All Forum Posts by: Charles Kennedy

Hard money lending is the most traditional for a flip. 

Personally dislike questions like this. There are far too many variables. What are you looking for? 

If you want good responses structure your question like this:

I have a friend who is looking to purchase a 5-20 unit multi-family property in Atlanta and has $1MM in equity. He/She is looking for strong cash flows and is ok with a B class property, but would not like to own C class properties. What areas offer cash flow, but are not in bad areas?

Obviously tweak to your specifications because my current answer now is "anywhere". To give you more general advice, the good neighborhoods are midtown, virginia highland, buckhead, linbergh. More up and coming neighborhoods are west-midtown (I live here), old 4th ward, cabbage town, etc. Go look at prices, crime maps, etc. and you'll get a feel of Atlanta.

I love the part where you said "Some people advised us to walk away and find something easier". I recently pulled the entire list of properties for my county, and filtered it by duplexes. I then compiled a list of properties I will hand-write letters to explain I want to buy the duplex and house-hack (I won't use the verbage house-hack).

A few friends commented "that seems like a lot of work", "how long did that take?", "how did you know the county would give that to you?", "do you really think someone will sell to you?" To that I say, "it wasn't", "not long", "I didn't", and "yes".

My point is too many people don't want to do what others (yourself) are willing to do, and THAT is how you make some $.

I agree with @Steve C., no need to pay down this mortgage quickly if its fixed at 4%. One of the guests on a podcast said that his goal was to have $2MM in DEBT We are in such a low interest rate environment, where money is cheap. I'd bet by the time you pay that loan off you will not be able to get a loan at 4% anymore.

If you are a prudent investor you should be able to earn more than 4% elsewhere (SP traditionally has returned 6%, and is the most passive investment you can make) and as RE investors we certainly seek returns in excess of this, so don't worry about paying down that mortgage so quickly. If you took that extra money you were paying down your mortgage with and invested it elsewhere, you should (hypothetically) be increasing your net worth much quicker.

In regards to general savings, I have roughly 2/3 in the market and 1/3 in a savings account earning 1.3%. I don't like the savings account, but I keep money there to capitalize on opportunities should we experience a market downturn. I feel that the little interest I'm making now, will be mitigated when the cycle ends.

@James D Malone was correct in his interpretation of my comments. Plan for the worst, hope (and work!) for the best.

That's a great, deal, especially if the ARV is truly $250k. In that case, you got a steal and also created solid value with the rehab.

Additionally, it's always good to be allocating for vacancy, but a lot of the times it seems most small time investors can keep occupancy at 0% if they manage well and are in a decent market. Only thing I would change (which you covered) if getting those utilities separately metered and paid by the tenant... 

Personally, I think these peoples advice above is terrible. You seriously expect your girlfriend to sign a lease!?

If things go bad in the relationship, why the heck would you want a lease in place? So you're broken up and forcing her to pay you still? 

I think that is awkward. Make sure the numbers work with you just living there and her not paying you anything. 

I think showing your hand is not a bad thing here. My conversation would be something like this "Hey (your girlfriends name here), I'm really excited for us to move in together to this new duplex I got. Although I technically own it, I still have to pay the mortgage, the taxes, insurance, and when anything needs to be repaired, it will ultimately fall on me, I think it would be fair for you to pay me $X a month (some amount slightly below market) and we should split utilities. Does that sound fair?"

Can someone send me a link that explains this? Or spell it out? Are you saying that at a certain income level you cannot deduct deprecation from your income?

@John Franczyk

Are you referencing the Kenosha center? If not where is the fulfillment center located?

My dad's a lawyer and I believe this a pretty typical. They certainly shouldn't be charging more than 10 minutes (1/6 hour) for an e-mail, but law firms are all about "billable hours" so they must bill for any time they devote to clients.

I don't think it would hurt when in conversation with him next time to ask about it in a polite manner. Maybe that will make him less inclined to put 15 minutes for something that maybe took 5.