All Forum Posts by: Brock Carroll

Great BRRRR right there! Always nice when the numbers work out as well or better than you hoped. If you find anymore of those properties let me know :-)!

@James Scott like was mentioned, you don't have to have an LLC but if you still need a lawyer, I have used a couple in GR and have finally found one who was reliable and pretty well priced. Phillip Slot at Slot Law Group has been great to work with, helped me with a couple situations and my experience was top notch, I'd highly recommend.

@Jeremy Tomes Appreciate the response and feedback. The unpaid summer taxes were addressed and the previous owner stated he'd use the proceeds from the sale to pay those, which he didn't do at closing and is why my attorney said we have the indemnity agreement in our contract but 30 days later he still hadn't paid them. It's all part of the game, just another speed bump you have to slow down a little for. 

@Stanley Bronstein I'm figuring that out. had in the past but also hadn't paid cash before so that's a learning for me, will definitely be purchasing that in the future. Thanks.

Looking for some input here - I recently purchased my first two deals, one is a 4 plex I put on a traditional mortgage and the other being a SFH I bought with cash and flipped. I used a RE attorney to help put together closing documents when I purchased the the SFH since he said he could save me ~$1,500 by not having the title company prepare the documents, so of course I went with that option. Well when I went to sell the house to the new buyer there was $3,800 in unpaid summer taxes and liens against the property that were never caught since my attorney did the closing. Is it fair to assume that since he was supposed to do the proper title search and created the documents this should have been known about before I even purchased the house? I do have an indemnity clause in the original purchase agreement with the previous owner so he should be on the hook for the costs but I want to make sure that I'm correct in assuming my lawyer should have caught this prior to the closing.

I'm also in the process of looking for a new lawyer for this and other reasons of this so if there are any recommendations in the West Michigan area it'd be appreciated. 

Thanks!

Brock

@Leah Roberts Going into the winter months is definitely a slower time, I spoke to my PM this week and they said they're already seeing this as the "slow time" but that's on the west side of the state. I don't know your area for RE but I would talk to a property manager or three and get their feedback on the property and what they think that specific neighborhood and type of unit would rent for, they're the ones that live in that space day in and day out. It's best to not run the numbers with the highest expected rents because there are a lot of variables you may not be aware of when renting a property for the first time. It looks like you're estimating $800 when you think high end comps are $850, given the time of year and supply in the market you may want to run your numbers on a safer side of $750 and then run a fake ad on craigslist at $825 to see what kind of interest that stirs up. In my little experience realtors are decently knowledgeable about rents in the area, but unless they're actually putting people in leases or have rentals they don't know the market near as well as a property manager. You also have $115K in for the purchase price on your initial report, but given the market in MI lately most sellers on the MLS haven't been willing to come down more than 5-10% from list price on multi's if at all from what I've seen and heard, granted everyone's situation is different. With the new scenario you ran, the CF looks to meet my minimum criteria but the COC ROI is still low. This is where my newbie experience goes to my mentors advice of "don't stray from your criteria", so unless it hits both for me I wouldn't buy it, but that's just me. Good luck and sorry for the long rant.

@Leah Roberts welcome to BP! Looking at your numbers a couple things stick out. 

1. Unless you're house hacking this property or claiming it as a primary residence, I've been hard pressed to find mortgage rates below 5.5% in the last month, especially with the fed increasing rates again last week. 

2. To @Kevin S. point above, it's usually best to budget for property management fee's, even if you're paying yourself that percentage today, it's nice to know how it falls if you decide to turn it over to PM later. 

3. A couple rule's of thumb that are talked about a lot on BP but also personal parameters, the $100+/door monthly CF and >10% COC ROI to entertain a property.

With just closing my first deal as well it was drilled into me by a couple mentors to make the first deal a great deal, not to rush the process despite the eagerness. My patience paid off and I wish the same to you! Best of luck!

I'm currently working with Old National Bank out of Grand Rapids on a 4 plex that I will be brrr'ing and I'll refinance that after rehab is complete and new tenants are in at market rates. This is my second deal with this bank as they have competitive rates and easy to deal with, I've been very happy so far. 

Looks like your property is in Fremont so it's close. 

Let me know if you want their contact information. 

- Brock 

For personal and small business transactions Venmo works great, but they have a weekly max of $2999.99 you can send and receive. Perk is that it's pretty immediate. 

Good luck!