All Forum Posts by: Kyle Kelley

@Justin Brewster

Awesome job! Colors look really nice, I totally agree with grey tones and the modern feel, flows really nicely with the stainless steel appliances as well!

Hi @Jewel Starling and welcome to the site.

Feel free to post some more details about the potential property and I'm sure you will get plenty of useful feedback and helpful tips from many BP users. Those familiar with the Cleveland area can help with specific neighborhood/location questions but other members can help analyze the numbers and let you know what they think too

@Brett Synicky  What prep program did you use in CA? Do you have any recommendations for prep classes / exam combinations? I've been looking for referrals or positive experiences from CA licensed professionals. Looking for online programs in particular, but if you took brick and mortar classes those would be appreciated as well. Thanks!

@Martin S. I am going through a similar situation right now. 

I cash out refi'd and got a HELOC on my primary residence (closed mid September) and near the end of those deals closing I placed an offer on an investment property that I planned to finance (closing mid October).

Did not disclose it on the initial application because it was not completed yet, and as we all know things can happen right up until the last minute before closing new loans, so I wasn' t going to say I had those loans when I really didn't.

Fast forward to today, Refi/HELOC closed, underwriters on investment property noticed HELOC lien in MERS so they asked for a letter of clarification regarding the lien and why did not initially disclose, I wrote a letter explaining what I just said and so far no issues (*knocks on wood*)

My situation had more time between them than yours do, giving the underwriters enough time to make sure it checks out without delaying the process. In your case though, I may consider letting the second underwriters know ahead of time just so you can get the appropriate pieces of information together (I would think as long as you have ample reserves to cover both properties and can show a solid future plan for rehab and rental income potential, you should have a better chance of it not being a problem)

@Bao Nguyen  I know it can seem like a lot of work at the beginning (and it is, because I'm going through it right now as well) but the more disciplined and committed you are to it, the more it will pay off sooner rather than later. 

Since you will (presumably) have better tendencies (research and commitment to making RE your passive income to financial independence) and resources (good PM, contractors, LLC, personal experiences from numerous properties) what you see as a full blown business now, will transition into that passive income state allowing you more time and freedom that you are looking for.

I too currently have a full time job and RE (buy and holds, with my first fix and flip soon to be going) has now become my second full time job, but I tell you what, I love it because I know that all of the late night reading here on BiggerPockets, looking over various real estate website sources to gather leads, and trying to find any and all ways possible to further this adventure, is going to lead to my financial independence and passive income one day. I do not expect to "get rich quick" as many of the guru's like to portray. I know it's going to take time, A LOT of time, but if I utilize the most of that extra time I spend now, I know it will pay off eventually. 

Also, once you get to a certain point you can begin passing out responsibilities to other people. Sure, some people like to manage 50 or 100 of their own properties and keep that extra bit of income in their pockets, and more power to them because that's great and its what they like to do. But, if in your case you would like to truly make it more passive, you can begin to give out responsibilities to others in order to lessen your load. Sure, it may cost you more money, not giving you the highest amount of return on your properties, but guess what, with that extra time you can go research and find even more properties for even more passive income!

Wanted to add that you also don't necessarily have to own the properties free and clear to have a passive income. @Joe Villeneuve has written some excellent posts on the power of leverage and as long as you know how to maintain and control your leverage, you could turn that money you would normally put towards getting a house free and clear, and turn it into multiple other properties. 

Sorry for the long winded response but just wanted to share my personal philosophy and approach to my ultimate goal of achieving financial independence and hopefully it can help you in one way or another!

Oh and to answer your original question, I would say I put in about 30 hours per week on average - after work and on weekends - and sometimes during lunch :)  and my goal is to be around 15K in pre tax cash flow by the end of this year, and only movin on up from there!

@Paul Hoeppner  Congratulations Paul!

 And don't put bay windows in rentals! 

Seriously though, very good input here re: insurance. I am currently pricing out different companies and policies for a couple of my properties and I will be damn sure to ask all of these questions about specific coverage areas before agreeing to anything and I will also definitely be reading every single word of whatever annoying piece of snail mail, email or brochure they want to send me. Better safe than sorry.

As a long distance investor, I prefer to purchase properties that already have tenants placed in them. 

I prefer it because I am cash flowing from the day I make the purchase and I don't have to waste time and energy on cleaning up the place, getting it rent ready, and placing a tenant. 

I make sure to ask the seller to verify and send over as much information as possible (current rent terms, payment history, recent updating done to the property, etc.) and if the numbers work and I feel comfortable enough with the tenants history, then I move forward. 

Is it fool proof? Absolutely not. There are going to be a couple bad tenants here and there no matter whether I was the one that placed them or someone else. 

Just have as much transparency with them as possible, let them know you are honoring their current rental agreement, and maybe if you want to propose an addendum for a specific rule you like to have with all your tenants, you can ask them nicely to sign it and make sure to clearly explain it. 

Also, even if I was a local investor I would still tend to look for properties that are already tenanted because as I said it allows me to hit the ground running from day one.

@Dan Gheesling  Do you have any recommendations on suburbs or neighborhoods to look at in Detroit area? Dearborn Heights is one I assume? 

When you say good deals, are you talking buy and hold properties requiring minimal rent preparation costs, or more fix and flip style deals?

I've got some properties in the Cleveland area and I tend to stay out of the city, but won't completely disregard it as there can be some jewels in the rough in the city(won't call them diamonds cause its not a lot of money, but any money is good money!)

@John-Paul D.  Welcome to the site!