All Forum Posts by: Michael Slockers

I disagree. But I also haven't read the book on this topic so I'm open to the idea. 

For example, in the event you have access to hard money or private money partners, you could always go borrow the money to cover purchase price and rehab costs, then rent and refinance only to pay off that original private money partner, get NO MONEY back out of the deal, and repeat this indefinitely. You don't need cash to "consummate" the next purchase if you use this method. 

@Scott Lepore

I would humbly suggest that you and many other folks are equating BRRRR with "no money or very little money left in the deal". It gets pitched that way a lot, in fact. I think there are some great replies to your original thread. But very simply: Buy, Rehab, Rent, Refinance, Repeat says NOTHING about how easy it is or how much money you get back out on that refinance. I have done quite a few BRRRR deals where I get NO MONEY back at refinance. What's the big deal? I refinance for better terms, longer terms, etc. I have actually never truly understood the desire to get every dime back that was originally put into the property.

An example of a BRRR from this year:

• Bought at 100k from a wholesaler, put in about 22k into rehab, rented shortly after, and 6 months later paid off my private investor (no points, they were at 6% and I borrowed 115k). 
• Refi 118k to 4% 30-yr, got maybe 1k back out and I left about 4k in the deal. 
• So now I have ~4k left in a property (appraisal is around 160k) that is secured for 30 years and brings in ~1150 per month, plus PITI is 781 per month.

I will do many of these if I can! And whether I left 4k in this deal or 15k really doesn't matter to me either way. 

Just food for thought.

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Yeah it is a challenge. Right now I just show it as capital expenses or repairs and let my paper cash flow take a hit. Adding it to the cost basis is easy at that point because I can add up all the costs including closing costs and acquisition costs, plus capital expenses, when it's tax time. 

Another option is to leave the property out of Stessa altogether until it is in-service. That could work except I need some place to track all those costs, it's already linked to the bank account, so Stessa seems to work okay using the method above.

I moved away from Mint for the flipping business and now handle that using Tiller Money Feeds. Not for the faint of heart but it is pretty versatile so I'm sticking with it for now.

@Ben McFarland welcome! Looks like you found many Tulsa investors! Add me to the list! What exactly are you looking for in your first property?

@Saxon Cantrell

I would think some more about the credit card idea... This house you get isn't going to be a cash flow machine. If you put a $1000 repair on a credit card the cash flow from the house wouldn't pay it off for months.

I don't recommend buying anything until you have some reserves!!!

@Saxon Cantrell So you have 15k which means you can probably get a 95k house? Does that leave you any money for reserves? 

95k houses aren't as easy to find in Tulsa as they used to be (duh) but it could be done. If you need 95k all-in with no fixes necessary, that could be a challenge. In the current listings I see only one that would meet that criteria...

Great thread @Chris Horton!

I'm following this and interested to see how it goes for you! 

This wouldn't qualify for the 1031 tax deferral but you could just turn this 250k into revolving credit to fund other investor's deals and turn that into 25-40k per year. Just an idea. 

I do prefer your idea of leveraging this to fund a bigger deal. You don't have much time though to vet out a deal given you aren't sure of a strategy yet. Easiest option is turn this into 4 SFH houses in Tulsa area suburbs, 50k down on each house, and self manage. The apartment deals or self storage are great if you can secure a deal in such a short turnaround!

@Tom Nellman 

This is a risk I'd be comfortable taking on if the numbers are accurate. I personally would not encourage talking with the tenants beforehand because you have no leverage until you actually own the property but I could be wrong. If you need help or want to offload this for an assignment fee, please message me and we can talk.

@Lowry Coe It kind of depends on what area of town you are in and what future buyers would expect for that area. If the are appreciates the 1925 feel of a home, then trying to get the whole house to a "cohesive" style may be worthwhile. But ultimately if you are not ADDING a bathroom or ADDING square footage, then it is a tough problem. I would tend to prioritize the list based on: 1) is it broken or unsafe? 2) is it an absolute eye-sore or obviously out of date? 3) lowest priority, is it not the "right style"?

Based on your list, my first item to attack would be the landscaping. I would plan to get a contractor in or a landscape designer to help you with ideas so that when the weather cools down you can get the "curb appeal". Exterior and interior paint would be next on my list (if needed).

I've got some friends who in the past got some TERRIBLE advice from a general contractor who suggested they pull out every corner bead on their drywall, and replace with bullnose. The bad thing is, they started swinging the hammers and literally pulled every corner off the walls. It took forever, created a huge mess, required the bullnose and then texture, new trim, and then repaint. In the end, in my opinion, they wasted time and money and added no value. Sad. Always consider investment versus return. 

Last advice is don't get "too creative" on style. Go with the trends. Chip and Jo Gaines are the trend setters so either go with their styles or stick to the 1925 historic.