All Forum Posts by: Chris Svendsen

First thing I would check is what you can actually refi out of house for and what rate.  Closing cost are a killer.  Also are rents possibly any higher than you think?  Is your rehab budget realistic?  How much will the carrying cost be while rehabbing and finding a renter or seller?   If selling what is commissions you be paying?    Sometimes the best deal is the one you walk away from.  I would take you estimated rehab budget and then add an additional 20 percent then see where you are at.  If not good with the new numbers get out if deal.

I am with the others, your numbers seem off.  At that purchase price and rehab budget I think you would being doing negative cash flow every month.  I would recheck numbers, include insurance and taxes and real estimates for cost.  I would bet insurance be at least $120 month, taxes about $200 a month so mortgage payment be more around $1800-1850 before rest of expenses.  For a 2000 a month rental I would want to be all in at $200,000 ish but thats just me.

Oh just for reference, I am working on rehabbing a house now where with purchase price and 75k rehab i will be all in for under 200k and be able to rent for $1800 to $2000 a month and I still feel like cutting it to close.ARV on my home will be $250-280k and will be able to refi and have zero money left in property when done and still cash flow about $450 a month after all real world expenses so that is why I think your numbers are off.

Great Video.  I was listening to a video the other day on the Robert Kiyosaki channel and his lawyer stated the 2 top ways people state how they are going to get rich is either win the lottery or sue someone.  Looks like you sadly got hit by number 2.  Sad that the majority of our country thinks best way to get rich is take advantage of others instead of doing some honest hard work.  Good bless America, land of the free and home of the Blood Sucking Lawyers!!  Not all are bad, just ones that do this type of crap have a special place in my heart.  Good luck with it, like to hear what family friend that is a lawyer has to say.  

Welcome to Bigger Pockets.  You found the right place to help with buying your first home.  It is ultimately not that difficult but there are ups and downs and things to prepare for.  I bought my first home at age 26 and was a easy experience because I prepared. 

My one piece of advice is to start saving money now. There is one steadfast rule I live by in my purchases is to not waste my money, and the biggest waste of money is PMI on your mortgage loans. There are lots of first time home buyer programs and low or no money down situations but most all of them require PMI. It is insurance on you mortgage basically giving lender additional money to cover the lender if you default. Somehow making you pay even more money for a home when you don't have a lot of money to buy a home makes sense to lending institutions. Save enough to have 20% down payment for your first home or find a place you can purchase for 80% of the value of the home. Have some extra cash for reserves too as things will always happen when least expected. Other than that be honest with yourself on what you can afford. Do not get talked into paying a $1200 mortgage on your current income. Know what you can afford.

Find a good realtor when you are ready, get pre-approved for a mortgage, and find a place that works for you.  If you are open to having some roommates good chance you can even live for free after they pay you rent.  On here it is a term referred to as house hacking.  Have fun on the journey and don't rush, the right property will come through in the end.

I had same situation on first rental.  I was 95 percent done on rehab.  I ended up listing, showed the unit, took applications and had approved renter setup for the 1st of the month for following month.  I listed first week of October, had deposit in hand by 3rd week to hold unit, had first months rent and renters moving in on the 1st of November, with a long stressful nights 2 days before trying to get everything finished by noon on the 1st.  I liked knowing having someone for unit before I was done but did make for some stressful times to get it done in time.  I think next one will wait until 100 percent ready but at same time I do not see any issues having people doing applications.  Don't take there info.Use the online systems where they pay company directly and you just get a report.  Don't need to have their SSN info in my life to keep safe. 

Do a lot of research before buying in Hagerstown, they have a lot of restrictions when comes to who can work on your houses plus more tenant friendly.  Good area price wise, just be educated before diving in head long.  Winchester and Stephens City good areas and Front Royal.  All about finding right house which hard last couple years since prices went up but plenty of them out there that just need fixed up some.

Thinking about same for some of it to fund an rehab on a property we purchasing buy also as cash reserves for any screaming deals that may pop up in next 6 months.  Only thing that I don't like is that values took such a hit will equate to some realized loses but the gains should outweigh those loses. 

Oh yeah, here is what it looked like in 2014, to bad looks nowhere like this now.  Hopefully get a few pictures up this weekend.

Long story short got a great lead on a property from our realtor who cannot act as our realtor as has a interest in the entity that is selling the property.  Price is good and when we first looked at house was going to flip it. Now since world just turned upside down we moving to renovating and adding it to our rentals. 

House is in a great area, should be easy rental but needs full rehab.  Feel like we are doing everything right and wrong all at the same time.  Here is where my mind is right this minute.  AS things move one will update everyone.  Hopefully this be a success story and not a flaming disaster.

House cash purchase only, had a HELOC on another rental we have, used $80K from that to purchase the house. I have this as a positive.

Rehab budget was coming from a cash out refi on primary house however that has been taking way longer than expected, now worried may not get it done due to the 80K just used to buy other house.  If this does go through will have $50k to use for rehab and mortgage payment only going up $52 dollars a month.  If does not go through no idea yet where going to get money to do rehab.   This is a positive and negative for now.

Currently home is a 4 bed, 2 bath house in town with a nice yard and garage-bonus for in town.  Can make up to a 5 bed/3 bath house but now going to keep at 4 bed/2 bath to keep rehab cost down.  This house type highly sought after in area for rental-Good thing

ARV should be around $240-$280k depending on how much we do to house. Should be perfect for a BRRRR as looking to get money back with a refi of house once done. Possible problem these may not be available-This is a possible negative.

Might be put out of work shortly.  Good as will have plenty of time to do work on house and can save money from paying contractors.  Bad in that will be short a large amount of income to pay my personal bill-BAD!

That's all I got for now. Just wanted to throw up a quick post. On the podcast they keep talking about being greedy when others are fearful.  Well I am full of fear, all my friends and coworkers tell me it a bad idea, should back out, and family think I am going to be living out of back of the station wagon.  All this gives me the feeling that even though scared as hell, if we follow plan and keep to numbers this will be another home run for us.  Keep moving ahead, no matter what.  Wish me luck, think we are going to need it.

Going to be applying shortly. Not sure will qualify but figured worth a shot. Hardest part I am trying to figure out is make sure using right forms for a single member LLC and I am filling them out correctly. Cannot hurt to apply, even if get initial 10k given out can use to cover some mortgage payments on rentals.