All Forum Posts by: Brenden Mitchum

Hey @Beau Garrett!

That premium will really depend on your area. Your best bet is probably to team up with a local agent. A good one will definitely be able to give you at least a ballpark of that premium. They can run comps on renovated vs not renovated homes of the same size and give you an idea of how much a particular renovation would boost the price. 

You can also do this yourself by looking at homes sold on Zillow recently (6 months) and comparing the master baths and prices. 

If you have other questions or just want to chat, feel free to message me anytime!

Hey @Matthew McKay, welcome to the BP community!

So essentially your two options here are: 1. Find a partner of some sort. 2. Find a way to generate income and save up for a downpayment.

Going the partner route is a great way to start but you have to network your butt off and show that you have something to offer i.e. finding the deal and ability to properly manage it. In your post I can already see you leveraging your skills and work ethic to show value so just keep doing this but what's even more important is to just start talking to investors in your area. Get to know people and get a feel for where they are in their career and what they want to do next. Don't just grab onto the first investor you talk to and hold on for dear life; find the partner that is right for you. Now this could be in the form of another investor or it could be a family member/friend so just keep an open mind and talk to everyone you know about investing (just try to stay away from the sales pitch).

The other option mentioned is to start generating some income and start saving. This may take some time, but so might finding a partner. So why not do this and start networking heavily at the same time? Another very important thing to be doing right now is to learn everything you can about real estate and the specific niche you want to get into. Don't worry about learning about every strategy out there but just focus on what is best for your longterm goals. There are tons of resources here on BP for that, from excellent podcasts to great books. And if BP isn't enough for you there are a multitude of other websites, podcasts and books on whatever niche you choose to invest in. Yes, there may seem like a mountain of information and things to do but just take it one step at a time; stay productive and moving forward with a great attitude.

And if you ever have any questions or just want to chat, please feel free to message me anytime!

@Lei L.

Granted you are not in an HOA, the answer is most likely "yes." You will need to check with your city/county's Planning and Development to see what restrictions they have placed on that land and what permits might be needed. They should be able to give you a thorough answer to your question.

For your utility questions your best bet is to just go out there with your contractor(s) and take a look.

Side not: Don't expect to get the same rent on a MH as you would get on a SF.

Please, feel free to message me anytime if you have other questions or just want to chat!

@Tim Kaminski Great points!

I would not assume that those rates are max, they are simply fair market value. This does not necessarily mean they refer to a beautiful, fully renovated space. This just gives you a general idea of what you could get. Your best bet is definitely to speak with local section 8 landlords to see what they are able to charge. 

As @Steve Morris suggests, there are definitely more hoops to jump through but could be worth it profitability-wise. Plus, you are providing clean, safe, affordable housing to those in need. 

Still, rent by the room is not a bad strategy in the right location if you go about it correctly so I would not completely rule it out before looking into further. 

Hey @Tim Kaminski

While I do not have personal experience with either, I still think I may be able to help you out here.

Rent by the room is more hands on just because you have more individual tenants with different goals, lives, personalities and you will find yourself being looked to as the problem solver for any disputes between housemates. For this strategy, you will want to make sure you screen your tenants to match each others' personalities or even have the new tenants meet the current ones before signing the lease. 

In regards to Section 8, if you screen correctly you should not have any more headaches or issues than with a non-voucher tenants. You can find the fair market rents here. You can search by zip code so this will give you a good idea of what you can expect in terms of Section 8 rent.

Then you'll want to determine price of rent per room for the rent by the room strategy. Craigslist is a great source for this. Now just compare the numbers and that will tell you which is more profitable. If neither is more profitable than going the traditional route or if the profitability is not worth the "risk" you associate with this then don't do it, but at least do some research to determine what those risks truly are.

And feel free to message me anytime if you have other questions or just want to chat!

Hey @Christian Cummings, congrats on the first investment man!

To answer your first question, read as many books/posts on landlording as you can. I thought the Book on Managing Rental Properties by Heather and Brandon Turner was fantastic. If you just buy this book and use it as your bible, you will probably be just fine.

I cannot answer your other question because that would technically be mortgage fraud which has pretty significant repercussions. Just plan on being there for a year, and if you have to move for some reason, talk to your lender about it first. That rule is not 100% concrete but I would not make a habit out of buying with FHA and immediately moving tenants in. That being said, it is a duplex so you can at least fill the other unit and maybe even some unused rooms in your unit.

