All Forum Posts by: Greg Kasmer

Justin - What was your approach to the content of your letter? Did you ask to "connect and have a conversation" or get right to asking about "Are you willing to sell your property?" Wondering what type of language you use in your campaigns. 

Patrick - I agree with everyone about using comps to guide you on how much renovating is appropriate for the market you're in. For a 'lighter" rehab/renovation work I would consider: new paint, fixtures, new lighting (i.e. ceiling fans), and perhaps some new flooring in certain locations. Obviously all of these will be dependent on how much access you have to the home with a tenant in place. Good Luck!

Tabitha - I can share that the towns in the suburbs would like the property owner to be on the application, AND, in some cases, would like the personal information of the managing members of the LLC, not just the LLC information. I try and not provide personal information and keep that close to the vest, but I do provide information related to the LLC that owns the house. Good Luck!

Alan,

Just have a couple thoughts:

- Can that renovation be completed within the 6 months timeframe? A 400k renovation is a big one and you might have some supply issues or contractor issues that would slow this up. 

- Is the refinance loan reasonable at 6%? Looks like you're assuming a 70% LTV on the cash out, but would be interested to see if the 6% rate has been verified...

- Could the ADU be subdivided? Just thinking that if the lot can be subdivided you might be able to sell it off and pay off a good portion of the loan on the larger house and therefore limit your mortgage payment.

Good Luck!

Jessica - Instead of focusing on the checking account I would focus on a bank that you would like to work with for loans, lines of credit, and other long-term borrowing needs. I've searched about 15-20 banks in the Philadelphia area and can share with you my findings. There are some "business friendly" banks and others that are a bit more suspicious of real estate investors. In my opinion most banks will offer a business checking account, but you'll want to save your time/energy to those banks that can also help you on the lending side. For example, I recently went though and applied for a business line of credit for about 8 banks - I was approved by 2 of them, therefore I opened up checking accounts in those two banks. Hope this helps!

Keith - I think many investors uses OPM for short-term purposes to buy properties "all cash" and then make repairs/renovations in order to drive up value (force equity) in a deal. Once a property is stabilized many then secure long-term financing and then pay back the OPM from the lender. Overall, it's a BRRRR... I think a less frequently use for OPM is to provide the down payment/equity on the deal and the deal is then split between the lender and the operator according to the agreed upon returns. (one partner provides all the down payment and the second partner runs the deal and receives 50% of the deal).

I would make sure to stop by the the project at least 2-3 times a week and then do a walk through with the contractor once a week. That way, if there is any items that are not processing you can address sooner than later. Good Luck!

Ashley - I agree with the others. It depends on everyone's preference, but I would aim for 6-10% CoC as a minimum - hopefully that yields about $200-$250 cash flow per month on a single family home.

Chris - Great deal! Congrats!

Travis - Yes, you could certainly do that. You'll pull more money out, but have a higher mortgage payment and less cash flow, so it's all about what you want out of the deal. There were times I could have gone to 75% or 80% in LTV with a cash out refinance, but I chose not to. In my mind, it's always good to have the ability to pull more cash out, but that doesn't mean you HAVE to pull more cash out if you want more security and/or cash flow. (FYI - I would say that most people do try and pull out as much cash as possible.) Good Luck!