All Forum Posts by: Joe Stout

Good afternoon, it really seems the knowledge regarding halal investing in the investment community is scarce. I have some Muslim friends that are looking for answers to this too. I have found SukFin (sukfin.com) claims to be a sharia compliant loan provider. They apparently share profit and loss with the customer and ban all collection of interest. one of their products is called Musharaka which is a joint venture, where a bank and a customer both contribute funds — for either an investment or purchasing an asset. The profits (and the risks) are shared proportionally. It looks like this is more for actually developing houses on land you bought or major rehabs where they fund 100% of the money needed. It looks like you'd have to split a good bit of the profits with them (they're mentioning 60/40 and 50/50 splits. I'll keep searching but that's what I have for now-

Good morning, wondering why my co-worker is paying $700 in interest only payments but has been told that he can't take out any money from his $130,000 Home Equity Line Of Credit (HELOC). Don't you only need to pay on a HELOC if you have taken out the money and actually USED it?

What checks do banks do when you use that money? I would like to use a HELOC to reimburse my business partner for funding a rehab. Wanted to fully understand that process. Difficult for me to meet with banks during the day as a W-2 employee.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $390,000
Cash invested: $40,000

My first Subto-BnB deal! Awesome house, just needed about $15,000 in cosmetic rehab and furnishings. Design was breathtaking when I walked in. Found a seller who needed to leave town quickly and was able to find a deal that worked for both of us... $10,000 down and $50,000 under market value 4 minutes outside of a great airbnb city!

What made you interested in investing in this type of deal?

I was so intrigued by Biggerpockets episode 527. I must have listened to it over and over 15 times. I couldn't believe what Pace Morby was saying... and that it was legal? I just had to challenge myself to do a Subto deal!

How did you find this deal and how did you negotiate it?

Met a janitor at my day job, and being myself, spoke to him about what I'm doing in real estate. I offered $375,000 when he told me he was looking for at least $400,000 previously. He came back with $390,000 - we agreed. We negotiated back and forth about the down payment, he wanted $10,000 and I agreed. We had $34,000 left of his profit that I asked him to finance for me over 60 months. From there, I took over the loan of $346,000.

How did you finance this deal?

Took over his loan, paid the $10,000 down payment myself. Now I just pay his mortgage every month & add his profit into the payment.

How did you add value to the deal?

Did some plumbing fixes, painted the entire place, and furnished it. Replacing sunroom windows soon. Put about $16,000 total rehab into it- it was really fine to begin with.

What was the outcome?

It's now projected to be a cash-flowing Airbnb and I just listed it tonight! I just recently got my short term rental license for this city so I am excited.

Lessons learned? Challenges?

It was a little bit of a challenge for my title company to do a remote closing with him but they figured it out. Probably should have gotten an inspection done on the house, it would have saved me from some surprises. Luckily I lived there for 3 months before listing on Airbnb and found (most) issues. Guests will let me know if I missed anything!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I'd recommend True Title Company in Columbia, MD.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $205,000
Cash invested: $35,000

This one I bought with a partner I met on facebook and I let him do my taxes for me. We were having calls every week and he told me this market was his favorite vacation spot and he wanted to buy something here. So I went to find a deal. Built a team, etc. He was the money partner I was the hustle partner and bought it with a 10% down vacation home loan in my name. We drove a Uhaul from MD to OH with all this furniture we picked up at this yardsale for like $2500. MAYBE the most fun Ive had.

What made you interested in investing in this type of deal?

I really desperately wanted in on the Short Term Rental space. I had been studying it for a year prior and it was time to take action!

How did you find this deal and how did you negotiate it?

Found it on the MLS and all we negotiated for was 3% closing help, which saved us $6,000 in closing costs!

How did you finance this deal?

10% down payment vacation home loan, partner brought the down payment, closing costs and rehab money. Bank brought the other 90% and I was in it just for my hustle!!

How did you add value to the deal?

