All Forum Posts by: Brian Wilson

My company does work up in St. Joe and Every time I drive through there I think man this market has some potential. But we did a sewer interceptor a few months back... either the whole city is diabetic or has a huge drug problem as we found a 40 'x 40 ' hole (bottom of connection on interceptor) full of hypodermic needles. I've also seen the contractors up there, a huge lack of quality and professionalism by 97% of the ones I've ran into. So for me, until it starts to turn around a little I'll avoid it. 

I would consider college rentals though as that could potentially be lucrative and less prone to the hard drug user issue. Though lack of quality contractors is still going to be a potential issue. 

Only input I have is that you refi out of the FHA as soon as you have enough equity.

I think that idea (BRRRR method) is great, but saying you plan on refinancing your properties into conventional loans involves various aspects. For example, what lenders have you shopped for a cash out refi? Seasoning periods usually last 12 months to do a full LTV cash out refi. Limiting your capital to purchase more deals.

I guess what I'm getting at is the time span of it all, 3 properties in 1 year when you're a new college grad seems a bit unrealistic. Unless you're a white collar worker, most new grads start in the 40-55k range. So considering that (even with a solid PML) you still need some source of capital to cover holding costs and the other various costs associated with owning rentals. 

Just trying to be the voice of reason. If you can pull it off, great! Being a young guy in the REI space is very easy to get lost in the home run stories of other investors (speaking from experience).

Jacob,

Welcome to BP!

Financial freedom in 5 years is a very aggressive goal. Just be cautious in what types of returns you chase. The higher the CoC return, the higher the risk. Depending on the numbers behind your goals, it very well could take more than 5 years. Just keep that in mind.

How are you planning on funding your deals? 

Good luck!!

@Kyle Talbot

First off congrats on the equity capture! 

I'd also like to say considering how high everything is right now, I'd look into refinancing out of your current FHA loan and go with a standard conventional loan (25% down). This will allow you to escape the PMI while market conditions are good. But that's just personal opinion, and I hate the thought of paying for something that I don't want/need.

Second I'd say that KC is a great market, and OOS investors can really do well here with the right help. That being said, do your homework on who's offering to help you with the BOG (boots on ground) aspect of your investing.

While KC is a great market, as an aspiring investor myself I've noticed that it's a market that is full of competition and has matured enough to the point where depending on what area's in KC you're looking; it's  a professionals game. For us newbies I'd look into the further out area's like Lee's summit, Blue springs, etc. They still fall under the KC metro, but are far enough out to not have as intense competition (at this point). 

If you ever want to talk shop and want some honest insight into the Kc market I'd be happy to help where I can. 

Good luck man!

P.s ever consider a house hack in your local market to help increase buying capital?

@Dalton Dyer

It's very difficult when you're young to be patient. If I were you, I'd get my RE license and do that as a side hustle. Good way to learn about real estate and get some aspect of the industry under your belt. Plus it really helps with your lack of capital problem. Money really matters in the buy and hold game. It allows you to weather storms and bad times so that you can enjoy the other +20 years of good returns. 

I'd also look into house hacking after you get some more capital. House hack a nice 2-4 unit property and then move after your year is up then rinse and repeat. In 10 years you could be looking at anywhere from 50k-+100k in cash flow depending on how you buy and market conditions. Best part is you'll only be 33 (still young as can be).

Just food for thought man.

Thanks guys!

I figure if I'm going to pay fees I might as well go local and increase my ability to build those relationships with REI lenders.

Afternoon BP,

I've been banking with the infamous Bank of America, for my entire working life (since age 13). I had always heard complaints about the bank in passing conversations, but paid them no mind as I hadn't noticed any issues with my own interactions with them; that is until today. 

I've decided I want to move to a local bank / credit union in the Kansas City area to move my personal savings and checking accounts to. 

As a two fold approach I'd like to go with a bank that also works well with real estate investors, that way I can begin to build a relationship with said lender.

Which brings me to my question: What local banks / credit unions do you work with for your REI ventures and utilize for your banking solutions in the KC area (personal and business alike)?

There's no right or wrong here, just looking for input. 

Thanks in advance!

@Amanda Olvera

I think you're on the right track by trying to cut your living expenses down, in order to save more capital. 

I would however caution going into any deal where cash flow is negative, especially when the market is crazy hot right now and rents are at a high. These rent trends could last another 5 years or last 1 year, nobody knows. When the correction occurs, rents will drop. Especially with all of the new apartments being built north of the river right now, near Liberty and the NKCSD area specifically, this creates more options for would be renters. Supply and demand on a macro level is easy to forget when we get into the thick of a deal. 

In my opinion I would keep saving money where you can now. Maybe even offer some tutoring for students on the side to get extra income. Then when you have more of a cushion, or find a killer deal, you'll be ready to leap.

Once you create your ideal criteria, stick to it. It's better to go a year or two without a deal than it is to get into something that ends up taking you for a ride. 

Another thought: I really don't like the FHA loan due to the lifetime PMI attached (without doing a refi), you can  however do a lump sum payment of the PMI on the front end of the loan, which will allow you to get in around 16% (these numbers are from a previous deal I analyzed) down. Just something I've heard others have done successfully and may be worth looking into. 

Value adds, are going to be your best bang for your buck. Especially because of your dad and his expertise that he can bring to the table.

@Bo Kim

Try out some local bbq while you're here in Kc. Jack Stack, Q39, etc. If nothing else you'll have some awesome food while you're in town!

Best of luck!

@Ronald Potts ,

I would have to second what @Marvin McTaw asked. You live less than an hour from one of the best cash flow markets in the country. I would look into Kansas City and the surrounding area. Unless you are looking into large multifamily (+100 units)?