All Forum Posts by: Jim Kalish

Hi Charlotte BP family.  I'm hoping I can get a budget price from a couple of licensed plumbers in our area so I can decide if I want to go forward with a project. I won't hold you to the number.  Just looking for a budget.  I have a small single family 3bd - 1-1/2 bath on a crawl.  The 1/2 bath backs up to a closet that is 28x54.  I did the layout and a 32x54 pan will fit.  So the idea is to remove the petition wall between the 1/2 bath and the closet and close up the closet door.  I would do all the demo and carpentry including installing the backer board and the tile.  What I would want the plumber to do is install the pan (I'll supply it) and do the rough and final.  I do want to permit this project.  I will supply all the material except what you will need for the drain/waste line and the hot and cold lines in the wall.  The new shower drain will be 3' from the the existing drain for the tub in the bathroom which is just on the other side of the wall.  Not sure if you will need a vent.  Please advise on this.  If you need a simple sketch I can supply that.  If I go forward with the project I'll definitely invite you to bid.  My plumber is now working for a bigger company so he isn't as available as he used to be so I'm looking for a good plumber to add to the team.

Thanks for the help,

Jim

COVID has practically wiped out the HELOC market on investment properties. I've called over 900lenders on the last few weeks and there are. 3 that say they will do a HELOC on rentals in a personal name. They are TD Bank, PenFed, and Harris Bank. They all have limits on the number of notes you can be holding. TD will only do one if the total including the HELOC is 4. PenFed is also 4 bit not sure if that's all notes or just HELOCs. Harris s is 3 HELOCs with them. As soon as I close on a cash out Refi that's in the works I'll start with Harris. My plan is the same as yours I think. Use the HELOC to either buy in cash or as a down payment and rehab money and then do a cash out Refi into a 30 year term and pay back the line to do it again.

Best of luck!

Hi BP family.  I've been calling lenders for the last 2 months trying to see who is still offering lines of credit on investment properties I hold in my name.  with the increase in home values here n Charlotte, NC I have a lot of equity I want to tap.  But I don't want to do a cash out refi because I really hate paying on money I'm not using.  My intent is to use the line to either be able to buy quickly with cash or use the line *** down payments and rehab money on fix and flips or for properties I would buy with private money and then refi after rented.  If anyone has been able to actually get a line on their rentals I would be eternally grateful to get some info.

Thanks in advance

@Micaela N. Wolfe First, welcome.  As I'm sure you can tell BP is a great place to learn.  Just about everyone here is willing to help.  So ask as many questions as you want.  And I want to commend you for wanting to educate yourself before just throwing money at a property.  Kudos!  As mentioned earlier your goals and method to reach those goals are key.  FLipping is a good way to make quick cash but it can be very time consuming and risky, especially for a newbie.  Long and short term rentals are a great way to build generational wealth.  Its not uncommon to use both methods, flips to increase working capital and rentals to build passive income.

Now as for not having rehabbing skills, it helps but its not absolutely necessary.  A lot of the really successful investors never pick up a hammer.  The key is to build a good team consisting of a General Contractor, Realtor, Property Manager, Accountant, and an Attorney.  I can suggest a few good books to read and jump on the BP webinars.  They are free, very informative, and never ty to sell you anyhting (well, they do end with suggesting you join as a PRO but they give you a discount code).

As for managing your properties, once you get more than 10 or so it becomes very difficult to find the time to do it yourself.  So a really good Property Manager on your team becomes crucial.  Your goal should be to get to the point that once you make the deal your team buttons it up for you, doing the repairs, selling or renting, and managing the ones you keep.  You can't do this on your own.

Here are some books

For inspiration and mindset there is Rich Dad Poor ad by Robert Kiyosaki.  He has a 20th anniversary edition out now.

The Book on FLipping Houses by J Scott

The Book on Estimating Rehab Costs by J Scott

Buy, Rehab, Rent, Refi, Repeat (BRRRR) by David Greene

All of these are available at the BP bookstore, Amazon, or any of the arger bookstores

Also, if there is a local Real Estate Investors Association group around you, join it when it is safe to go to large group meetings.  You will find a lot of very experienced investors there to talk to.

Best of luck!

Thanks @Jorge Campos

People in Charlotte think their homes are made out of gold :). And unfortunately way too many newby investors believe them. Like you I've seen bidding wars and people chasing deals that they should have let go. Your best bet is to find off market deals. That way you eliminate the competition and pay a fair price. Its a lot more work than trying to buy off of MLS but much better returns.

Like @Jody Sperling said, look into a wrap.  You not only get the cash flow, the new owner has all the headaches.  But be careful.  There is a big difference between a wrap and a subject to.  A subsect to can put you behind the 8 ball if you try to get another mortgage.   A wrap has the same outcome but you show income to offset the expense.  

If you decide to keep renting or rent something else shop around for the PM costs and figure that into your analysis.  We manage our own but its a very time consuming job and you have to have the right mindset to deal with tenants.  Fortunately my son does.  I sure don't.

Best of luck

@Jacob I Strauss D4D is a proven method of generating deals but its not for me.  Very time consuming unless you can afford to hire a bird dog or 2 to do it for you.  There are a lot of other ways to generate leads that are also proven to be successful.  Using software like Propstream or DealAutomator are more expensive than D4D but you can generate a targeted list anyplace in the country and get out a lot more mailers, emails, and no-ring voice mails.  And these types of services do all the skip tracing for you.

As for leaving postcards at the resident, it all depends on if the person living there is the owner or a tenant.  Most likely the tenant will just toss it.   For that matter most owners toss it too but you are more likely to at least get it to the right person.

As for financing, it will depend on how much time you have, the condition of the property, and what your budget is.  You should compare costs.  Loan Depot's rates are going to be a lot less than hard or private money.  But they will take longer and will require an appraisal.  Private money lenders have higher rates, around 8-9%, but are quicker.  Some will require an appraisal and others will go by comps.  And then there are true hard money lenders.  Most will close in a few days.  But it will cost you big time.  Double digit rates and points.  So each deal will be different.  And don't overlook creative financing like the owner financing or a wrap mortgage.  CleverInvestor has some really good training on these and the price of their training is really good.  I got their creative financing course for 100.00.  And I felt it was very complete.  Not just a big sales pitch to try to upsell you, which is what all of these 4 hour so called seminars you see all the time.  But be careful with anyone who offers training for free or real inexpensive.  They will try to get you to join a mentorship program.  That can get real expensive real fasst.

Good luck!

@Robert Bryant like @Michael Ablan we also split our GC company from our investment company.  As long as its in the budget I would strongly recommend paying yourself.  Now of course if that means when you go to refi you have to leave money in the deal then you may want to reconsider.  In this case you will be out of pocket either way.  Like you said, you will be eliminating an income stream if you don't.  And that's going to be important if the homes are in your name when you go to refi.

If you don't mind sharing, who did you get your line from?  I'm trying to increase mine  since I now have 4 properties free and clear and want to tap into that equity.  But I'm having a tough time finding anyone who will do HELOCs on multiple investment properties these days.

First never, and I mean never, buy without knowing all of your costs.  It's the quickest way to lose your shirt.  @Christopher Orr pointed out a great book.  As he said you have you have current and local data.  This book is a great way to not only get a good idea on what its going to cost but also lays out what you should be rehabbing.  But when you make the offer and are into your due diligence phase having a contractor walk through with you is the best way to go until you get good at it.  The contractor will not only give you real solid numbers but will give you insight into things you may not see that could cost you some big dollars.

Good luck and let us know about your first success.