All Forum Posts by: Bryan Lyde

@Allende Hernandez I recommend running a 5-10 year analysis of cashflows. you will likely find around year 5 that the property will generate reportable income, and be half way through the life of rehab or improvements if one was done prior to renting it.

As others have pointed out, take advantage of the tax savings but sell it in the 5th year since living in it. said another way, you can rent a primary residence for only 3 years and keep all the gains.

I guess my dad's land in Leander just went up! nice

@Kate Malchow any thought given to doing short term rental given the location? might provide better cashflow than a standard 1yr lease.

@Greg Stetz imho, once you know the market you're active in, you will start to notice certain reliable metrics and can pounce on deals when they beat the average.

I generally dislike general statements, pun intended, so here is an actual example :

in Indy in the area I'm active, the first 5 properties are all above 1.2%, with expenses in low 40s. for #6 I knew I would get 1.4 as a hold if the inspection came back as expected so I jumped quickly on the deal based on knowledge gained from the first five. 7-8 were a duplex and was approaching 1.4 also. my criteria are the same so I already knew rents and expenses. this deal came less than a month after #6 but when the numbers work you gotta be willing to pounce.

as with most underwriting, the rules of thumb came about for a good reason but should always be a starting point until you master your market or find someone who has and get them on your team.

happy hunting!

@Joe Matthews suggest you read the millionaire real estate investor by Gary Keller. the strategy is sound and what I use to model my own goals, with a few tweaks.

basic jist is think, buy, own, and receive a million. so buy a million in property before paying off the mortgages.

sounds like you have the think part down so be persistent and you'll get there!

@John Forsdikey

yes sir.

look up shawn huss.

@Lance Neighbors definitely separate your business from personal however I see no reason to split per property. I split by llc which owns the properties. and I use 2 accounts, a checking and a savings.

keep in mind most banks expect a minimum daily balance to avoid monthly charges. multiply that by many properties and you have a bunch of stranded capital the bank gets to use.

@Martin Tam, bosart brown, just west of of Irvington and Warren Park

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Indianapolis.

Purchase price: $138,000
Cash invested: $38,000

Contributors:
Joel Wilmoth, Nicole Hoss, Jeff Schechter

3/2 duplex on each side, fully renovated,
Purchase price = $138K, appraised at $145K
Tenants in place and performing, 900 and 950 = $1850/mo
Taxes ~$1400/yr, Insurance $800/year
I use 10% maintenance, 9% for PM, 5% for Capex, 8% vacancy assumption
30yr loan, 75LTV at 3.75% through chemical bank
Closing costs all in just under $40k
KPI: Monthly cashflow of $631, ~$316 per side
COC of 19% yr1, 22% at yr5
Total return on equity yr1 >40% from equity capture, 24-27% annually through year 5

What made you interested in investing in this type of deal?

I had been following HRRE after visiting with them a year ago in market as a potential partner for turnkey properties in Indy. I must have anaylized 30-40 of their deals before this one.

How did you find this deal and how did you negotiate it?

I signed up for a received regular investor deals via email.

How did you finance this deal?

75 LTV with Chemical (TCF) Bank @3.75% on a 30yr.

How did you add value to the deal?

Bring a fantastics property manager to run it!

What was the outcome?

Time will tell but on paper this one knocked it out of the park.

Lessons learned? Challenges?

Covid complicates the closing process and I underestimated the impact on current tenants while a property is being sold.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

The good Folks at HRRE and of course my PM the Wilmoth group. Ask for Max or Joel.

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Indianapolis.

Purchase price: $138,000
Cash invested: $38,000

Contributors:
Joel Wilmoth, Nicole Hoss, Jeff Schechter

3/2 duplex on each side, fully renovated, no AC currently

Purchase price = $138K, appraised at $145K

Tenants in place and performing, 900 and 950 = $1850/mo

Taxes ~$1400/yr, Insurance $800/year

I use 10% maintenance, 9% for PM, 5% for Capex, 8% vacancy assumption

30yr loan, 75LTV at 3.75% through chemical (TCF) bank

Closing costs all in just under $40k

KPI: Monthly cashflow of $631, ~$316 per side (greater than my min of 200 per door)

COC of 19% yr1, 22% at yr5 (greater than my min of 10%)

Total return on equity yr1 >40% from equity capture, 24-27% annually through year 5 (ignoring any appreciation)

This one required 2 months to close but the delays were mostly from the bank and coordinating appraisal site visits in the current environment. I can now confidently say having gone through the process with HRRE that they are a company worth investigating if Indy is a market you are active in as "passive" investor looking for turnkey properties.

What made you interested in investing in this type of deal?

I had been following HRRE after visiting with them a year ago in market as a potential partner for turnkey properties in Indy. I must have anaylized 30-40 of their deals before this one.

How did you find this deal and how did you negotiate it?

I signed up for a received regular investor deals via email.

How did you finance this deal?

75 LTV with Chemical (TCF) Bank @3.75% on a 30yr.

How did you add value to the deal?

Bring a fantastics property manager to run it!

What was the outcome?

Time will tell but on paper this one knocked it out of the park.

Lessons learned? Challenges?

Covid complicates the closing process and I underestimated the impact on current tenants while a property is being sold.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

The good Folks at HRRE and of course my PM the Wilmoth group. Ask for Max or Joel.