All Forum Posts by: Greg Kasmer

@Chad Chase - I think funding a fix and flip with a HELOC from a primary house could work. To me, you'll get a similar (if not slightly better) rate than hard money and you'll also avoid paying points for the hard money. The only item I would suggest is double check the payment terms of the your HELOC... in particular, can you pay interest only or are you required to pay a portion of principle each month on the amount utilized. I have a few HELOCs and their payment structure varies. (FYI - I tend to use the interest only structures first). Good Luck!

@Jordan Miller - I think to give proper guidance it would be good to share more details on the revenues and expenses on the property. For example, what is the monthly revenue for the property and what are the "All In" expenses, including mortgage, taxes, insurance, utilities, repairs, etc... Essentially are you cash flow positive or negative each month? It sounds like you're cash flow negative, but not sure you have all the details/line items listed. Also, what is the equity in the property? Another way to say is that what is the value of the property (today) compared to what is owed on the loan? You can then measure the cash flow impact versus the potential cash you would obtain upon a sale. The only other question I would suggest is that you do engage a property management company to review your quad and review your monthly financials. They would likely be able to confirm that your expenses are reasonable for the area or that your rents are at market rates. Who knows, maybe your rents are $200-300 below "market rates" and that could be part of your solution. Good Luck!

@Jim Lynch - I agree with Paul's comments on key criteria. I tend to be a bit more flexible on credit score (minimum is 600), but it's dependent on the property/area. Good Luck!

@Simon Packman - This year I got insurance for a quadplex through Steadily Insurance (Broker) that I've been happy with, so I would recommend giving them a call. Good Luck!

Cosmo - I personally don't know Phoenix well, but if I had to do this in another city I would look at income levels, crime levels, and population growth (if you can) by zip code and/or area within a DMA as a starting point. Then, if you can trend over time you'll want to see where the "path of progress" is going/moving and attempt to buy in that path of progress to gain some appreciation in the future. Also, I would look at rental rates to property values to determine if any areas are around the 1% rule. Good Luck!

@Blaise Bevilacqua - I agree with the added expense items that others have called out including vacancy, repairs/maintenance, capex, unit turns, and low insurance. Additionally, I would suggest you run some financial calculations such as cash on cash return as well as any appreciation from the asset if/when you sell. You may want to share you analysis with a few banks and/or property managers as they will typically weigh in on your assumptions if they are potentially interested in working with you. Good Luck!

@Mike Klarman - Thanks for your guidance. I know that you do a great job smoothing out any "rough spots" in the lending process, so that certainly helps when the deal starts to go sideways... 

 Agree! By leaving money in the deal your cash flow should at least be positive!

@Nicholas Nocella - Congrats on starting your real estate investing journey! As you indicated you have plenty of options to start. I do think partnering might be a good idea for you, especially if you're somewhat limited on capital. However, I would encourage you to Network work local real estate clubs in the PA/NJ area to help identify your target market and ideal investment for your first property. In Philadelphia area there are several REIAs including Diversified Investors Group (DIG), Delco Property Investors (DPI), and South Jersey REIA (SJREIAA) just to name a few. I would go and check out each to explore the topics and talk to other investors in the area!

@Alan Asriants - I agree that BRRRRs are much harder nowadays. Seems like the higher interest rates haven't brought down prices enough to make the numbers work. I agree that investors need to expect to "leave some money in the deal" with a BRRRR, but if someone has the right long-term approach they can leave small amounts of money in several deals now and hopefully refinance down the road to create better cash flow.