All Forum Posts by: Brien OConnor

@Ronan M. - I was wrong.  It turns out she HAS done several people who own rental property.  So that was good news.  

@Thomas Graham she charges $25/hour.  

We already have one SFR and are about to close on the second one. Confession - I haven't set up my accounting yet. I have all my receipts and documents. I plan on using a bookkeeper and Quick-books. Any BASIC suggestions I can provide her. I don't believe she's done any bookkeeping for Rental Property. OR is there a tutorial available that some may suggest?

Second, do we need to keep the second home a separate entity in Quickbooks?

Thanks @Nicholas W.  One of my reasons for agreeing to pay more for rehab is not wanting to be running back constantly fixing things.  So far with the first house we've have zero calls.  And fortunately for us, they're great tenants treating the house like their own.  

@John Chapman - I've read about BRRR. The question I have is - can you get "conventional" money on a short term basis? Or is this something I need to have a banking relationship (local community bank) who understands what I'm doing. And does the same bank typically then provide the long term mortgage? I can't see why any bank would provide money for say 60 days. It wouldn't be worth their effort.

Thanks @Valerie Hiscoe.  Good advice.  Right now I'm still trying to CLOSE on a FNMA repo.  But once, that's done we'll be moving ahead on the remodel.  I've budgeted around $25K to get it all done with the hope we won't have any "issues" for a few years.  

Thanks @Brandt Smith.  Good point.  And yes, during my discussions with my contractor I keep repeating to myself "I'm not living here...I'm not living here..."  That helps.  

However, have any thoughts to making a house a tad nicer so that you can obtain slightly higher rents?  

Thanks @David Dachtera and @Jeff B..  Those responses made me feel a little better.  And I agree, the current house is in great shape - after the cost to rehab and should be somewhat issue free for several years.  I hope the same for the second house after we finish with it.

OK, so we bought our first property in May.  A 1930s or so craftsman house.  It has character and hardwood floors throughout.  We paid $77K, 25% down.  We ended up with about $27K in rehab.  The place looks great.  New sheet rock, foundation, plumbing, etc.  It turned out so nice, we'd live there!  It cash flows about $350/month (after PI, Insurance, taxes).  But I see most PB posters say they spend around $10K with their rehabs, so I'm concerned we're doing too much.

We are about to close on our second house (with garage apartment).  It's again a house from about 1940.  I estimate about $25,000 in rehab costs.  We are paying $93K and 25% down.  We anticipate about $450/month cash flow.  When we get to the apartment, that will take another $15K but i think we can get about $350/month.  

So the question is, how do I account for the cost of rehab in the PB formulas?  OR do I assume that I'll recoup those expenses when we decide to eventually sell?  Example,  I think the first house would easily sell for about $130K or more today.

@Toyin Dawodu and @Brian Pulaski the initial price FNMA was asking was $119K. They reduced it to $99K I offered $80K and we settled at $93K. I think the ARV will be about $150K. I used all the various "tools" BP has and it still cash flows really well. AND the property has a garage apartment. I feel once rehabbed that will be another $350/month. This is not a flip. I plan on buy/rehab/hold for at least five years. In addition, it has over a 1/2 acre. I've not done this before, but I think I could sell the back half of the lot as well.

Thanks Rob.  You confirmed what I felt I knew.  I did NOT know about the infrastructure out of town.  What I've seen is NO HOMES TO RENT in town and it's 20 mins from Killeen - which is not the best part of Central Texas.  So, I hope we are both right on this.

Hello Alec.  Yes...I'm starting to invest in a small town as well, for the same reason.  We live in Austin TX.  The only homes we could see possibly buying were all $200K and above.  We bought our first house in Lampasas TX (7,000) in May.  We paid $77K for this home.  We put about $20K in remodeling and rent it for $900.  We just bought a FNMA repo in town for $93K.  We feel we can rent it for $1100.  We are going to specialize in Single Family Residences.  The unique thing about Lampasas are there are NO RENTALS available!  And it's 20 mins from Ft. Hood.  We were fortunate to have an Army Captain and family move in to the house below.  We're pretty excited about the prospects.