All Forum Posts by: John Fider

Just want to confirm a few things, your rate for 15 yrs is 5%?  

You don't have any fixed expenses like utilities or lawn care, etc?

And finally, this is not a duplex correct? The pic shows two doors. So I imagine its just the 1 door you're purchasing?  If thats the case, is that a shared driveway I see to the right of the photo?

Nice! I'm a RN myself here in Harrisburg, PA. I used a HELOC on my primary residence to fund my recent townhome deal. Now its a rental with a modest cashflow.

How will you fund yours? Will you self manage?  Will you consider what @Michael McIntosh suggested which I recommend myself?  If I could do it over, I would definitely try a house hack.

On episode 442, Bryce Stewart discussed how anyone hiring a non insured worker (ex: shoveling a driveway, handyman work, etc) should have them sign a workers comp waiver form in the unfortunate event that they get injured working on your property.

I've asked my insurance guy and he has never heard of it. Has anyone used this form before?

I just asked my insurance guy and unfortunately he has never heard of it. I'm about to post a very similar post in the forum to try and find anyone in the BP community who has utilized this form.

Investment Info:

Townhouse buy & hold investment in Middletown.

Purchase price: $75,000

2bed 1.5bath townhome in Middletown, PA. Used a HELOC to fund the deal. (Thats why I say "semi BRRRR" since its not cash bought) A property across the street just sold for 127k, so I should be able to do a cash-out Refi in about a month to payoff most of that HELOC, which I will reinvest in the next deal. It will also increase cashflow by $50 per month.

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

Townhomes are attractive as there are no tenants on top of each other. There is also less outside maintenance as I will be doing lawn upkeep myself in the beginning to keep my costs down.

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

Through inside the real estate office I work in.

How did you finance this deal?

HELOC on my primary residence

How did you add value to the deal?

Reno and being able to get to the deal before anyone else, allowing for a good deal at the outset.

What was the outcome?

Currently cashflows $200 despite the monthly HELOC payments. Will do a cash-out refi in about a month which should pay off the HELOC (So I can reinvest it in the next deal). Cashflow should also increase by about $50.

Lessons learned? Challenges?

Use more subcontractors instead of relying mostly on sweat equity. This allows for a faster reno, less time to get the property rented, and thus less holding costs.

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

As an agent, I worked for myself. So if you have any realtor needs, I can help.

I did a HELOC since I didn't have any savings at the time. And I did not have a deal either. With a HELOC I could let it sit there and not incur any cost while I looked for a deal. There was no closing fees either. Dont know if other banks do closing fees on a HELOC.

I've since used the HELOC to pay for DP and reno and that property is cash flowing (small bec of HELOC payments) but still cashflow.

I'll be able to do a cash out refi and payoff most of what I owe on the HELOC in a month or 2. Will increase cash flow by about 50 dollars since mortgage cost increases too.

I was watching this youtube video from a Canadian investor I like and he said... "Every property you buy better have its own bank account." I was like Whaaaattt?    Is that a thing that I've never heard of until now?  Does anyone else do that? 

I get how it can simplify accounting as each property is separated, but that just seems crazy to me. 

 I guess I was overthinking it. Thank you Tim. It makes more sense to me now especially how you explained it with that scenario.

Say you had 2 properties. Property 2 suddenly needed a new roof. How do you know if you've saved enough in cap ex funds to pay for it?   I can't imagine each property will have its own separate bank account. 

I guess I want it organized enough that I won't accidentally dip into another property's funds when I need to make upgrades, or if I had a vacancy, I know how much of the vacancy funds I've used up and avoid dipping into the Capex funds.

Do you use a program like spreadsheet?  Ideally I'd like one that's user friendly, one I won't need to make formulas for to make it easy to plug data in.

 Thank you Bill. I was going to do that, but was having second thought. It appears to be working for you, so perhaps I'll pull the trigger.  Thanks again!