All Forum Posts by: Matt Schelberg

@Account Closed

Property Value:  110

Loan Amount:  80

Rent: $1,950

Cash Flow when financed:  $400/month

Difference in Monthly Mortgage Cost (6% vs 6.75%):  $37

My lender is offering me a 25-year mortgage on my rental property.  I can choose from 2 options:

1. 1) 6% fixed with 5-year call option (they can call the loan due at any time after 5 years)
2. 2) 6.75% fixed with no call option

Interested to get the opinion of the BP community on this.  Which one should I choose?

@Kevin Muns, that 200k (or even a portion of it) can build a large portfolio of rentals if you use the BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat).  The key to this strategy is selecting properties that banks will be willing to lend on...otherwise your cash will get stuck in a single property and your growth will be slowed tremendously.

Talk to some local lenders and get pre-qualified before you start on this strategy -- your ability to refinance is critical.  

In terms of timelines, I think a beginner with enough cash for a single rental could complete the BRRRR cycle once every 6 months.

What percentage of your 200k net worth should you dedicate to real estate?  

That would largely depend on your age and retirement needs, as well as other pensions, 401(k) plans, social security benefits, etc that you have access to later in life. There is risk involved in the BRRRR strategy -- your ability to refinance is the key factor. If credit markets seize up or if you are unable to get a loan, that cash will be locked up in the property.

Without knowing any of these variables, I would recommend the purchase of a single rental in a stable neighborhood that produces good cash flow when modeled using the BP Rental Calculator. 

Good luck!

This wholesale deal is currently off-market pending a contract.

Opportunity to purchase a 4-bedroom townhouse in the popular Woodberry district of Baltimore, MD.  This deal offers a 2%+ cashflow rental with lots of equity.  Solid comps in a tight range of 100-112k for the appraisal on a cash-out refi.

• 4/2 with 1440 sqft above-grade
• Level of Rehab Needed: Moderate
• Estimated Rehab Cost:  25-30k
• ARV: 100-112k.
• Market rents: $1,300-$1,400
• Section 8 Rents:  $1,650-$1,800

Photos and floor plans here.

Cashflow Numbers from BP Rental Calculator here.

Features

• Hardwood floors throughout
• Large master bedroom of 275 sqft
• Unfinished basement offers opportunity to increase square footage or add 5th BR
• New plumbing in basement
• Replacement windows

Major Repairs

• Water supply lines in 50% of house are steel and need to be replaced with CPVC.
• Flat roof has been recently patched and there are no leaks, but roofer estimates 1-2 years before replacement (this is included in rehab estimate)
• Needs new kitchen and bath
• Refinish hardwood floors
• Replace electrical fixtures
• *These estimates are provided as a courtesy, please do your own due diligence

Neighborhood:  Woodberry is a hip, artsy neighborhood with new construction homes in the 500-700k price range.  This house is on the edge of the neighborhood but within easy walking distance of the cafes, art shops, restaurants, light rail stop, etc.  House is surrounded by trees and located 1 block from Greenspring Avenue Park and Druid Hill Park.

This is an assignment.  Title work is complete and ready to close.  Please PM me if interested.

I appreciate the kind words, @Russell Brazil. This deal is a testament to the BP community.  It was the result of a direct mail campaign I did with my partner, TJ.  Just to list a few of the BP highlights:

• We learned about how to run a successful direct mail campaign through BP podcasts.  
• We did the direct mail campaign through BP member @Michael Quarles.  
• The BP member who is the assignee vetted the deal through a property manager also here on BP.

Pretty awesome community we have here!

Happy Birthday, @Gabriel G.!  Let's stay in touch.

This property is currently under contract.  It was good to connect with those who sent inquiries -- hope to get more deals like this in the future in the Baltimore area.  

Matt

Well maintained end-of-group townhome in Violetville neighborhood of Baltimore. Rent-ready and nearly half-off the list price. This beautiful home was renovated for a retail sale, but seller priced it too high and didn't receive any offers.  She is now motivated and we have it under contract for nearly 50% of the October 27th list price.  

New kitchen and bath; roof 2 yrs old; heating system 4 yrs old. Saint Agnes Hospital 1 block away provides excellent base of potential tenants.  Rents average $1275 -- this is one of the nicest and largest houses in the development so you may be able to push $1300.

-Hardwood floors throughout

-Updated plumbing

-Updated electric

-Boiler 4 years old

-Roof 2 years old

ARV: 110k

Repairs: $1,500 (new front door and repairs to fence -- both are serviceable but it will improve aesthetics)

Additional photos on Zillow here. BP Rental Calculator numbers here (on Google Drive, please PM me if you can't access).

Cash offers only -- absolutely must close by Nov 19th -- this is the only reason seller is discounting the price so heavily.  She needs a fast cash transaction.  Title work is in progress.

Please send me a PM if interested.  Must have proof of funds for showing.

I am hiring a virtual assistant to help manage my books. I would like to collaborate with my VA on a single Quickbooks file. What version of Quickbooks should I use? Desktop or Online?

For the Desktop version I assume we'd have to save the QB file in the cloud, which could be a pain.  But I have heard bad things about QB Online.

Any advice would be much appreciated!