All Forum Posts by: Cliff Harrison

Leased it today took deposit prerehab two years to start little lady wants it to be her forever house. 950. she is super high quality tenant also.  Fortunate. Three in a row first app quality.

#19 3/1/1 SFR was an estate sale situation purchased from a wholesaler (this is my third buy him). This house is in far south Grandview near Cass County border (near 150/71 hwy) and is my fourth house in this particular area. Taxes in this area are very low - this house is $600 annually.

This house has a huge addition on it that gives it almost double the average sq foot for the area.  Two living areas.

It does need some updating and a clean out.  The house was an as-is deal and has all the family treasures left behind.  This is not a hoarder house - it is in good shape and the belongings are just left behind.  I paid $43,000 and am looking at putting $10k into it and rental should be easy at $950.  In fact I know a lady who is looking for a house like this who wants to sign a 'lifetime' lease.

Unfortunately I have some rehabs already in progress and my moonlight/weekend people are tapped so will need to use a more traditional/full time contractor team on this.

There are some useful items at the house, extension ladders, tools, household supplies, etc.

Best wishes for your projects.

#18 was a long time in the making.  It was short sale with Wells Fargo with two mortgages on it.  Started working on it last December and it finally closed on Friday 8/28.

It's a 3/1/1 with large detached garage/workshop building behind the house, and has an extra lot adjoining included with the property.  This is in the quiet old residential area of Grandview off Main Street (12th St/Little/Duck area).

The house is rent ready with nice appliances, good hardwood floors, all new fixtures, and granite countertop.

Rent will be $850 and my all-in price is $50,500 and I'm happy that no reno work required because I have four in progress (or waiting to start) already with reno work.

Other Updates:

- I also completed two cash-out finances on two homes I bought cash from wholesalers and rehabbed.  On both of them, I purchase was about $35k, I added value for $9-12k, and appraisals came back at $64-65k.  Refinanced out most of my costs - these take more work/effort but it's nice not leaving any cash behind and still having solid equity in the house.  One of these is already leased and I'm going to put the other one on the market today at $875.

- I set up an LLC structure with four child LLCs with my main LLC as owner, each child LLC will hold a few properties.

- I am starting process of competitive selection for my PM business my contract will current provider is up later this year. 

Best of luck on your projects.

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I use the Klinkenburg Law Firm. Google it for contact info. He is a real estate broker as well as attourney he knows real estate. Good rates but no supporting staff nor much infrastructure. He also does not handle evictions but I do have a couple other names for that.

Tell him I sent you if you do business with him.

Banks dont like LLC with no track record. The LLC prevents the bank from being able to consider any of your personal assets and income and limits the assets they could attach in a judgement. The limited liability benefit to you makes it unattractive to lenders.

Regarding Arvest you will likely need to go commercial side for llc.  If you have securities that you can transfer into their wealth management branch they can consider giving a line of credit with collateral being your own securities.  At least this is what i have done after doing many loans with them. 

Back to the comment early in the thread about the plumber who gets back in the van when the investor asks for price break in exchange for more work....

This is looked at unfavorably because the investor is using the promise to negotiate a lower price on the current job, and asking the contractor to take it on faith it will come.  And they have heard that many times before. It may be better to do a couple jobs before getting into this after you are happy with the work and the personal fit.

The tenants I deal with in the 850-950 rent range perceive Grandview schools to be desirable - that is compared to nearby Hickman-Mills and other KCMO schools.  Belton and Raymore-Peculiar are further South and a bit better.

Not as good as Lees Summit or JoCo, Kansas but properties are affordable and schools are not 'terrible'.  I like Grandview and Belton for these reasons.

With #17 we are back to SFRs. This one is interesting (to me at least) and may end up being a very high return SFR. I bought it from a wholesaler - the seller was elderly, had already moved out, and in fact passed away during the process but the sale was being transacted by his son and it continued on in spite of this hiccup.

This is a 3/1.5/1 ranch in a very desirable (for moderate home prices) area off Red Bridge Road called St. Catherine's Gardens. It needs floor refinish and paint on the main level and some light remodel/modernization on the baths. The roof is great, it has metal siding in good condition, and good exterior paint, drive, and all concrete. It cost $49,000, with ARV of $85,000.

The bonus part of the house is the full basement.  There are two more bedrooms down there with closets and egress windows (one of the egress window is not quite to code size so it's not legally a bedroom) and a full bath (needs major work though - never finished).  It's a walk out (private door) with ample room to make a large apartment down there.  The steps up go to the garage which also has a rear exit door - there is no direct access from the basement into the interior of the house.  The basement could be finished out with small kitchen, and three bedrooms and still have an unfinished area for storage, mechanicals, and w/d.

The basement needs finish out/remodel work, I haven't decided what to do with it.

