All Forum Posts by: Jeremy Kuchenbecker

Looking for any opinions or experience with laying asphalt millings over a dirt road specifically to help mitigate erosion and potholes caused from poor drainage. There's an un-maintained dirt road of about 300ft leading back to my property that has higher surrounding land which drains onto the road. We're going to level out and grade the road but am debating using the millings to 1) make it more appealing visually and more importantly 2) provide better longevity. 

Jeremy

Its interesting that we've got a lot of people saying you're over leveraged at 80% LTV on your portfolio. What if you just bought a 25 unit complex or 25 individual SFH? You would be in the exact same position at 75 or 80% LTV. IMO it is about RESERVES and what your DSCR is.

Outside of that, you're nuts for thinking about paying off a loan on a depreciating asset. Buy a pre-owned vehicle (financed, not cash) or (what I would do) get a solid lease deal on a vehicle with a high residual. You would be under warranty, have a low monthly payment, and low maintenance costs. My background is in the auto industry PM if you have any questions. 

I'm looking at a single offering of 5 duplex, 10 total units. There is big value add potential and am expecting to implement my business plan over the first 12 months. The property is in a B-/B market and are single story with garages. I've got a good feel for how garden or mid/high rise and C/B/A class are trading in this market but not this style. 

My question is: When looking at a the prospects of a refinance in 12-18 months, how would this type of offering be valued/underwritten?

Appreciate the feedback!

I called over 50 lenders in Florida and found 2 that actually offered HELOCs on investment:

Spacecoast CU and USF CU

Not precise but Spacecoast had 2 programs - total closing costs around $350  w/ desktop appraisal (add in $450 if appraisal needed):

1) 7 year draw I.O. with 14 yr repay

- 70-75% LTV, 1 yr rate lock 3.74 top tier credit then to prime

2) 7 year draw with 1.5% of principle payment, 14 year repay

- 80% LTV 3.74 top tier credit then to prime.

USF - ~$800 in closing costs not including Appraisal

1) 7 year draw I.O. with 14 repay. 

- 70% LTV Prime +1 for top tier credit.

I'm going through my second one with Spacecoast, the USF terms are from a few months ago so could have changed slightly. With rates pretty high, especially for cash out refi's, its not a bad move to open an equity line and if/when rates come down refi out of it.  Happy hunting.

I'm up to 8 units and put $50k into a syndication run by Joe Fairless out in Fort Worth, TX. I'm thinking of stashing away money in 2019 and seeing if anything goes on sale heading into 2020, we'll see. I'm 29 and really just focusing on equity growth for the next 5/6 years. I did find a lender in Florida that was able to do HELOC's on rental properties as well that I opened up with some equity access. Great program.

Its funny to look at the original post saying 100 sfr in a good market will make you wealthier than 20. As if that is a question. Obviously 100 sfr in a cheaper market will have a higher NAV than 20 units in 99% of the markets in the US. If you look at a reasonable scenario of 20 units in the mid-west to 10 in Orlando with the same NAV, over the long term I would take 10 in a strong but more expensive market like Orlando every single day of the week.  

 Jeremy

Thanks Dave. QI is set up and they were wired funds yesterday after closing. Asset value is 2x that of the relinquished property.

This all came together at 3pm EST and spent and hour and a half on the phone with my lender and never got around to calling my QI. 

A lot of people made great points both for and against the 'rat holes'. It comes down to two things, providing/finding value (buying below market, rehab, etc), and looking at pro forma returns vs. actual NOI.

Rat holes look great on paper but you run into problems with spending more time (vacancy) finding good tenants, making sure the tenants pay (vacancy), and making sure they maintain the property AND notify you of a maintenance expense before it becomes a capex expense (maintenance/capex $). 

Buy in a good area and make sure it cash flows AFTER your anticipated expenses. Does it really matter if you can make an extra $100 on one property vs the other? No, just buy something. 

I just sold a SFR (326% ROI!!) and am looking at doing a 1031 exchange, buying an off market duplex. The wholesaler has the contract for the property and is looking to do a quick close, all cash.

My question: If I purchase this duplex all cash, will I be able to pick up a mortgage with delayed financing? 

Jeremy

We are still below the previous market peak for inflation adjusted prices. Looking at population growth, GDP growth, and unemployment - we are in a strong position and don't have significant headwinds. New housing starts are up as well. Housing prices don't simply come down because they are "high". 

Follow the NAHB - they have been a leading indicator by 6 months on the previous 3 housing pullbacks. Invest where the population and job growth is moving to.