All Forum Posts by: Axel Meierhoefer

@Chris Clothier Thanks for your posts on this. I believe transparency is highly important and agree with the point about a visit. In your book, you pointed to the long term nature of each deal. That's what I tell my friends when we talk about onsite visits. I literally ask them: "how many times have you bought anything worth $100K+ sight unseen?" 

As much as there is a huge learning curve and I am still at the lower end of it, I believe we should aim to recognize duties on our side as investors. I want to make informed decisions. When I last talked to Mike and Ashley I just told them that I don't like any offers for properties where you expect a high risk of appraising below asking. My duty was to articulate it and their duty is to find the right properties. With that understanding in place, we will have no issues. Any guarantees and stuff like that are, as my grandpa used to say in German "Jewelry on the night-gown".

@Ron James You are very welcome

@Nicolay Izmerli Did you ever consider other options? It sounds a little that you were very convinced that you could only do a flip. Could you have done a chash-out refi, use the funds for your next flip and rent the beautifully renovated place either long term or as a vacation rental? Just curious.

@Jeremy VanDelinder Does that also apply to the All-in-one loan from Ridge Lending?

@Ron James I have been researching a lot as well and it is more uncommon for good quality companies. For less quality companies, in my experience it is even less common or unheard off. I am also working with Memphis Invest and they told me the same thing. 

The question then becomes one of the balance of cost and quality. Memphis Invest claims that their renovations are broader and therefore cost more which is not always accepted by appraisers. As the investor, you benefit because you won't have the repairs of those items. On the other hand, if you use the BP rental property calculator you will see that you should account for repairs, capex, etc. and lenders also want to see that you have sufficient reserves in case your property isn't rented. 

An argument could be made that you could have your tenant create the reserves and repair money that you might need at a later point. That's why I think inspections are as important as appraisals. If the inspection says a property has major system issues, I would not buy it, even if it appraises. With Memphis Invest you probably don't have the inspection issue but it might not appraise.

That brings the whole thing back to math. If you have a house you like but need to bring $5000 to closing because asking and appraised value are off by that amount you can calculate how long you need to accumulate repair money, capex money, and possibly your positive cash flow to get to those $5000. 

I always feel an inspection report should be good for at least 3 years. Assuming that is true you would get to the $5000 in 36 months if you have repair + CAPEX of $139/month. In that case you can keep your positive cash flow as passive income.

If the money to bring to closing is $10K, you have to have $280/month in repair and Capex to get to your equal point.

For me, and I am not saying I am an expert, in most cases, it does not really calculate out in a way where I am better off paying right now when the tenants can pay for it over time.

If the repair/renovation quality of your TK provider is so bad that you have major repairs in the first 3 years, it's probably not the right provider.

That's how I look at it. Maybe it helps you a little in your decision process.

@Shawn Harvey You could talk to Caeli Ridge at Ridge Lending Group and ask her about the "all in one" loan. It's basically a 30 year HELOC in first lean position for investment properties. You can also find a podcast by Keith Weinhold on YouTube describing it. Here is the link:

https://www.youtube.com/watch?v=yYQcyInk94E&t=14s

@James Wise My grandpa told me that the tone makes the music. Your tone is just rude. I don't mind candid opinions. You claimed you look at my work. Obviously, you missed the fact that I am running three companies successfully for the last 14 years.

It's ok. You do what you do the way you do it and focus on the people who want to be associated with someone who tings candid and rude is the same thing. I would also be more careful with any encouragement to shoot things, even if they are virtual. We live in violent times and you might unintentionally trigger a sensitive person the wrong way. I am sure that kind of rhetoric and rude language does not belong on Bigger Pockets. Maybe I am alone in that view.

Good luck to you

@James Wise I don't know if I gave you any reason to be rude. You are entitled to your opinion, but I think you are getting a little close to the line here. If you had a little of the smarts you claim is needed you would have asked yourself why a huge majority of people interested in real estate investing never start. You obviously have no manner or respect for people, but maybe you can make an exception for Brandon Turner, who, for the last three years in every podcast and webinar shares his observation that only a tiny fraction of people take the first step into investing. 

I don't think this discussion is going to provide any progress. What it does show to anybody reading this thread are the manners they encounter when they read your postings and responses.  I can only hope that people asks themselves at least twice before engaging with you based on how you react here on something as simple as asking a question about an idea.

Invoking the idea of shooting anything in these times is about as low as it gets but maybe you lack any big picture view to realize that.

@James Wise Thank you. I did not know that you and all these other companies you are referring to are taking a PoA and then handle everything that is needed for a client until they get the final title for the purchased property. Good to know. I always thought that so many people are interested but never get started because they are waiting for someone to do the work for them, if for no other reason than being afraid to make mistakes or being talked into things they shouldn't get into. I appreciate your help. I could have gotten into something not being aware that it is prevalent in the real estate market.

@James Wise I am curious if you have come across any companies that offer the services needed to find and close deals with TK providers? I know there is such a thing like syndication but I am toying with the idea to help people who would like to invest in SFR real estate for income or their retirement, have maybe heard a little about it, but never get started because they determine that they don't know enough about it. I know Norada is making that kind of connection by having properties from TK providers and offer them to their clients. To me, that still appears to require that the clients have convinced themselves enough to actually step up and invest and then engage Norada.

my idea is more comparable to a sports agent where I would work on behalf of an investor, represent them based on a power fo attorney and get them the properties according to their criteria, similar to the sports agent getting his client under contract with a suitable team for the best possible contractual deal.

I don't have a name for it but wonder if you have heard about anything similar, would be willing to give me some names of outfits that does something like it - or even your view about the idea itself. 

Thanks for your support and response