All Forum Posts by: Kyle Johnston

Maybe that was worded poorly, Texas does have stricter state laws when it comes to cash out, for example you can't do an FHA cash out loan in Texas, but I didn't mean it would be difficult. You'll just need the right program to match what you want to accomplish.

Hi Jesse,

Welcome to BP! Texas is a tricky state to do cash out in, but we have a program for it. I'd like to talk more about your goals so send me a PM.

If you wanted to create one yourself, you would want to include thing like property value; expected appreciation based on area trends; expected rent with comps to back it up; estimates of expenses such as trash, snow removal/lawn car, and utilities (actual quotes from companies in the area would make this section even better); estimates of annual taxes and insurance; and basically anything else you can think of that would affect the investors cash flow/investment growth as well as anything that might just be helpful like a list of property managers/rental agents/handymen in the area. Most investors will want to verify many of these themselves anyway, but when your numbers come back to match what they find, it will help you build a good reputation and may make them want to work with you again in the future. 

Most of these calculations are already listed in the rental property calculator tool here, and it turns it into a really well put together presentation for you, all you'd have to do is include the supporting docs. So I think it and the other tools you get are well worth the cost of the pro membership, but this should be most of what you'll want to include if you build it yourself.

Hi @Christian Sifuentes, I'm more towards a traditional lender, I'm a loan officer with Carrington Mortgage Services. The reason I don't say entirely traditional though is because we service a large portion of our own loans, which allows us to offer programs with fewer strict guidelines like a cash out program for investment properties I've mentioned in other posts. I'm actually living in Owings Mills now and working in Towson, but I know Carroll County very well since I grew up there. Where's your duplex located? I've been looking into getting started flipping as soon as I have a little capital built up so I'd definitely like to talk more about that too!

Hi Paul,

Welcome to BP! I'm relatively new and have a very similar strategy in mind as you do, flip homes for capital and experience, and eventually build a rental portfolio. I haven't done any deals yet, but I've done a lot of research and thinking about what would make a good rental, so hopefully I can help at least a little bit. The main problem with trying to flip to an investor, is that they will still need a discount from market value to make it a good deal for them. 

A good rental property investor is most likely more concerned with cash flow than appreciation, so I did some (very rough) calculations using the rental property calculator on here based on what you provided. If you buy at 60k with a couple thousand dollars in closing costs, put 10k in (just a hypothetical guess without knowing anything about the property, but it would have to be VERY light repairs to be much below this from what I've seen) You're in it for about 72-74k before your carrying costs. At a purchase price of 80k, renting for 1250 a month and including some pretty standard assumptions as far as expenses, this property would make the end investor monthly cash flow of about $140. That's not a bad deal depending on who you talk to, but I wouldn't call it a home run. Although, that only nets you 6-8k minus your carrying costs which in my opinion would be a pretty slim margin for error. It turns into not such a great deal for the investor even raising the purchase price by 5000.

Again, I don't know any specific numbers about the area or your deal, but based on what you said you're trying to do, this is at least how you need to think about it. Hope this helps and I sent you a connection request so I'd be happy to talk more since we're in pretty similar situations!

Hi Christian,

First, welcome to BP! You've come to the right place, everyone is extremely helpful. Next, I heard it many times (and seen it happen live in the marketplace here) that if you find the right deal, you'll never have to worry about finding buyers. It's really true, I've seen wholesale deals posted on here and sold within seconds not even minutes. So as far as your strategy, I'd spend more time on finding a really good deal and that's the best way to get started in my opinion.

That being said, I'm looking to do my first deal as well within the next few months as well, so I'd be glad to be added to your list and if something you find fits what I'm looking for, maybe I'll be your first buyer :) 

Hope this helps and good luck!

Congrats! This seems like a great deal! I can follow your logic as far as comparing it to the stock investment and it makes sense to me. In my opinion if it truly won't cashflow, that wouldn't be something I personally would look to hold for the long term, but that's just me, I'm sure some people would feel that the appreciation would make up for it. Assuming you can't get the variance and we're only talking about options B or C, I'd say B is the obvious choice. If you can put in $200k and sell for $1.2-1.4 million within a year (depending on your rehab timeline) that seems like a great profit to me...$270k in for a $325K profit (not including carrying costs and sales expenses on both ends for simplicity) is about 120% COC ROI even if it takes the whole year to resell. Assuming you have the capital, that looks much better than the 7% stock return. One thing I would say is to make sure you do account of ALL expenses if you choose to go this route. The people I've heard get burned on flips do it in 3 ways for the most part: Pay to much up front, which it doesn't like you are; Go over budget on the rehab; Or forget to, or don't account for enough carrying costs in case you get stuck holding it longer than you expect. As far as that $200k being able to buy several other properties instead, you're not wrong, but that decision comes down to your goals and strategy, I know there are people who specialize in high end flips just like this one, but in the end it's up to you.

Hope this helps and thanks for sharing your deal! I'm a numbers guy as well (also traded options while I was in college) and love working through all the numbers even when it's not my deal.

@Jojo Olaseha works in Baltimore City and County, I haven't done a deal with her yet because I haven't been ready to buy, but she's been very helpful and pleasant to talk to so far. She also works with investors and retail customers.

I believe @Ned Carey had a great post about property managers in the area (some who are also contractors). I can't find it right now but definitely the best thing I've read on the subject. Maybe if he sees this he can link it for you!

Hi Vinod,

I might be able to help with this as well if you're still looking. We can do up to 80% LTV on a 30 year fixed rate cash out with the right credit scores. Let me know if you'd like more information!

[email protected]