All Forum Posts by: Dave Kush

Good afternoon! 

there are a couple of different things going on here. First, I would recommend talking to a lawyer about the contracts if you are still unfamiliar. In short though you're going to need a purchase agreement and could even use the standard real estate contract, and some people use a warranty deed.

seller financing is when you don't have to give the seller some or all of the cash at closing, and then you don't have to get a mortgage (or as large of a mortgage) and you're able to make payments to the seller. That's awesome if you can get it. In that case, you will need the lawyer to draw up the note and associated paperwork.

I'm not exactly sure what is meant by subject to financing, but that sounds a lot like a finance contingency, where in the buyer is allowed to bail out of the contract if they can't get a loan. Some sellers will accept that in a contract and others won't. Obviously if you get seller financing that won't be an issue. 

Hi Curtis!

The answer probably depends on your long-term goal and how long the long-term means for you.

You are correct that if you put 30% down on three properties, you will then have to wait until you accumulate enough cash via appreciation, cash flow, and savings in order to buy the next property. 

if you execute a brrrr, you would be able to keep going. 

I think you're going to get different answers on the whether or not it's worth it question depending on your time horizon. In 10 years, you could brrrr a lot of properties and have way more than three. In your first year, that's possible but much less likely. 

Consider your long-term goals, and that will probably tell you which way you want to go.

Let us know what you decide!

Thank you. That's very helpful. 

Yes, definitely planning to Cherry pick a few, so definitely a good call about appreciation.

Thanks again!

Hi Everybody, 

I've been driving for leads. I live in the Chicago suburbs, so just about every type of neighborhood is available... cheap, expensive, old, recent construction, well kept, run down, etc.  

I know deals can be found anywhere, but that said, have you found more success in certain types of neighborhood vs others?

Thank you for your help! 

Dave

I think what you say is most important. If you are very clear that you're selling the contract, a couple photos would be ok, then after you get somebody interested, can get more in detail. You can't really show a picture of the contract. I've definitely seen pictures in wholesale offering. Not sure if legal, but definitely happens. Again, make sure what you say is crystal clear and leaves no ambiguity. 

Check your state, but double closings are usually legal.

Sure, I definitely would recommend David Greene's BRRRR book. It's pretty comprehensive.

In terms of adding units...that's a tough one. Usually, provided all the units are attractive, you would probably get more total rent. An important consideration for a SFH is separation of utilities. You want to be able to meter them separately where possible. The quality and age of property is important too. Probably the biggest key is the layout and how well it lends itself to being divided.

The challenge with BRRRR right now is interest rates and getting all of your money back out. But if you bought low enough, you can still do it.

I think you've got the process generally right, but recommend being as accurate as possible on the cost and the ARV.

I see the comps are similar in square feet.  Are they similar in other ways?  Beds/baths/amenities?  My guess is that if the two houses are the same square feet, but the rooms are different, you would get different ARVs.

As long as the numbers work, locations are good, I'd rather have newer than older. I can't see any downside, however I'm interested to see if anybody else does. 

Good question. 2 things that come to mind....

If the market allows you to BRRRR a duplex with 200k, that's going to be ideal. Minimal risk, cost, etc. Then it's on to the next, and so on.

If not BRRRR, then I'd say put down the min and get as many as you can.