All Forum Posts by: Kyle Lewis

This is showing that you put $0 as down payment for your loan. Are you sure that's correct?

I'd also be a little concerned about $550 in rent. While it may pencil out on paper when calculating Repair and CapEx expenses as a percentage of rent, rents that low typically make it difficult to cover CapEx costs over time - like a new roof every x years, new windows every x years, etc. I don't like using a percentage of rent to estimate these (ex - CapEx = 8% of rents / $44/mo) because a new toilet in a $30,000 home getting $550 rent in Michigan costs roughly the same amount as a new toilet in a $1,000,000 home getting $5,000 rent in San Francisco.

Hope this helps. Best of luck!

@Kyle Houlahan - I've always been advised by CPAs to create a multi-member LLC for these types of partnerships. This way each member's income/loss will pass through to their personal taxes. I'm not an expert and would definitely recommend speaking with a CPA or tax attorney to ensure this is the best fit for your situation.

In my experience, commercial lenders will be looking at your personal finances, but more importantly, they'll be evaluating the deal itself (DSCR, historical vacancy, appraisal, etc.) and investor experience. Check out the below link. This could be a good loan product for what it sounds like you're looking for:

https://www.fanniemae.com/content/fact_sheet/smallloans.pdf

Not sure how to answer you last question. There are a number of other factors that may need to be considered depending on the deal. Finding a good property management company is an important piece of the puzzle.

Hope this helps. Best of luck in your search!

I have a 6 camera system for a 12-unit building. It runs off of the common area electricity meter. We keep the equipment in the laundry room and need to pay for internet. For your situation, maybe you could look into consumer grade battery operated cameras?

Thanks for your service. I'd recommend continuing to learn, paying off high interest credit cards as soon as possible, keeping your car loan is okay IMO assuming a competitive interest rate, and looking into house hacking or BRRRR when you have 6 months emergency fund savings. If you put everything you have into a flip and it goes south while you still have 60k in debt, that could set you back significantly. As a result of your first experience in RE, you may never want to invest in RE again. Based on my goals of long term passive income, I believe real estate investing is a get rich slow scheme so I try to approach RE investing with a longer time horizon - something like 10 years. What can you do today that will maximize your net worth 10 years from today? Hope this helps!

Yes, I think it's a good idea. Check with local laws to confirm nothing you're doing is illegal. If your goal is experience, maybe you don't end up executing leases and being the property manager of record, but you can provide value in other ways that still get you involved in real estate world. Sometimes owners like having a nearby contact to assist them in miscellaneous ways and sometimes they want someone other than the property manager. You could even keep an eye on the property and if you see anything suspect you can take a picture and notify the owner. I don't think it's wrong to bother the property owner. Property owners receive calls, emails, mail, etc for services all the time.

@Dieggo Goncalves - My example was assuming the property was an SFR, which would mean the loan would be based on personal income, debt-to-income ratio, etc.

If the property is commercial, such as a 10-unit building, you can execute the same strategy with a commercial loan at the end of the process, which would be based more on property performance, DSCR, investor experience, etc.

I would try to BRRRR a property.

~45k purchase

~15k rehab

~80k ARV

Refinance, pull out ~60,000 and do it all over again, and again, and again.

I like those areas with Zeman being a bit better of the two.

I'd recommend Wells Fargo. If interested, feel free to message me and I can send you an intro to my Wells Fargo contact that has closed on a >75k property in Cleveland. I believe they have a 6-month seasoning requirement, but if you bought it longer than 6 months ago, you should be all good! Good luck!

Awesome! Congrats on your success!