All Forum Posts by: Kyle Wells

I am trying to choose between investing in two Syndication Opportunities in Kansas City as a Limited Partner and am seeking local BP input as to which neighborhood is may be better.

One of the Syndication Offerings involves a B class townhouse style community in the College Blvd and Hauser Street area of Lenexa with reported good access to Hwy 435 and Hwy 35....The other is a B class garden style apartment community along S. Jackson Drive in the Hwy 70 and Hwy 470 area of Independence.

Thanks in advance for any insight offered about the pros and cons of these areas or which neighborhood would be preferred over the other.

Trying to decide what my best move is and would love BPs opinions. I am about to sell my first rental property and I should walk away with about 125k ish after all taxes and fees.

I own my primary residence that I bought just over a year ago with an FHA loan. Wondering if I should take the profits from the sale and pay down my current mortgage to the 20% mark and refi it. I will eliminate PMI (just under 400/month) and take advantage of the lower interest rates (which feds are rumored to lower again in the near future). This could decrease my monthly payment by about 7-800 dollars/month with about 60-70k invested. Still leaving me a decent chunk of change to grab one or two more properties.

Or do I take that 125k and buy four or five properties in the 100k range?

Thanks for any input. It’s appreciated.

Hi Paul, I didn't consider using the rental income in my DTI because the property is still going through closing. I was under the impression that most lenders would not consider the income until it has been stable for at least one year.

@Kyle Wells

Sweet deal! How come you’re putting so much down? Just. Utopia. My experience has been that if you have money in the deal you shouldn’t need 20% with a hard money lender. It’s nice to have some of that $20k sitting in your bank account for the overages or to ensure your payments can stay on track when you are getting draws.

Just a random question, seems like a great deal.

Also make sure to walk through the house and get a detailed scope with your realtor and not just your contractor. Sometimes going through that process with only 1 contractor can be tough for your expectations later. You may have already done that, but do t only rely on a contractor telling you what you should do. And if it’s rental, no need to over rehab.

Happy deal making! Put in that offer :)

Looks like a no-brainer to me. Congrats! Curious how you sourced this deal, I’m looking to do similar. 

@Kyle Wells The numbers on this look good overall. My first question would be is this a SFH or MF? The reason for the question is what is cost per door. We try to get a minimum of $100 per door leaving no money in the deal and if this is a duplex or a SFH, the numbers look good.

The biggest points of failure when doing a BRRRR occur on the ARV and Rehab costs. If you are really solid in those numbers, the only other item to keep in mind is the re-finance generally cannot happen until 6 months after purchase. There are some lenders who can avoid the seasoning requirements, though make sure you find this out from your re-financing lender.

I am also an investor in the KC area, so feel free to reach out if you need any contacts for hard money lenders or re-financing lenders. Good luck!

I’m looking at a property in my neighborhood that is turnkey and just dropped down to $115k. I don’t have cash for a 20% down payment, but I was considering doing a cash out refi on my first home (which is already a rental property.) I don’t know much about cash-out refi’s, so let me explain what I think I want to to do, and you all can tell me how misguided I am! Haha

I owe $80k out of the original purchase price of $92k on my first house, but I think I could easily refi for $110k-$120k. The result would hopefully give me enough cash in hand to put 20% on the new property and cover closing costs. Would this be a good way to acquire my 2nd rental?

I appreciate any feedback!

@Tyler Weaver Luckily I’ve built a great relationship with my loan officer and I’m confident that her bank will continue to finance many more of my properties. Still, I will look into portfolio loans and other creative strategies for when it’s time to move on.

I understand the BRRR process; however, I'm not too good at assessing rehab costs. I'll need to do my hw. What sort of problems in a house do you consider deal breakers?

Thanks for the advice!

@Rob Massopust, I have been a long distance landlord for a decade now.  Many YEARS I never even visited the property.  I had a tenant that stayed 9 years.  Never a problem other than maintenance.  It's actually pretty easy if you set up the right systems and have choose a decent tenant.

Last spring they moved out.  I had made a decision to sell.  Or so I thought.  The property needed serious updating.  I spent about 90k, going thru the whole house.  By the time I was done, NOTHING was more than 5 years old.  The property was 'bulletproofed'.

I sent a small crew from AZ because I found CA contractors to be both expensive and unreliable.  I can't even tell you how many times I was 'ghosted' by contractors.

Anyway, as the property took 'shape', my attitude changed.  It was no longer a millstone, but a gem.  And a goldmine.

After I was done I raised the rent by $1000 a month.  My neighbors thought I was crazy.  But I had a couple of open houses and got at least 15 applications and choose 1 of the 15.

@Keith Gilbert, I know that a vast number of ppl on this forum are telling you to sell, that the roi is too low, etc.  

The real deal is that CA is a 'slow roll' that ALWAYS appreciates over the long term.  Over AZ, Midwest 'cashflow' plays (most of which are scams, IMHO), mountain cabins, the latest and hottest places or anything else.  The only other place you can compare to is NYC.  And they ain't building more land in Manhattan either!  ;-)

You can increase your income line 3-5% annually while all other expenses stay pretty constant. Which also doesn't happen anywhere else. Even in AZ. That 2% ROI of today can increase rather quickly under those circumstances. My parents purchased the property I now own in 1975. They paid $47k. Show me that ANYWHERE else.

Today I am in the 'never sell' camp.

I KNOW I would have been 'sorry' today if I sold a year ago as I had originally planned.