All Forum Posts by: Kenneth Garrett

Quote from @Leslie Anne Morris

Check with Movement Mortgage.  Your credit has to be absolutely stellar.

 I agree with Leslie, I used Movement Mortgage earlier this year.

Quote from @Benjamin Foullon:

Hi everyone! 

I'm looking to invest in an STR in Florida. I have 10% down payment set aside. Most of the loans I've looked at require 20-30% down for STRs. Does anyone know if there are lenders out there willing to handle LTV 90% on an STR? Thank you!

You can do a second home/vacation property at 10% down.  I did this a couple of years ago.  Not sure in todays market if that has changed.  As far as furnishing the unit, it depends.  Most properties that are already a STR are already furnished.  In my case, I bought an unfurnished one.  I furnished in 3 weeks to make sure I hit the spring break crowd.  I bought a beach house.

Quote from @Blake Ramsey:

@Kenneth Garrett Thanks for taking the time to give some insight Kenneth. My main goal for this question was to get an answer on how much equity I had in the deal after the refi but @Nate Sanow helped me out with that. I understand that I left out some costs that would be included in an actual deal but for my question they weren’t really necessary to include.

When you say you cashout 80-90% and have all your money back in 12-18 months, do you mean you recoup the rest of the 10-20% left in the deal by the cashflow of the property? After this point your cocr would be unlimited correct?

That is correct. Cash flow makes up the difference from the less than the 100% cash out. It's still great to BRRRR. Where else can you invest and your total cash outlay is returned. Your cash on cash becomes infinite.

Quote from @Jaron Walling:

Quote from @Nicholas Jackson:

Quote from @Kenneth Garrett:

@Nicholas Jackson

Just a word of caution. If the bedroom windows are boarded up that’s a building code violation when it’s occupied. I would try to fix the bedroom windows enough to get them to function so you don’t run into any problems. One other solution would be to buy cheap replacement windows for the bedrooms until your custom ones arrive.

Best of Luck.

Luckily the current bedroom windows work fine. Do you know if its a violation for boarding up kitchen windows? 

 If the kitchen has two points of egress you should be fine. Living room, basement, one functioning window, or combination, etc. 

Rant; 4 month wait time?! Windows are one of the biggest expenses ever and the variation of prices we received in the past is mind blowing. Probably my least favorite remodeling project. Unless you're doing the whole house I'd shop around and see if a local guy can replace the broken ones. Ohh looks like you paid something already. Hopefully the windows come in faster than 4 months. 

The building code requires one exit from each house (multifamily is two).  Many jurisdictions have amended that to two exits.  So it depends on your jurisdiction.  Emergency Egress windows are required for each bedroom.  The egress is separate from emergency windows.  The code also addresses light and ventilation.  You don’t need to be worry about light, because you have artificial light.  Ventilation is a different calculation.  If we use common sense (which is always dangerous) closing off a kitchen window should not be a big deal under the premise your working towards compliance.

@Jay Charles

This probably depends on what’s left to get done. Almost every project has a surprise or two that you didn’t budget for. That’s where the contingency fund comes in to cover unexpected issues. Sometimes your 10%-20% fund is not enough. Definitely sweat equity is always an option.

Provided there is enough equity in the deal you could look for private lending. The only issue where will the private lenders lien position be. I have been able to have private lenders in second position, but it takes a great relationship for them to be comfortable or use another property as security.

@Nicholas Jackson

Just a word of caution. If the bedroom windows are boarded up that’s a building code violation when it’s occupied. I would try to fix the bedroom windows enough to get them to function so you don’t run into any problems. One other solution would be to buy cheap replacement windows for the bedrooms until your custom ones arrive.

Best of Luck.

@Blake Ramsey

Your numbers in theory are correct. I’m not sure I understood some of the costs. If you bought at 100K with 20K down that is the original purchase. There is the cost of the original loan plus Interest, taxes, insurance while you are essentially holding it. Those are costs to you. Then you have refinance with those costs. Don’t forget you have income once you secure a tenant so that goes to the plus while you are going through the refinance process.

It’s really difficult to recoup 100% of your money at the refinance stage. I generally am able to recoup 80%-90% and I have all my money back in 12-18 months. If you look at cash on cash that’s potentially 100% the first year or 67% the first year and 100% within the first 6 months of year two.

Good Luck.

@Neel Patel

I think your wording is fine. People read what they want to hear. Just like listening you hear the parts you like and disregard the parts you don’t.

In the future, don’t offer a discount. The more wordy a document is the more susceptible confusion will take place. Always be super direct and try to avoid options.

As with all landlords, it is an ever evolving learning process even for property managers. I don’t think being a pm is that difficult. There are times when things become difficult. When those things arise, I call my attorney for the bizarre situation. He doesn’t charge for a quick question and answer.

I like to self manage as well.

@Dustin Taylor

That varies quite a bit from market to market. If I update the kitchen (new cabinets, counters, flooring, sink , etc that is probably 15K-20K if you put some sweat equity in you can probably get it down to $10K-12K.

Bath room everything new, but tub. I generally refinish the tubs as long as there in decent shape. Looks like new when it’s done. 4K-5K. Some sweat equity maybe down to 2500.

All new flooring throughout. I don’t use carpeting. Probably 5K.

Painting 2500.

All this varies by material and type of updates. I like to do my BRRRR's flip ready. It cost a little more, but I can get higher rents and they rent in a few days.

@Nadeem Najam

Typically in the Midwest, this time of year it takes longer to find a tenant. I used Zillow exclusively and found it worked the best. I found at least in my area the MLS was the least effective. Most landlords used other sites and didn't use a broker. That may be market specific.

This time of year it might take 3 weeks or longer. It depends on your unit/house your marketing. You definitely want to stand out from the crowd with better amenities or updated finishes and maybe lower the price to get ahead of the competition. $50-$100 a month can make a big difference. If your property sits unrented for 30 days the reduced $50-$100 a month still puts you ahead at the end of the day depending on your price point. My price for my SFR was $1500 a month or higher.

I used open houses for my rentals and it worked great.