All Forum Posts by: Jim Kalish

Hi @John Wijtenburg. Investing in buy and holds, or rentals, has 2 advantages. Being able to get to the point of living off of the cashflow and establishing a retirement account by having the properties appreciate in value while someone else, your renters, are paying down the mortgages. Personally I stay clear of SFH. They make great flips. When a tenant moves out you are on the hook for the mortgage. And if you jump at the first person that comes along who wants to rent it you run the risk of learning all about evictions. If you invest in 2-4 family units the cash flow is usually better and you are protected against those times when someone moves out. But you will still need more than 1 property. And it doesn't happen overnight. So you are on the right track but its going to take work. You should start, or continue if you already doing this, reading everything you can on the subject. There is a really good book the BPs bookstore on on Amazon called "Buy, Rehab, Rent, Refinance, Repeat" by David Greene. And if you become a Pro Member of bigger pockets (no, I don't work for BP) you have access to past webcasts that talk about this topic at length. Education, just like cash, is king.

Best of luck to you in your investing future

Hi @Bryan Rodas, Welcome to the world of investing.  It can be a challange but it can be very rewarding.  I'm going to say what everyone else is saying to just to reinforce it.  BRRRRRRRRRRR.  There is a really good book titled just that "Buy, Rehab, Rent, Refinance, Repeat" by David M Greene.  You can find it in the BPs bookstore or on Amazon.  Its available as an Audible book as well.  I listen to it while I'm driving around.  The book gives an example showing how leveraging your money to buy multiple properties with mortgages instead of putting all of it in 1 property creates a lot more passive long term income.  Flipping can be fun and generates some quick cash but once you stop flipping you stop getting paid.  Once you have properties that generate cash flow all you have to do is pick reliable tenants (this is key) and take care of them.  Since you guys are contractors the construction is the easy part.

Good luck.

Hi @Christian Stoecklein. Thanks for the response. My goals are 2 fold. It is for asset protection. We are already running the income and costs through the LLC. But I also want to be sure that when I pass there are no are issues associated with who owns the properties. My son and I are partners and he will inherit the properties if they are still in my name. But then that could trigger the due on transfer clause on the ones that have a mortgage. I know I can put him on title now and add him to the notes but then that would impact how many other notes he can hold in his name if we don't get them into the LLC.

As for why a line, I want to both get a term note on the currently mortgaged properties and at the same time get a line of credit.  I have that now for the homes in my name but I have a couple more I want to do that on but no one is giving out HELOCs right now.  And in the market I'm in, Charlotte, NC, cash is king.  Investment properties are selling in a couple of days and closing in 10 days.  Getting a conventional or for that matter private money loan is to slow and if someone is comparing an offer of cash with an offer that has a loan attached to it they are going for the cash offers.

Thanks for taking the time to share your thoughts.

I'd buy these all day!  Some Kilz odor blocking primer, a coat of paint and LVP throughout.  100k profit! BAM!

Being  able to actually do the work isn't an absolute must.  For that matter not being able to do it can be a plus.  You aren't tempted to try to do the work yourself.  I know we did all the work ourselves on our first few homes.  It took a lot longer than it should have and on a couple we went back a few years later with subs to fix what we thought we had done right.  But its a must to either know what it costs or have a partner or at least a GC you can bring in when looking at places to figure out what a rehab will cost.  Rules of thumbs are great when you deciding which properties you want to take a closer look at.  You can even make offers with that info. But if you get the deal use your due diligence period to sharpen your pencil.  That's your last chance to really pin down the costs.  The old saying you make your money when you buy is more true today than ever.  You can't buy a house thinking you can change your plans once underway to save money.  That's a recipe for disaster.  Make a plan and then follow it.  BPs has some great calculators for analyzing deals.  Try them out. 

Best of luck on your investing!

Hi @Jordan Whitworth, thanks for the response.  Yes, I do have an umbrella policy.  But my lawyer has strongly urged me to get the properties out of my name.  It reduces personal liability and its a lot easier to deal with when I pass.  Let's face it, no one lasts forever.  And because of COVID everyone seems to have suspended HELOCs on rentals.  If I could find someone to do HELOCs on a couple of my properties in my name I would be willing to to do that.  But I've been making calls for days and no luck.

Best of luck on your investing!

Jim

I've been taking a close look at hard money recently.  12-15% with 3-5 points is pretty common.  Private lenders are running 8.5% plus a point or 2.  So what you are seeing is pretty common. Check out lenders like Lending One and Lima One.  If you google Private Lenders for Commercial Real Estate loans you will get a long list.  Most of them are going to want you to have some skin in the game.  Expect to come up with 25% or so down. And most will take 3 or 4 weeks to close.  My first hard money loan several years ago was 16% plus 3 points.  And it was due in 3 months.  Which of course I missed.  So that cost me another point.  So 8.5 is pretty good.  I'm finding the harder part is refinancing into a term loan.  Best of luck

Morning AJ, thanks for the reply. We've had LLCs for our various companies for several years now. SO we have that piece of it pretty much under control. I was asking folks how they hold their properties, in an LLC or in their name. When we started out we didn't know any better and and we didn't have any track record as a company so I bought the houses in my name. Now that we have some additional capital and since I'm retired additional time we want to grow the business. But first we want to get all of our ducks in a row. I've been trying to find a lender who will refinance all 3 outstanding notes into our LLC and at the same time give us a substantial line of credit collateralized by the properties. I thought I was all set with US Bank but then the underwriters pulled a switch and dropped the amount of the line to a point that we couldn't accept it. So now I'm looking for a lender who will give me a line on the last 2 properties we have that don't currently have a line against them. If you don't mind sharing how do you hold your properties, in an LLC or your name? And what lenders do you use?

Thanks,

Jim

Hi follow Charlotte investors. It seems rehabbing has gone through the roof. So we are trying to increase our list of reliable subs. The crews we use are great but really busy. So any contact info for carpenters, electricians, plumbers, HVAC, roofers and especially really good punch list/handyman type guys would be greatly appreciated. Most of our properties are in the Charlotte, NC area.

Thanks

We currently have 5 properties with 9 doors. Three of them have mortgages that are in my name. We have lines of credit on 3 of the 5 and I'm trying to find someone to give us lines on the other 2. We also have been trying to find a lender who will refinance the 3 notes into our LLC and at the same time give us a substantial Business Line of Credit collateralized by our properties for something in the neighborhood of $500k. Between COVID and the way the rates and home values are right now I can't seem to find anyone to do either. As I continue to look I was wondering what others are doing. Are you holding your properties in your personal name or in an LLC? What are the legal and tax pros and cons? Our LLC is a 2 person partnership, not a sole owner.

Thanks in advance for your thoughts

Jim