area which is where your property is. It might be the hood now but what about in 10 years?

Yeah I am linked up with Sean Ray, a air bnb investor / realtor who has 5 air bnb properties around Dallas. He helped pick it out. 

doing 15% down with 6.6% interest so I think it’s closer to 4200 for PITI. They are building a Big deck park near the zoo which should help appreciate as well. 

Unfortunately you can’t get new constructions in oak cliff or west Dallas anymore that are below $300/sqft. South Dallas around the zoo and fair park are only places that the builders are right now with $220/sqft 2 story, big backyard, new constructions that are great for air bnb. 


Hi All,

i need some advice. I am about to close on a 600k 2 story 5 bedroom luxury home in south Dallas near the zoo. It’s off Marsalis ave. I main road.  I have witnessed crackheads already my two times there. 

This is for air bnb but if it gets banned in Dallas, which they are deciding soon, will LTR work as a backup?

thanks, brandon

Quote from @Nathan Gesner:

There's more than one way to skin a cat. Who's finding the deal? Negotiating? Working with the REALTOR? Working with Title? Coordinating inspections? Managing the property on a day-to-day basis?

I would start with a straight split based on money invested: you put in 25%, you get 25% back. If one partner is performing specific tasks, I would determine compensation for each task as it's performed. For example, if you handle all the property management services then you could be paid 10% of the monthly income. This ensures you are compensated for your effort without complicating the equity split upon sale. If you put the deal together and your partner just handed you some money, then maybe you can be compensated a "finder fee" for the effort involved in putting the deal together without complicating the equity split upon sale.

I disagree with David. If I put 75% of the cash in, I want 75% of the sales price. I may adjust that based on what the partner has done during the process, but I would not give away half my equity! Example:

Investor A: $25,000 (25%)

Investor B: $75,000 (75%)

Property is bought for $100,000 and sells ten years later for $150,000. If they split the equity 25/75:

Investor A gets $12,500 which equals 50% return

Investor B: gets $37,500 which equals 50% return

If the investors choose to split the equity 50/50:

Investor A: $25,000 which equals a 100% return

Investor B: $25,000 which equals a 33% return

The one giving the least is getting astronomical returns and the partner with the most skin in the game is getting 1/3 the return. How does that make sense?

Hmm. Yeah math checks out and is a fair point. We plan on doing everything together for this first property.

I suppose we go ahead scale the cash flow and equity with percentage of skin in the game for now and on the next deal we can adjust based on strengths/weakness and sweat equity. It seems difficult to quantify returns according to being a operations guy vs finding deal guy. Not sure how long or how difficult each is.. what that be based on time? Difficulty? 

It seems very subjective. 
Quote from @David Clinton III:

It all depends on both of your goals. Whenever I partner, I try to push cash flows toward the heavier capital partner. So I would consider doing 75/25 on cash flows until both partners get their money back, and 50/50 on equity.

Putting in 75% (or even 100%) of the capital does not entitle one to the vast majority of equity.

Awesome point. I didn’t think about adjusting the cash flow until we are both paid off. Thank you. 

Hi All,

New investor that just got pre approved for a combined loan with my business partner. On this first deal I’ll likely be putting in 25% of the down payment and he will do 75% due to having more capital. 

We are looking to start on a duplex around 400-600k

We are to go 50/50 on the debt (15% down conventional loan), sweat equity, etc. really everything else. 

Question is how do we determine profits based on the starting capital difference above?


75/25 on both equity and cash flow? Anything else we need to think of? We plan on getting an LLC soon while we look for deals.


Hi Denver, 


I do have a taxable account via Fidelity where I have my 20k invested in a total market index fund. Can you elaborate a bit on that process?

Thank you,

Brandon

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