All Forum Posts by: Jessie Dillon

hi! im located in MA and am investing in chicago for the cashflow. the worst deal there looks amazing to me through the lens of a MA girl hahaha. i was very resistant to going long distance, but am so happy i did. i had also looked into those cities you listed, but the partner i was buying this last one with was ultimately most comfortable with chicago as she travels there for work sometimes. one thing to just keep in mind is that it's the c/d areas that look best on paper anywhere, and look AMAZING in those cities, but you have to factor in increased volatility due to nonpayment, late payments, etc.

it sounds like the post-BRRR cashflow would be about 500/mo, right? IF your monthly debt service cost is the same after the refinance. some things to note:

- consider annual appreciation for each property if long term wealth-building is a priority for you

- consider how easy or challenging it will be to manage each property based on location, neighborhood quality, etc

- consider whether or not you can handle the 9mo of negative cashflow with the BRRR

- consider how much money you truly have to start with right now and if either situation will leave you feeling strapped

- consider than renovations usually take twice as long and are twice as expensive on your first try

- consider that there are other deals out there you could BRRR better, so it's not one or the other, it's one or the other or neither/wait

- consider that lots of banks will allow you to do 80% LTV for the BRRR refi, but you'll also be paying closing costs

it sounds like you are renting it out right now against the HOA's owner-occupied rules. so first and foremost, i'd consider not renewing the current tenant, and selling when the unit is vacant. do you really want to be in a position where the HOA finds out & either hits you with a huge fine OR makes you violate landlord/tenant laws and kick the tenant out mid-lease?

i totally get what you're trying to do and love it. it sounds like you'll be wanting to sell not necessarily with seller financing, but with a sub-to/hybrid model, right? the seller will take over payments on your 30y loan & make an additional monthly payment to you towards your equity? if so, you definitely would not want to loop the lender in on this plan. sub-to deals are not done with the lender's involvement; they would call the note due. 

hi! kind of late to the game as it's now 9/1, BUT, so long as you didn't already commit the unit to someone else & that move-out date would conflict with their move-in, then i would allow him to stay for half a month's rent paid by EOD 9/1. for the moveout, i'd do the inspection yourself, and really take into consideration 3 years of wear and tear & that he was a great tenant. i see a lot of people try to nickel and dime about every little thing with the move-out condition, and not only is it unrealistic, but many states actually dictate what you can/can't keep portions of the security deposit for. something to read up on before trying to keep any of it!

hi! it's highly highly unlikely that it's AGAINST THE LAW for you to withdraw money from it. unless there's some weird state-specific law. i'm in MA. there are absolutely big tax penalties though for early withdrawals. HOWEVER, sometimes pulling the money out and having to plan for the hit at tax time, is still totally worth it depending on what type of RE deal you're planning to do with it. for example, if you're going to do a killer flip long before you have to file your taxes, maybe the profits even after paying the penalties are a no-brainer. i'd suggest partnering with a great cpa that has a lot of real estate investing experience, and having them help you weigh the pros and cons, and see exactly what you have to do to make it worth it. :)

FOOD FOR THOUGHT FOR ANYONE CONSIDERING GETTING INTO A PARTNERSHIP THIS YEAR: 

partnerships can be scary! unless you have an attorney involved that you know and trust, who has tons of experience with real estate / business transactions, you may worry that your best interest is not being protected, and "you don't know what you don't know!"

a pro tip that i've gathered is to look into term life insurance policies for each partner. here's why:

partner #1 gets a term life policy with partner #2 listed as sole beneficiary, vice versa. they determine term length & value based on about how long they plan to hold the property, and about how much equity each of them will have in the deal at that time. 

partner #1 passes unexpectedly. rather than partner #2 having to default to going into business with #1s family, it's written into their partnership agreement / trust docs that in this situation, #2 has the option to buy out #1s interest in the deal. #2 uses the proceeds from #1s life insurance policy, to buy out their half, and #2 is now sole owner of the property.

these are the things that no one wants to talk about, but discussing all possible 'worst case scenarios' up front with a potential partner can help you avoid some sticky situations. it also provides all parties with peace of mind, which allows for way better business decisions to be made.

this is not legal or financial advice; this is a suggestion to talk with your insurance broker and see if this would suit your partnership's needs. 

and remember: partnerships can take any form! work with your attorney to figure out creative ways to meet everyone's needs. i've learned this year that real estate truly does have to become a team sport for every investor, at a certain point, if they want to do bigger and better things. BPCON 2022 was what opened my eyes to that, and it's been PIVOTAL for me this year, so i'm eager to see what big takeaway i'll get from BPCON 2023! 

if you're interested to learn more about my personal partnerships or talk shop, i can be found on IG at @jessiedillon_. i share tons about my journey on there and love connecting with other investors!

direct mail, cold calling, cold texting, voicemail drops, networking events, and getting on wholesalers' buyers' lists!

i consider both tools but put the most emphasis on a third: facebook marketplace! that's a better representation of what rentals are going for in my area. i trust that more than either of those other two tools. :)

i see a lot of people (outside CA) using ~$75/squarefoot for a gut renovation. If you parceled this off, sold the vacant lots, and sold the fully renovated property, what would you walk away with after spending 75/sqft on the rehab + holding costs?