The upstairs with light cosmetic remodel (around $8k) will rent for $950 easily.  With investment into the basement area, I can make it a 4 (legal) bedroom, a 5 (non conforming), or a totally separate apartment (although there are not split utilities so it's not going to be simple or cheap).   So the rental potential on this property will range from $950 (do nothing with basement) to $1600 (separate apartment).

Other updates:

#4 - the eviction is complete and the tenant is gone at last.  Did not trash the house but left it dirty.  Locks changed and carpet/junk removal completed.  Hope to get started on the rehab week of 8/30 and get it productive again - it was a $45k house I haven't spent anything on it yet.  Light remodel will get it to rent at $775 3/1/2 with downstairs living area (raised ranch with half basement).  I may look to sell this one to investor or lease option after I have it fixed up and rented out.

#14 - remodel is just about complete on this grandview 3/1/0.  It looks really good (refinshed hardwood floors, all new interior, spruced up exterior) and I had my first showing Saturday morning.  The couple (with a one-year old) gave me a deposit right on the spot conditional on background check - they said my 'like new' house was much nicer than what else they had seen in the price range.  That is two rehabs in a row that went to the very first showing on the house.  I may be able to get a higher premium to market rents with the quality of product we are bringing to market but it's very nice to get these quick rentals to quality applicants.

#15 - this South KC (bannister area) remodel is a couple weeks behind schedule, but on the plus side I haven't even shown it but already someone has said they wanted it.  This is a tradesman and his wife who has done some work for me, I already have his sister as a quality tenant in a nearby house.

#16 - The couple I inherited in one side of the Belton duplex recently both found jobs and instead of moving out have paid for a month rent and I've agreed to a month-to-month trial for them so I have some unplanned income coming from that unit (it is in dire need of remodel but the current tenants are content with it). In the meantime the remodel on the other side is in full swing and planning to wrap it up before end of month.  My guy on that house will move to house #4.

#18 is closing 8/31.  It is a short-sale that I started a LONG TIME AGO  it had two mortgage holders but it's finally worked out and signed off on.  This one is coming with 20% instant equity and needs "nothing" to rent out in the heart of grandview it's already a bit overdone for the area - granite, stainless, hardwoods, outbuilding) - I think this one will rent as soon as I take possession and market it.

On the financing side, I took my relationship with portfolio lender a step further and moved some security assets I've been holding a long time (income oriented things like bond ETFs) for free to their asset management division, which allowed them to give me a line of credit with those as collateral at 3.5% "interest only". So I tapped this to buy #17 with absolutely nothing out of pocket. I think #17 is going to appraise really well after rehab giving an option to get close to everything back out of it with a 75% LTV loan - or I can just keep some of it in the LOC and have high cash flow. I'm excited about having this tool to use for future downpayments, future cash purchases, or use for rehab costs.

That is all for this update - I'll post another after #18 at end of month.  I hope everyone is doing well with your projects and investments.

regards,

Cliff

#16 is a Duplex, the second Duplex in the Collection, along with #5.  This duplex is located in Belton, MO on a quiet street with mix of duplexes and SFRs.

My price was $79,000 and the units will rent for $750 each with rehab or $650 as-is.  The mechanicals and roof are solid but does need cosmetic update which will run about $5k per side.  Taxes $1100 annual.  The units are large two 'regulation' bedrooms with a third bedroom downstairs with window not large enough to quality for egress.  Two living areas and 1.5 baths with large master bedroom including walk-in closet.  My other smaller duplex in Grandview is one of my best performing properties and I am inclined to by more multifamily now.

Other Updates:  Rehab on #14 and #15 nearing completion they will both be rent-ready in another week or so.  Those were cash buys and I'll start the loan paperwork soon to cash-out, hope to recover 90+% of the cash.  

#4 with my inherited tenant turned out to be a bad deal for me, had to file for eviction, got a judgement on friday for possession.  My attorney found that this person has been sued for UD no less than four other times in Jackson county.  

Since I am buying in Missouri, I also decided to set up a set of Missouri LLCs so I can hold a few properties in each LLC, with my Kansas LLC as the owner of all the LLCs.

I have #17 under option contract with a wholesaler, in one of my favorite neighborhoods off Red Bridge Road.

#15 is a 3/1.5/1 ranch with full basement in south KCMO in the Robandee area near Bannister road and Raytown.

I bought it wholesale for $34,000 and have a $11,000 fix it budget.  Based on my recent experience with the house (#8) on nearby Lewis Avenue, I it will rent for $850 when finished out.   The remodel is scheduled to complete by July 31st so I hope to get it leased for the full month of August.  This was a cash purchase and I plan to finance out after the remodel is completed, so I will have quite a bit of cash tied up for several weeks on this property.

I hope everyone is doing well on your projects.

Cliff