All Forum Posts by: Stone Jin

@Clarence Gong I would agree with @James Wise, while you can certainly find homes under 50K in those markets, you really need to understand the demographics of the neighborhoods.  Once you get below a certain price point, the return on paper is always way better than the returns in reality.  

@Diandre Pitts a good deal is all relative. What's a good deal for you may not be a good deal from a local guy. Sounds like you are trying to whole sale it? Does seem to have a lot of margin and also without knows the location ARV of 145K on a 1200 sqft house sounds a bit high. For 145K I can buy a 1500 sqft house in Sylvania that'll rent for $1400.

I use zelle through chase and it is connected with my business account.  I access it through my bank's app and not the zelle app (is there a zelle app?)

@Steve Vaughan If you feel like a loser, then I really feel bottom rung.  HA.  There has been several threads on BP about plans for 2019, but this thread is the winner for setting large goals.  

My goals for 2019

1)Set goals for 2019 with my wife

2)Work on personal development(health, more time with family etc)

3)Sell some of our properties in Phoenix and 1031 exchange into SFH and small MF in the midwest

4)Increase our exposure on passive investing (notes/crowdsourcing/etc)

If you want to be a doctor or chemist or professor then you have to go to college, no real way around it.  But it sounds like you want to hustle like the rest of us and having a degree almost provides no value in what we do.  I doubt wholesaler or realtors are showing off their diploma to perspective clients.

If you really want to jump into these waters, then you have hustle and then side hustle until you have some working capital.  At which point more options will present themselves.  

@Jonathan Cox  Cashflow is based on rent not value of home.  Say you were to buy this house for 60K and put 10K into it, you are in it for 70K.  You say the house is worth 80K and you ask the bank to cash out refi at 75%, so they give you 56K back(60K - minus loan costs), you are still in the deal for 14K.  Which is okay.  The real question is how much are you cashflowing.  If the house is going to rent for $1000, then you might cashflow $400 a month, so $400 a month is $4800 a year on a 14K investment, cash on cash is like 30%+ which is ridiculously good.  Say you can only rent for $700, then you cashflow $100, which will give you a theoretical 8% cash on cash, which is pretty risky.  

If you mortgage the property in the very beginning, you would have to come up with 25% downpayment so 15K on 60K purchase price, on top of that you have 3-4K in loan cost appraisal etc, so with the rehab of 10K  are now in the deal for 30K, so you refi after the rehab spending another 3-4K on second loan and the bank give you back 56K which would pay off the 1st loan of 45K, so you would get 11K  back which leaves you in the deal with about 19K, then the math from above applies.  Most investor only want to pay the cost of the loan once so they pay cash and then they cash out after, you can certainly do it but it'll just cost you 4K more.

@Jonathan Cox There are many different ways to structure the partnership.  Depends on what each party brings to the table.  Some bring only money, some bring only sweat/deal and some split it 50/50, it all depends on circumstance.

Generally speaking the BRRRR works when you buy the property for cash under market value then rehab it where your total all in cost is about 75% of ARV, then refi out the 75% of appraisal.

@Jonathan Cox 20% downpayment? Yeah there are loans like that but those are not conducive to the BRRRR strategy as you would need to have a second loan once you've rehabbed. Most BRRRR people pay for the property with cash, then fix up and rent and then get the loan and then repeat.

You can certainly get 2 loans 1 for purchase and 1 to refi, however it's more expensive that way.  You can maybe do a deferred closing but then you also need cash up front for the purchase and rehab.  

Again I'm not sure I answered your question, but let me know if you have any others.

@Michael Ablan Thanks for responding.  Real estate as my wife puts it is my hobby job.  I'm not looking for massive growth but rather just invest as things come up.  I do have a full time job outside of real estate so deal velocity is not something that bothers me.  However with that said, I do want to deploy capital in the best use of capital.  

But I hear your point! Thanks

@Frank Wong Thanks for responding. That's generally how I feel, if i'm not going get rewarded what's the point. However we are looking to diversify the portfolio and also to lessen my management responsibility. We are also looking at long term play for AZ with water/drought and general warming up. I'm also looking at where we are in the market cycle vs where another city is in their market cycle. I feel that some of the condos we own have probably peaked or is near peak and it may be prudent to trade up to SFH or MFH.

We have started investing in the midwest but in a market that does not have strong economic growth, but it's steady.  We are exploring some other markets that have more growth but the returns will not be as good (equals that of phoenix), but will likely have more upside on appreciation and rent growth.  

Maybe by the time we decide the choice will be obvious :)