All Forum Posts by: Brenton Kasselder

@Jessica G. Looks really good! That 8 day timeline is fantastic as well.

The ARV being 180k but what would the original home have sold for? Because I think that is the real gauge of success on this "Flip" though I acknowledge it wasn't a pure flip.

@Austin Richey Hey I to am just starting out in my REI career.

The one thing i would say is to take the time to get a grasp on REI "Before" you deploy your first chunk of cash. Study, listen to BP podcasts, study, read some more and delve into the BP resources/community, also did I mention study?

I am of an opinion that your first deal can either be a fantastic stepping stone, or a major setback. And not that you would even have to lose money for your first deal to be a setback, but if it isn't launching you forward then you have sold yourself short.

That being said if you don't know your options through study etc, then you will have a difficult time formulating/building an optimal plan for your REI career.

Also if you haven't read Rich Dad Poor Dad. That's a great place to start.

@Brandon Turner Some days i wake up and think I AM the MAN, I have it all down and I know so much. Then something as basic as this concept, kicks my butt around. I hadn't even considered that aspect of my cash out refinance...Always something new to learn!

To be honest though, the idea of this duplex without a fixed rate, scares the heck outta me. ARM's for me, dredge up everything I have read about the interest rates of the 80's. Though I wasn't even born yet, I have a healthy appreciation for the leverage we sometimes "flippantly" employ. A sword cuts both ways and that really makes me nervous.

One other aspect of a refi without fixed rate that scares me; I believe given the amount of money we have printed in the past few decades, inflation won't hover around the historic 3-4% and in doing so could push interest rates up in tandem. I don't even want to know what my P&I would be at something like 8-9%, let alone the 18.5% peek interest markets have seen in just the past 30 years.

What direction are you leaning with your refi.?

@Jeff Deville I am in very similar shoes to you at this point. After about two years of inactivity and REI study, I developed a strategy almost identical to @Andrew Cordle in that the biggest hurdle to rental properties is capital.

I want to actually Invest, and build my asset column, not simply boost my income statement in the short term with a pure fix-flip approach. This strategy in my opinion, although aggressive, will do exactly that. Build a solid balance sheet of long term B&H cash generating assets.

@Michael Wolffs I think you can get the most "bank for you buck" by simply providing W/D hookups in each apartment. Attractive and much more passive as far as maintenance issues etc are concerned. But you still have the W/D in the unit which could lead to lower turn over as the units are more capable of providing long term tenants, due to it be so much more livable.

But that is for the ideally solid middle class and above type of units. So as always, it's market dependent, is a big part of the answer.

@James Wise Yeah that is the way I am currently leaning. Keep hard money as back up in case there is trouble with the number I want to refinance though, for sure.

@Mark Neiger

I would start out like @Jean Bolger said for sure! That is a great way to get started. But I would take it a step further as I recently have when I purchased 3000 sqft duplex and owner occupied. What you really need is small multi with the ability to increase the rents and property value significantly. It's tough but they are out there, and you have the potential to force a heck of a lot of Equity. Then you could refinance and cash out some of it and still B&H the property.

End result: Mortgage free living

Possible chunk of cash from refinance/cash out

Retained equity in property to collatolarize using a blanket note or similar financing vehicle in order to get into another B&H Income Property with potential to increase rents.

This along with a few other strategies is what I am currently using to build my empire.

Best of luck to ya

@Tia Power I wouldn't touch that deal if my life depended on it. Why would I want my first stepping stone to REI to be crippled by such insane terms.

But let me detract, if ANYbody ever wanted to make this deal with terms like these I would lose my mind! He wants as much as 1200x12/yr or $14,400 for just a $10k investment?? Sounds Great!! For him maybe.

Don't do it, just save the money yourself, or find a different way to raise $10k but those terms are not going to set you up for future success. As they essentially drain all of your cash flow at a time when you need it most.

Good Luck and make sure you do some research on raising money from friends and family as they are most likely your best resource for loans, with reasonable non/loan sharkish sets of terms. There are a ton of good articles on the Bigger Pockets Blog about raising money if you haven't checked that out yet.

I first began studying real estate investing about a year and a half ago at the ripe old age of 22. I trolled Bigger Pockets reading a whole crap load of information and trying to "Figure" out exactly what my first BIG move should be? The problem was the entire time I was renting my aweful $825 a month 2 bed tiny 1 bath house in my little town of Grand Island NE. I just never seemed to have enough money, knowledge, connections, lending ability, experience, too young etc. etc I was acquiring information but failing to actually do anything with it and failing to seek out and develop my "Unfair Advantage" as Brandon Turner so aptly puts it.

Rents are high and vacancies are around 2% where I live. It is absolutely a landlords market with properties going quickly and at a premium. And almost no income properties being sold on MLS. Have to find deals through grapevine.

So I again went the way of Brandon Turner and bought myself a 3,000 sq ft. duplex, 3 Bedrm 2 Baths for $101,500 with closing costs, and a VA Loan. Spending $33,000 to get them up to $1,050/unit up from $550/unit. With an ARV of $200k and $70k in equity.

Question is, when I refinance to pay back the $30k renovation loan do I take out an extra $50k in equity, leaving me with 10% equity but money to flip with a partner, or retain equity and save up/possibly use hard money to flip and use retained equity as collateral on a bigger property, as soon as the deal presents itself.

I am doing this full time with a VA pension as my income. I want to build a massive portfolio of Cash Generating Assets. So what would you do in my shoes??

Build your own dreams, or someone will pay you to build theirs.

@Jack Tucker I would have to agree with @Darrell Shepherd on this one. Treat the deal as if this were any other deal. Banks have reason to liquidate at steep discounts all the time. Just because he has a motive to sell quickly doesn't mean that you will get burned. Just run your own comps etc. get all your numbers together. And if the deal makes sense for your particular approach to REI then jump on it.