All Forum Posts by: Jesse Waters

I would go ahead and sell it/flip after you fix it up.  If you can place tenants in prior to selling, then to me, as a potential buyer it makes it more attractive.  You will also be able to start recouping the cash you put into the place.  If it doesn't sell, you can do a cash out re-fi, get all your money out plus some extra, have a cash flowing property, cash in hand and be ready for your next deal.

They have my personal residence off by about 15%.  I don't rely on the zestimate too heavily.

Ben, we are getting ready to start this process.  I'll PM you and send you some of the links I have to willing lenders.

JW

Welcome to the site, always good to see other SC investors on here.  Buy and hold is a great way to gain long term financial freedom & secuirty.  Fix-n-flips are a good way to raise capital & a good way to get started.

Going back to the blanket loan option. I did some research & most lenders want the loan to be to a LLC. This means that you would have a single loan to a LLC and not your personally. You would have to transfer title of all your properties to the LLC but you would free up your personal credit. You could then start purchasing properties using your personal credit again & once you max out roll everything over to another blanket loan.

I have one business partner for my real estate. The first two properties that we bough we are both on the mortgage. The third property we purchased I am the only one on the mortgage. I know that this removes him from the risk of the mortgage on that property, but as a business strategy it works for us. When we purchased we each provided equal amounts of cash for the down payment. I explained this to the bank when we purchased and they were ok with it, especially since I had enough cash/cash reserves for the deal on my own. We run everything through our LLC & hold title to all our properties in LLC.

When we go to purchase our next property we have the option of buying it on my partner's credit, which has less mortgages listed than mine. We are also planning on having him house hack our next 4 plex. He will live in one unit & pay fair market rent to the LLC as if he was just a normal tenant. This will help us avoid any issues with dividing up who paid what or equity questions.

Going forward from that he can house hack again & eventually we will put all out good properties under a blanket loan, use some equity towards the purchase of another property & sell off our low performers to 1031 exchange them for better performing properties.

When it comes to structuring a partnership you are really only limited by your creativity.  I have even approached my dad and asked to borrow his credit, basically I buy, he signs.  

@Kimberly H. This is just my personal opinion, but I wouldn't really want to go after a tenant in court, unless its a high rent property & you have longer turn around time.  I might consider it if they trashed the place beyond what the security deposit would cover.  You also have to look at what it would cost you to get that money in legal fees, court cost & your own time.  I am not saying don't do it, just saying that I wouldn't under normal circumstances.  I would (and have), however, threaten to take a tenant to court if they are threatening to move out.  

One of my units is currently turning over.  The upstairs carpets are in good shape, but the down stairs carpets are in rough shape & need to be replaced.  I think I am going to bite the bullet & go with tile that looks like hardwood on the lower level.  Tile seems to be very durable & should save me money in the long run.  Looks like it will be about $175/sqft plus installation.  Fortunately, its on a slab, so installation should be fairly simple.

Welcome to BP. REI, in my opinion, is the best way to a secure future. If you are starting out, I would highly suggest house hacking starting with a 4-Plex, live in one unit & rent out the rest. Buying as an owner occupant you will be able to get better financing terms.

Best of luck.

JW

When I am analyzing a property I tend to use 10%.  In my market it seems to be lower than this, but I like to make sure that the property is going to work out with very conservative numbers.  I have a townhouse that has only had 10 days in 4 years, and I have had properties go much longer.  My overall portfolio average would be about 8%.  Still, go with 10% when you are doing your numbers and you should be safe.