All Forum Posts by: Chris Youssi

 Go to followed then my discussion and you can get any updates on this thread

The purpose of this forum will be to give practical solutions vs pulling the "crash n crush" alarm like a previous thread. I have a few suggestions that I have implemented and am interested in hearing from other investors. Here are my top 3:

1.) Lock in as much long term funding as possible. Eg... if you qualify for the secondary market grab 10 props  ( up to 40 units as you are able to buy up to a 4 unit and still qualify for secondary market funding ) where you can lock in up to 30 year money. Commercial world lock in for a minimum of 5 years -some lenders are allowing 7 and I am exploring 1 that is a 10 / 1 arm very appealing to me personally

2.) Always develop an exit strategy when you make a purchase. Key is having the discipline to follow thru with the understanding that sometimes life can get in the way and our circumstances change. 

3.) Lastly is you make money on the buy not the sell. Personally I feel this is far more important than location for the simple reason that if you purchase the property correctly location is simply an added bonus.

Some of my thoughts. Looking forward to hearing from others .

My number 1 CY proverb " You can NEVER lose money by taking a profit". EZ to read sometime difficult to execute. Personally I am not familiar with your market but I am familiar on when to pull the trigger.Case in point - I have 8 SFR on 7 year amortizations 7 year term with 6 years 7 months left for payoffs. I just did the loan mod in December but . . . back to my # 1 proverb. Appraised value when I purchased 2 years ago was 85 - tenant is going to buy for 110. I owe 55k - a no brainer to me. Sure it changes my elite 8 portfolio but I will just flip another one of my rentals into the program. Small scale compared to your numbers but the strategy is the same. Now onto your question 2 things to consider:

1.) Only 8 years left thats getting after it but leads to ? # 2

2.) Do you have something / idea of what to replace it with? In other words unless you can reinvest and create more equity why bother? Let the tenants pay off your home.

My thoughts

Agree with your last post Jay Hinrichs it can be painful. But again if it was EZ everyone would do the heavy lifting. ( Philip let me know how it goes with TC and RBT ) I am in the process of financing a large 8 figure project with 60-65% LTV and educating myself with various lenders some who have ( declined to even look at the project ) ads on this website. What I am finding is very enlightening:

1.) Rates vary from lender to lender - getting quoted 4 1/2 to 5 1/4 - this is my biggest surprise.

2.) All lenders "want the deal" but then when it gets into the fine details many times they create goblins that do not exist  / appetite for new construction class A disappears / Loan committee does not like the color of the exterior / the location of the project  / the income projections . Point is they invent reasons for NOT to loan funds vs being upfront from the beginning.

3.) Most are very very lazy - per your reference of the 300k vs the 5M request that's absurd. Prove to me you can handle the EZ loans and then we can talk about larger projects. The seasoned LO's know how to get creative with rates / swaps etc... and will work with you on your current needs and also the exist strategy. Sidebar - loathe time hog lenders who cannot execute. 

I'm close to landing the end loan financing of my project and when I do can share if there is interest. Large national bank which is also very surprising.

One more comment about words like "crash and crush" . What is the point wasting time discussing what is not on anyone's radar - waste of time and fear mongering.Lets discuss correction sure no worries but crash and crush? My advice get out of the biz and leave it to the rest of us investors. Of course thats just my opinion and everyone has one!

Vic Anthony Ned spot on. These types of "the sky is falling " posts are nothing more than fear mongering IMHO. A "crash is coming " thats frankly irresponsible. The market is very healthy in the vast majority of the market. Overpriced and unsustainable markets like pockets of NYC/Seattle/Cali /NJ along with high real estate tax markets a different story. These markets have risen rapidly and will fall with the same velocity. They will experience a correction no doubt while the rest of the country will continue to stabilize and experience growth. EG... our market is 90-95% of it's peak before the correction so no a correction is not going to happen anytime soon.. Will there be leveling off of prices - certainly but a correction is not on the radar. Again like it's been said all markets are local even neighborhoods.

Good thoughts - heres a couple of other thoughts to share.

1.) The 110k does not include appreciation - I believe your already aware of that benefit

2.) It is also does not take into account debt reduction which is nearing 140k

3.) Finally the tax benefits of buying / hold are quite a bit more attractive in my mind.

I absolutely agree with other posts, that no matter what you decide there is no wrong answer because whatever you do it is right for your situation.

Best wishes!

Ben Wilkins has the best advice IMHO. Sometimes one gets pigeon holed into their own world and are not open minded to other opportunities. To me that is unwise. Eg... a few weeks ago I was SMH at the NYC/Cali investors on here who invest simply for appreciation because their market will not cash flow - to me that is insane yet ... I am not in their market and if it works for them great. Key IMHO in those markets is pay very very close attention to the falling knife for if you wait too long when you try to catch it will cut you very deep. 

My own personal experience is as follows: been investing since I was 21 / now 58 . I have owned C properties starting out now mainly ( currently have 60+/- props and developing / building about 20-30 more by year end /another 100 over the next 2 years ) deal with A or B couple straggler C's. I have owned attached housing and SFR/ some duplexes nothing higher than a duplex. Far and away LOVE SFR the best. I have been building my SFR portfolio since 2015 and it cash flows nicely. My strategy is simple - buy them as foreclosures/ estate sales / other investors and force equity by purchasing correctly. I have about 1.65M in debt 1M in equity spread out over 31 doors. Avg rent $1140 / avg + cash flow / door+304 / avg vacancy rate since 1-1-2016 for all 60+ units is 1.09% / easier to rent-sell appreciate. The best part is 8 are fully amortized with 6 years 7 months remaining / the others are have 13/14 years remaining and yet they still cash flow very very nicely . The strategy I use is to fix them to the 9's . They are EZ to rent for higher values / little or no maintenance and best of all because they are purchased correctly after rehab I always have 20-30% equity / get my rehab money back and keep recycling my LOC ( Line of credit ) for more purchases. Last year I spent on average I spent $47 / month / unit for maintenance. We build homes / own shovel ready lots / do some farming on our lots and own rentals. Far and away if I could only do 1 thing and make enf money buying / rehabbing SFH would be my one n only. I would love to scale up to 100 - that is / now was my goal. We have moved on because opportunities have dried up and now will be building new A props in growing markets . Someone once said " if it's not broke don't fix it!" If it works for you keep working it!

My thoughts happy hunting

Ali PM me for more details.

THX

I would guestimate under $2000 .