We replaced the floors, we added backsplashes, we painted all four floors, put up lots of new decor, and we cleaned all day and night. Big shoutout to the cleaners. They are literally still painting the trim 8 months later to make this place look flawless.

What was the outcome?

We now have a cash-flowing asset. We didn't project much more than 60% occupancy in the off -eason. We're getting 100% in march and 73% in April in a market where summer is the peak season. Unbelievable. We really were caught off guard by the amount of opportunity here.

Lessons learned? Challenges?

Yes, needed much better systems to keep track of the contractor, what all was being bought and by who. There was mass miscommunication which I take full responsibility for. I let my other projects take over too much!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes I would love to recommend Brian Bower - OH lender & Shelly Recker OH Agent.

Thank you so much for the advice. I'll be looking to get more quotes, look for a cheaper fix (I saw on youtube that we could possibly fill the hole from the inside with Hydraulic Cement which may be a 10 minute fix!). I appreciate even the people who commented "I agree with this^^", it's very helpful and adds to the credibility of the original answer. This is also a long distance investment.. so I am leaning on others a lot more than if I could be on site to take a look. But pictures/videos should give me enough info. Thanks again!
 

Hey everyone! Got a basement leak in my STR and the cleaner who had 14 yr construction experience is saying I'll need to hire an excavator to deal with the issue from the outside. It seems to just be a small leak in my bathroom from heavy rain the night before and was trying to fix it with hydraulic cement from the inside. Unfortunately I don't have any pictures but it's a stone foundation. Seems pretty drastic to bring in an excavator here. Any ideas?

Thanks!

Amazing, thanks for sharing. When locking up this deal, what's the process? From writing the LOI to Closing, what's involved? How long do you have to gather the deposit needed (I'm assuming it's somewhere in the neighborhood of 1%)? Do you do an earnest money deposit and do you need to submit that to be held in ESCROW until you close on the deal? How much is required for that usually? How many days did you have to fund the deal? How did you fund the deal, were you able to set up an LLC and then register with the SEC? When you're funding this deal and holding your investors money, do you open a business bank account / use your business bank account and have a separate account to hold everyone's money until closing day? Do you continue to collect the rent from your newly gained tenants in this business account in a separate account from your funding and then sort that into multiple Repairs & maintenance accounts, Capex accounts, etc. When you are running something as big as this how does book keeping work? Is there a partner that does it or do you hire a company and then give them access to all your accounts?

 For sure, just wanted to take this to social media with the same tagline haha. Great point that the hosts who succeed the most bend over backwards to ensure you have a great stay.

LOL!! That's great hahaha

I'll go first: I stayed in Lusby, MD on a lake for a couple nights as a last minute booking for a work trip. The pictures were unbelievable and I could not wait to get to the house. It was a super quiet area, a shared house booking but I had the entire basement. I walked into a glass sliding door which was cool and entered into a studio apartment basically. 40+ inch TV was mounted and swung out towards the bed which was super nice. I could control the lights outside for the seating area and the fans which kept mosquitoes away. Waking up on the Lake was amazing and I even got some fishing in before work. Check in and check out instructions were super detailed and helpful. Everything was labeled correctly and helped to guide me learning to live there. Had a huge desk with a desk top which was nice for working, a full kitchen, fridge, etc. Had all the supplies to live there for a month if I wanted or longer. They even had menus on the table so that when I was hungry, all the best restaurants were laid out for me. Exceptionally clean and smelled nice. Only downside was that the water smelled a little funny from the sulfur since they were on well water. 

None of that really mattered because what made the stay was the host. I asked the host about fishing, he actually offered to go with me! We hungout for hours, he brought drinks, his dad lined and supplied rods, and I had a fantastic time. It was truly a one of a kind experience and an easy 5 stars. The guy running it was 21 and was a super host on airbnb. Had amazing hustle and we talked real estate the entire night while catfishing. Great people and led to great times.

Hopefully hosts can use this post as a way to boost their airbnb listings.