All Forum Posts by: Jake Baker

@Marshall Smith

Commercial Loan: Many investors use a commercial loan since the 4-plex would be in an LLC. These loans often have more straightforward qualification requirements for investors with multiple properties but may have slightly higher rates.

Cash-Out Refinance on Your Single-Family Rentals: If each has around $70k in equity, a cash-out refinance could provide some capital for the down payment, renovation costs, or even help you buy the 4-plex outright.

FHA 203(k) or Conventional rehab loan: If you're planning to occupy one of the units as a primary, FHA's 203(k) loan or a conventional renovation loan could help with purchase and rehab costs at lower interest rates

Portfolio Loan: Some local banks may offer portfolio loans for investors with multiple properties. These loans often have flexible terms, can be held in an LLC, and can cover multi-unit properties.

@Tom Dean

If you're set on the BRRRR strategy in the OKC area, properties under $100k are tough to find on the MLS, especially 1970 builds. Some strategies to consider:

Networking with wholesalers: Many off-market properties don't make it to the MLS, so connecting with wholesalers who operate in OKC can be a great way to access these deals. Local meetups. https://www.biggerpockets.com/forums/521

Explore Auctions and Foreclosures: Properties in your price range may be available through local auctions or bank foreclosures.

Partner with an Investor-Friendly Agent: An agent familiar with BRRRR deals can help you find off-market listings or properties about to hit the MLS. They'll often have leads on deals before they go public. https://www.biggerpockets.com/business/finder/agents

With your experience in renovations, you may be able to find value even in these challenging properties. The key will be maximizing your reach into off-market channels.

@William Vreeland

Knoxville Pros: With family nearby in Nashville, you may have a solid support system in Tennessee, which could make managing properties easier, especially if you're new to the market. Tennessee’s no-state income tax policy can be a nice perk for long-term wealth building.

Indianapolis Pros: Having real estate connections in Indy could give you a competitive advantage on deals, local market insights, and trusted contractors, which can be invaluable for a BRRRR strategy.

Ultimately, your “competitive advantage” might be stronger where you already have boots on the ground. Best of luck, and let us know what you decide!

@Ryan Yu

When you refinance a property, you’re essentially taking a loan against the equity in that property. The money from a refinance isn’t considered taxable income because it’s a loan, not a sale or gain. Capital gains tax applies when you sell an asset for more than its adjusted basis, not when you borrow against it. So, suppose you refinance the property after remodeling, and it appraises for a higher value. In that case, you can take out cash through a loan without triggering a taxable event, even if you use that cash as a down payment on another multifamily property.

@Akshay Bhaskaran

I have a few bookkeeping clients that invest in Columbus. It seems to be a great market. 

Here are a few thoughts about your comment on market appreciation:

Cash Flow is a hedge against corrections. Cash flow (in my portfolio as a whole) covers my expenses. Forced Apperception (BRRRR or buying at a discount) is also a hedge against corrections. Market Appreciation is the least predictable, but historically, where you will make the most money. Real Estate values, nationally, have never decreased over any 10 years.

@Erich Hatch

First, I look at permit history. This can tell me a lot about the age of the plumbing, roof, HVAC, etc, before actually walking it.

Second, I look at listing photos and Google Earth Street View to assess the condition further.

Third, I determine a rehab scope and run it by my agent.

I have my agent, inspector, and contractor walk the property together. That way, I have my agent's opinion, an inspection report, and an itemized bid from my contractor.

@John T.

We do 10+ BRRRRs OOS annually. We have tried wholesaling with off-market campaigns such as direct mail and SMS. It didn't prove easy, given that we were out of state and weren't there to take appointments. The key is to find a great person to be your boots on the ground to take your appointments. We stopped wholesaling and ended up just networking better with wholesalers and putting more offers out to find better deals.

The BRRRR process also has its challenges due to being out of state.

@Ryan Hall

Meetups are a great place to meet people. I recommend Beers and Deals - a great place to network once a month. 

https://www.biggerpockets.com/forums/521

The next one is tomorrow, the 13th! I'll be there if you want to send me a DM!

@Suzette Rodriguez

Most of my thoughts are speculation

1. Potential Reinstatement of 100% Bonus Depreciation: 2024 is 60%. 2025 is set for 40%.

2. Income Tax Bracket Adjustments. The highest bracket is 20%. I expect that to come down.

3. Increased Capital Availability. A lot of sitting capital will re-enter the market. 

A massive transfer of wealth in the next 4 years: 40M Boomers are retiring. I believe we are in for a very active real estate environment.

@Tarcizio Goncalves

Stessa is an excellent platform for tracking income and expenses for investors; it is user-friendly. However, its downfall (and really what makes it so easy) is that it is a single-entry system.

This means there are no checks and balances to ensure all transactions are entered correctly. A double-entry system (like QuickBooks) allows you to reconcile your bank statements, ensuring no missing or duplicate transactions. I would recommend Stessa so much more if you could reconcile; hopefully, they will! Or maybe they do now since the last time I used it.

Overall, I think it’s an excellent solution for smaller portfolios because you can easily spot any discrepancies. However, if you have a more extensive portfolio or plan to become larger in the next year or two, I would look for a double-entry system that allows bank reconciliations. Most bookkeepers won’t work in it if you plan to outsource it in the future.

I use QuickBooks Online (QBO) for my flipping business, rental businesses, and bookkeeping clients. QBO has every feature you need to run a business, excellent reporting features and integration with other software. It is the most popular software in the industry, and most Tax Preparers are familiar with it, which makes tax season easier.

My Recommendation: Spreadsheets are usually fine for your first 1-3 properties. 3+ properties, you should use a software. If you plan to scale at all, I recommend QBO. If you do not like bookkeeping/accounting/technology, hire a bookkeeper specializing in real estate investors.