All Forum Posts by: John G.

Okay. Closed on property #1 in October (Milwaukee). And and in talks with PARC for #2. Looking for another SFR in the Indianapolis Area. If there are any native Indianapolites(?). I’d love to get opinions on Marion County in terms of home and rental values!

@Clayton Mobley I've always been pretty risk averse. But not so much as to not invest in RE. And the TK model seems to be a good compromise.

Just looked you up, Birmingham is on my short list of cities to diversify my portfolio. I may contact your company in the future.

And hopefully your rehab team does a thorough job inspecting pre-and post rehab. I had a bit of an issue with my TK. It was a mostly good experience. I see profits hitting my account in February after closing in October.

@Warren A. Just read through this post. As I'm in a similar situation. What'd you end up doing?

@Clayton Mobley I supposed I wouldn't expect an investor wanting out a few short years. But I can see an investor simply wanting to wanting to liquidate for another investment or perhaps a 1030X. 

"Or, if you leave older capex items in place for now, you'll definitely end up with higher maintenance costs down the line"

I suppose I'd pay for this up front or defer these costs for later anyway, huh.

By mark up, I did mean during the purchase+rehab, since I wouldn't be doing any rehab - at least nothing major.

The TK I purchased last year was actually under the appraised value, so I'm good there. Sounds to me like, option 1 is a bit safer of an investment. So I may just move forward with another TK afterall. (I'm looking in Indianapolis. My first one is in Milwaukee).

Coming across a related situation myself. I purchased a (capital "T") Turnkey property late last year and for me second I'm considering a few different options. But as far as a SFR, there's:

1) Buy another Turnkey (will need rehab, then tenant placement)

2) Buy a property that was purchased Turnkey from another investor in the past, but wants to liquidate.

Assuming that property #2 is totally fine, cashflows and is currently leased to a tenant. I realize that this may need some light fixing up here and there since it's not freshly rehabbed. But other than that, are there any downsides to option #2 

- Wouldn't I save $ by not paying for the Turnkey provider's markup?

- And wouldn't I cashflow from day one?

@Brian Garrett Right!

@John Warren Thanks for the advice!

Thanks, @Brian Garrett. I understand. All said, still a pretty good deal I think. I think.

And I just realized what would be a 20% down payment on a mortgage for a new property purchase is the 20% of the value of the house when refinancing.

So at 75% LTV, profit is only $5k. Is that still considered a good deal?

What about breaking even or slightly under?

70% LTV would bring the obtained mortgage of $126k. So I'd have $4k total in the deal. This sounds great still having a (hopefully) cash-flowing property that I "bought" for $4k.

But wait, does this scenario require a down payment (ie 20%)?

@Brian Garrett @John Warren

lol @Brian Garrett . I know. That's why I started off that reply with "I know this is the BRRR strategy"

I just wanted to make sure I'm understanding the $$$ aspect at a high-level. (Noted, that 70%-75% LTV is more realistic)

So, my #s above (conceptually speaking) are correct, yeah?

@John Warren I know this is the BRRR strategy. But I'd like to layout a super generic scenario below (I know there are fees and taxes etc). Let me know if I have my thoughts straight!?

1) Buy a fixer-upper for $100k

2) Put in $30k in rehab. Total cash in is $130k

3) Place a tenant

4) Appraises for $180k

5) Obtain ASAP an 80% LTV mortgage of $144k

6) Get initial $130k cash back

7) Walk away with $14k in profit (like a house flip built into the deal), and a cash-flowing property (assuming I worked out the numbers correctly)

Am I making sense?