All Forum Posts by: Alex Olson

@Shafi Noss I am no expert. If you are just starting out, first stop is to buy the book on Real Estate Loop Holes as part of the Rich Dad Poor Dad series. Its invaluable. Then, network to find the best real estate CPA in your area. Sit down with them and hammer out all of your questions. Taxes are (dare I say) complicated and everyone has different scenarios - not a single 1 are the same. 

Investment Info:

Single-family residence buy & hold investment in Kansas City.

Purchase price: $235,000
Cash invested: $47,000

A large single family home converted to five bedrooms. Located less than a block from Rockhurst University. Used as an AirBnB/STR.

What made you interested in investing in this type of deal?

The location of this home is hard to beat. Located next to a well known local university and close to another, the expansion in this area is tremendous. The long term demand is very high, especially as the cost of tuition rises and dorm living continues to evolve.

How did you find this deal and how did you negotiate it?

This property came back on the market. I was watching it closely because I had a similar property near by that I was under contract on. One my first property fell through this one happen to come back on the market.

How did you finance this deal?

I financed this deal using traditional portfolio loan with a local bank and for the equity I used a line of credit in which I leveraged another investment property towards.

How did you add value to the deal?

I added another bedroom and positioned it for AirBnB so that rents could be maximized.

What was the outcome?

So far the house cash flows really well and there is a demand for short term rentals this close to universities.

@Lisa Thompson Bigger pockets authors have some good books. The guide to no money down real estate investing is a great one to start with. Real Estate investing for dummies is decent as well. 

Yes Dan Foster, Foster Construction. I would also recommend attending a KC real estate meet up. You will meet experts there that can guide you to the right people. It is very difffuclt to find a good contractor that does the right things. Call around to friends and family to find who they have good experience with. If you would like to chat further, dm me. 

@Chris London Yes banks do this. You just have to find the right on in your metro or state. Cost to refi is dependent on value of the package, how much is owed on the packaged and how much income the package generates. Find investment friendly banks and stay away from large regional banks that "might consider doing investment loans." 

I can only speak for KC because that is where I invest in and broker multifamily deals in. KC region has pretty low taxes (Kansas seems to have higher property taxes), have a fair about of $300k or less duplexes, but fourplexes are hard to find that are not crazy expensive and even when they are on the market they go fast. Based on my market research Cleveland and KC are similar in terms of returns right now but KC is higher priced. If you do decide to look at other markets I would work with a good brokerage firm that knows the market well and can build a relationship with them. 

@Andrew Davis I would find a more investor friendly bank. It sounds like this appraisal was done only on the value method rather than the income method. I would call around, ask other banks what they think it is worth. Some times, if they know it is worth a lot more than you owe or paid for it they won't even do a full appraisal. They will just do a bank appraisal. Hope this helps!

@Lisa Clouse Is this a hard money loan (sounds like it)? Yes, it does sound reasonable but be ware of scams like refinance terms, prepayment fee, and other issues. I would have a bank lined up before going this route. Is your credit poor or why are you going this route?

@Ben Kwon I would recommend networking (local events or even on this site) to find other investors who have invested out of state and have had good returns. I have had many CA clients invest in KC. Find a recommendation of a PM, inspector, lender, and insurance (a good broker/agent should be able to do this). Build trust in a single agent with the promise of using them to buy your first property. With video chat technology, long distance isn't difficult to get around.

@Mindy Jensen thanks. Powerful insight. Good analysis.