Feel free to reach out anytime if you have other questions or just want to chat!

Hey @Joanne Eriaku!

Wow love the confidence and enthusiasm here. If you let this shine through when speaking with lenders, you will definitely have an advantage over other new investors. But talking the talk only goes so far so just make sure you back it up with the walk. That is what will solidify you as a go to investor in their minds.

Keep in mind, approaching true hard money lenders is a bit different from legitimate private money lenders. Those terms are often used interchangeably but for this discussion let's separate them. Hard money lenders don't need as much convincing as private because they are already in the business of lending money and have been for some time. They just want to see that you are responsible (credit-wise) and that the deal makes sense. They are lending mostly based on the deal, although your experience will be taken into account. Each hml likes the deal info in different formats so just start the conversation with some and get a feel for how they would like you to present deals to them.

Now let's talk private lenders. Again, for the sake of this discussion we'll say private lenders are a bit less knowledgeable and experienced when it comes to real estate and lending. They will take a little more convincing and this is where that business plan will come into play. You will want something that highlights your plan before you have any deals. Don't wait until you have a deal and then go try to find the private money. So develop your plan, just like you described in your post here, and start pitching that to potential investors (family, friends, coworkers, etc.). Then, once you do have a deal that matches your criteria, you will already know who is interested and who is not. And make sure you study up on SEC laws - namely don't go asking random people for money before you have established a relationship with them.

Hope this helps a bit. Please feel free to message me anytime if you have other questions or just want to chat!

My pleasure @Amber Golson!

Having a rehab of only 6 weeks is definitely possible depending on the project and GC, but keep in mind most lenders require a seasoning period of about 6 months before they will refi. Definitely recommend speaking with your lender about this ASAP to see what they say.

But yes, I am doing the same, in regards to liquidity. It is a good time to be sitting on some extra cash.

Hey @Amber Golson, welcome to the BP community!

Using your HELOC on a BRRRR is an awesome strategy. If done successfully you can essentially purchase an infinite number of deals with just that one primary residence equity. But I am sure you already know that so let's jump into those locations you are looking in.

No, you are definitely not too late (okay maybe for 30030). It is definitely still possible to find a deal in 30032 (especially more south) if you get out there and start hunting for something off-market. East Point is even more doable, but again you just have to be proactive and ready to pull the trigger. 

Now, what I do think needs to be taken into account is your ability to refinance in 6-12 months. You do not want to have all your HELOC cash stuck in a deal if something happens in the mortgage and/or housing market. The market is doing deceptively well right now and this may fool many new investors into jumping in while it is easier to grab properties due to seasoned investors hitting the pause button. The fact is that no one has any idea what the market will look like a month from today so jumping into a project with a long timeline that hinges on a healthy market is very risky. However, you can definitely still make a BRRRR deal work right now if you buy at a huge discount and have cash reserves to keep you afloat if there are any issues with the refi.

And now is a fantastic time to start networking and building that team, which you are already on top of! 

I'm more than happy to chat anytime or answer any questions you might have, just shoot me a message!

Hey @David Krall, welcome to the BP community!

So it sounds like you have two questions here: 1. How do I find off-market properties? 2. How do I sell my home(s) without an agent?

The answer to both questions is rather simple, you get out there and make it happen. So to source off-market properties you will need to develop some kind of lead generation. Start by targeting a certain type of distressed properties and begin contacting those owners. There are a variety of ways to do this from direct mail to cold calling.

Now, if you don't want to use an agent when you sell your home, you will just have to do it yourself. You can pay certain sites like zillow and redfin to list your home, but keep in mind you are not simply throwing 6% down the drain when you sell with an agent. You are paying for a professional to help you sell your home for as much as possible. They know the market and they can help negotiate the best deal for you. Most FSBOs either sell their home for less than they could have or leave it on the market for longer than necessary. If you are confident you could sell your home like a professional then by all means go that route, but there is one more thing to keep in mind. Many buyer's agents will not even show their buyers FSBO houses because they are not promised a commission from the sale and must instead convince their buyer to pay them the fee on top of the purchase price.

If you have any other questions or just want to chat, please feel free to reach out to me anytime!