All Forum Posts by: Kenneth Garrett

@Nikko Tountas

Private money is a great way to fund BRRRR deals. After my first BRRRR deal one of my investors funded my projects at 100% of purchase and rehab.

@Nikko Tountas

So there are typically two scenarios when working with private lenders.

There is an equity lender where the lender is part of the deal and receives a percentage return at the end. This is typically the scenario for flips.

There is a debt lender, where they are paid a percentage return. An example would be a 10% annual return until the property is sold or refinanced to pay the lender back with interest.

You also can do a combination of the two. The great thing is you can be as creative as you want.

@Monica Boyles

I used the Short Term Shop with Avery Carl.  I know where I wanted to buy, my price range and cash flow I was seeking.  She and Luke were very helpful.  

@Lior Noach

I agree with @Nicholas L. you need to analyze each potential investment and see if the math works. I've bought plenty of foreclosures, but there are are a number of them I walked away from because the numbers just didn't work. You need a decent spread from the buy number to the rehab number to the ARV number. The goal is to force the equity to get all of your money out. This in reality is not the typical outcome. I've had money stuck in, in almost every BRRRR. Thank goodness in most cases I was able to recoup all of funds within 6, 12, or 18 months. Those are still good deals.

@Dominick Johnson

I think your goals are always changing. It’s an evolutionary process. As your own life changes so does your goals. There is definitely one constant in life “It’s always changing”. See some examples: college for your children, marriage, divorce, Illness, great success at your W-2 job, unexpected move, the list can go on and on.

When your working a W-2, your time is limited and those of us who have done well are able to manage it at a high level. I’ve seen people who quit there W-2 and they thought I have all this time, I’m going to crush it. Then they are not as productive and financing without a W-2 requires creativity.

It’s definitely a fluid plan. I had always set a total income in retirement at $10,000 a month. Once again, it’s a goal. You should cover all of your expenses plus saving money for unexpected things . I think saving 20% above expenses makes sense. It’s all relative.

@Thomas O'Donnell

This comes up a lot on here. There are some scenarios where it might make sense as in retirement, but in your case you should keep that money for future possible investments. Just remember when you buy your next investment your DTI will impact your capability to borrow (mortgage) again using residential mortgages. Your DTI is not going to change based on you paying down the principle. I agree with @Kevin Sobilo and @Joe Villeneuve keep your cash for yourself.  

@Montez B.

First off you need to buy properties at a discount. Can get you find these on the MLS, yes you can, but they are hard to find. Off market properties are harder to find, but they potentially have the biggest upside. Anytime you are looking at buying an investment property you need to know the values in that area. As others have said it's all about comps. If you don't have a real estate agent you can use Zillow, Redfin, Realtor.com, etc and look at solds. Compare like houses for like houses. Same neighborhood, same style of house, same bed/bath, similar square footage, etc. I hope you can see the pattern.

Example if a property is totally outdated and I can buy it at a discount, I have to run comps. If a property is on the market for $150,000 and is in need of work. I look at comps of updated properties. If updated ones sell for $200,000 that’s a $50,000 difference. You need to calculate the cost of updating it, marketing it, closing costs, holding costs, etc. If there is enough spread then it’s worth it. Don’t forget profit. $50,000 might not be enough after you do the math. If you can buy a 2 bedroom and it has enough square footage to make a 3rd bedroom that is going to be your biggest return.

@Andrew Diamond

I’m not a fan buying things site unseen. At least drive by and see what it looks like. You can’t assume the condition, you need to get some idea. Peek in windows. Although technically that is trespassing without permission. If it needs a roof, siding, etc your probably already in for 20K without seeing the inside. Definitely helps if you have expert knowledge in that neighborhood, that way you have a good of at least typical rehab costs.

I have had good luck by buying foreclosures directly from small local banks. When they foreclose many times they just sit on them until there ready to move the asset. In this case, I have always been able to walk the property. The great thing is there is no competition. It's great for BRRRR or flip projects.