All Forum Posts by: Jake Walroth

I like the niche your going for.... my niche at this point has been college rentals... but after witnessing my grandparents having such a difficult place to live with no steps and geared towards retirees.... I’ve been thinking of how to serve that market/demographic... there’s definitely a need, particularly on the on our side of town.... with a lot of boomers set to retire/look for their final house.... I think there is tremendous opportunity in providing for this group. 

Not so interested in your model, but interested in serving that demographic for sure. 

Jake 

@Tyler Weaver NRL Mortgage - ask for Justin Allen

@Tae C. I’m generalizing here a bit.... but I’ve bought and refinanced a few properties just up the hill from Northside..... my appraisals have seemed to be much loftier on refinances than purchases. 

Good luck 

@Slocomb Reed not going to lie....being a proud westsider... and growing up in Westwood... it's good to see 25-35 year old friends moving into parts of Westwood. Westwood is the largest neighborhood in Cincinnati by a good margin.... so like you said... it gets written off as C-D class.... but there are tremendous pockets where people are renovating/fix ups.... as you said.... if someone dropped you on Epworth.... you wouldn't know you weren't in Hyde Park. 

Westside Brewery has been busy the few times I've been there-- with foodtrucks.... never thought the westside would see foodtrucks... there's also a few other shops that have popped up.... Nation is opening up their 2nd location in the old firehouse..... lots of good movement..affordable, quiet pockets, not disconnected from downtown/highways like most of the westside. 

Cheers 

yea... apjones is near Northside.... but it's a fringe street.... that combined with the color, size, lack of parking probably makes this one tough. My uncle just did a flip on Chambers.... no issues- but it was bigger, parking, yard, etc. It appears you did this through Build Realty.... what didn't they suggest for the ARV?

This seems like an ideal opportunity to BRRR, I'm guessing if you bought for around 60k you should be able to pull out a good amount of cash on a refi and still have rents of $1200-$1400 for a solid cashflow property.

Jake 

Get yourself a map.... and drive around lol. There are other neighborhoods that might be meet your criteria... but when I think of areas that are going to be "easy" tenants, I think of the neighborhoods referenced below:

Pleasant Ridge

Norwood(very street to street)

Columbia Tusculum

Walnut Hills(very street to street)

Northside(up and coming, lots of opportunity--flippers making $$ here)

OTR... but you'll be buying on the fringes and waiting a few years before gentrification takes hold in the areas of OTR that are affordable and the #'s make sense for rentals

Newport, KY(above 10th street)

Covington, KY(above MLK)

Bellevue, KY

So I'll first lay out the basics of the deal... and then pose my quandary..... that felt like an elegant sentence lol. 

2 unit building near major medical/college campus'

Last 5 sales on street for similar properties- 350k, 350k, 450k, 405k, 505k

ARV- we'll say 400k

Seller Finance Terms

Term Length-5 years, with option to extend 2 more years at 2% higher, 1st yr int only

Purchase- 235k

Down Payment- 15k

Needs: 85k in rehab-mostly exterior and some cosmetic inside

Tenants currently pay $950(two bed 1 bath) and $740(two beds one bath)-- 

The owner doesn't use 3 bed rooms upstairs-- he used them for storage. He also didn't utilize the 1/2 in the ground basement that has two rooms and a bathroom. 

Once I have the tenants out--they'll be out Sept 1, our plan is make the top 2 floors a 5 bed 2 bath unit-- should rent for $2,500/mo. Then once we fix the basement bedrooms... we can make the first floor and basement a 4 bed 2 bath unit, will rent for $2000/mo. 

So my PITI on this after the first year will be around $2,000/mo

water-$215/mo

Capex/Rep- it should be like a new house at the end, so I'm only factoring 5%/mo-$225

Vacancy-$0, I've got six other properties in the neighborhood... no vacancy with college kids

Misc-$200

Estimated Cashflow/mo- $1860

21% CoC Return

My question is this...... my original plan was to utilize the friendly financing terms at a 4% int rt-- better than my recent bank loans by a good margin....I was going to use the full 5 year term, and fix it up slowly over time... get the good unit rented out for max value, and get other unit updated to do the same..... then work on the big ticket items throughout the course of the term...... but then I got to thinking..... interest rates aren't getting any lower.... with the market hot... the ARV and appraisals will likely be friendlier the faster I do it.... it seems a downturn is due well within that 5 year term. I don't have 85k in the bank... I think I could finance it via some credit cards, Lending club products, etc... but I'd definitely be more comfortable paying for the updates with the cashflow over time.... This was a little scatterbrained but thanks for reading and any advice on how to best proceed would be much appreciated.

Cheers, 

Jake 

Im not saying wholesaling is easy. I will say, I’ve inadvertently wholesaled two deals from leads generated by my mailer campaign- intended to be deals for me to buy. 

I might have a benefit of being in a good midwestern market that people from zip codes starting with a 9 love... but I do think some people make wholesaling out to be way harder than it is.... that being said, I have a good full time job, and 6 rental properties, so I can see where having no income could make things difficult if you’re relying on your income from wholesaling. 

I’d suggest focus on a very specific area that you can learn better than some guy sending out 40,000 letter a month.... I get them, people who have sold to me get them.... they get thrown away. I hand write mine.... slow.... but I get about 9% call back. I put them in pretty envelopes and play off the excitement someone may have for opening up a birthday card or invitation or some kind. 

There are a million different strategies... you can make it an art or a science.... either way, good luck and I hope to hear more about your path. 

Cheers, 

Jake 

I've done two House hacks in Ohio less than a year apart... one FHA(feb2017) on conventional(5% down, Dec 2017), refi'd first FHA hh and am good to do another FHA(about 2 years after 1st hh).... this all with the same lender. I'm trying to squeeze in as many as possible before lending gets tighter and I get sick of moving... or god forbid, have kids.

So I'm transferring 6 properties into LLCs simultaneously... a lawyer friend said, "to avoid any potential due-on-sale clause BS... you can actually contact each lender and notify/sign something saying I'm responsible for ABC LLC, and usually they're ok with it.

Has anyone done this/been successful doing this? 

Cheers, 

Jake