All Forum Posts by: Brant Richardson

I had to go out of state too. Santa Barbara is way to expensive for buy and hold. I have been investing in Kansas City. It has good cash flow and I expect appreciation as well. My contact there is great, keeps me in the better parts of town. Using him I can buy distressed undervalued properties, get them rehabbed and rented out. He has a business plan that gives out of state investors a lot of assurance that they are not being taken advantage of. Send me a message if you want the details of what he does.

It depends on how much the ARV is. The 70% rule is to offer 70% of ARV minus the necessary repairs. So a house with an ARV of 50k will only give you a 15k profit, too thin. An ARV of 100k will give you a 30k profit, much reasonable more. 500k will give you 150k profit, the seller will be mighty hard to find. To me, trying to use this rule doesn't make much sense. I would think more along the lines of what is the minimum amount I am willing to make in a deal plus a safety margin. Then do ARV minus that amount, minus repairs. If there is a typical price in your area you could come up with a %rule that works for you.

How is your debt to income ratio? How horrible is your credit? How stable is your job?

If you financed out 70k from the house that would only make it 41% financed. With 59% or 100k of equity still there the bank would have a lot of assurance that they would do OK if they had to foreclose. Have you talked to and been rejected by a lender? Set up some appointments and talk to a few. If you are rejected, ask what you need to improve.

Start researching how to improve your credit score and take action immediately.

If you lost your solid long term tenant you would probably have to put in new carpet and other repairs which costs $$. Then if you were vacant for a month while repairing and getting a new tenant in you lose $$. The new tenant could turn into a problem and you have another vacancy next year. I'm not sure how much more you are thinking you could get but if you charged another $50/month it would take you 16.5 months just to make up the one month vacancy, who knows how many more for the needed repairs. I'd say stick with a good thing. If you think it's way low then raise it a little each year.

There's no waiting period, it's all about your debt to income ratio. You could buy another house every day for a week straight if you had the down payments and your debt to income ratio allowed for it.

If coming up with the downpayment is a problem you may want to consider waiting a year from your initial purchase and then buying as an owner occupier again to take advantage of FHA. It is a pretty common investor strategy to move every year like that.

Listen to the last podcast, #70. The speaker is doing 10 deals a month with no money down. Subject too and other seller financed options are a good option for you.

With several foreclosures on your record it might be awhile before you will qualify for traditional lending. Do everyhing right and nothing wrong as far as your credit goes, make it a top priority.

Here's a vote for KC from another out of state investor in California. It is a pretty scary step to take investing out of state but I am very happy with the decision. I have a great contact there making it possible for me. If you plan on going out to visit you should talk with him.

I have made a lot of calls to banks in KC. It's easy to find cash out refinances but I have yet to find a lender who will do it in less than 12 months. Loans of less than 50k also weeds out a lot of lenders.

You have landed in one of the better buy and hold markets in the country. If you want to grow your portfolio quickly then you need to get comfortable with debt. Right now interest rates are low and you should take advantage of them. Definitely listen to the podcasts on BP and go to some local real estate investing meetings.

The home you just bought is to rent or to live in?

@joebutcher

That is very impressive that you marketed for and got your first deal off market. Looks great, congrats. 1.5% rent to purchase ratio with Texas appreciation, awesome.

"I rolled just about all the associated costs into the loan" How did you do this? Every lender I have talked with wants a 12 month seasoning period to do a loan to value refinance.