All Forum Posts by: Lance Castillo
Lance Castillo has started 5 posts and replied 18 times.
Post: Whats your mindful thinking of what keeps you motivated?

- Posts 19
- Votes 11
Usually, when I'm down in the dumps about some real estate related topic, I like to take a step back for a second and really concentrate on the numbers. For instance, currently, I am trying to close on a 4-bed house. After getting it under contract, my realtor sent me some more photos of the place and it was a real fixer-upper. This sent me for an emotional loop since it looks like there may be some work that was unaccounted for in my initial analysis. I am currently in the process of having the house inspected by both an inspector and my contractor. I've decided that there is not much I can really do about it until I hear from them how the numbers from my initial analysis will change. At that point, I have a couple of options:
1. If the inspection report comes back with something really atrocious, I can ask for a credit off of the purchase price.
2. If my contractor comes back with a higher estimate of work that I planned, then I can plug that in to see if my ROI is still good if I had to cover that out of pocket.
If any of the above two options still don't work for my criteria for a good deal, then I can simply walk away from the deal. If it was due to something big in the inspection report, then I should be able to get my earnest money back. If it wasn't, then I lost my earnest money deposit. It's not the end of the world. The numbers should always help you to keep your emotions out of it.
Post: Oklahoma City - Looking for Best Insurance Company

- Posts 19
- Votes 11
I was just wondering... What kind of monthly rates are you guys seeing for your buy and hold rentals?
Post: 4/2 SFH with extra room in attic. Too much house?

- Posts 19
- Votes 11
Hi BP,
I have a potential BRRRR deal with a 4/2 SFH with an extra finished room up in the attic. This will be my first deal. The numbers look good and after rehab, I'll have about $2.5k left in the deal with $175 cashflow and 84.5% cash on cash ROI. What I am having an issue determining is if buying a house this big will attract renters. I'm planning on marketing the place as a 5-bed to get better rent. My gut tells me that I should be looking for no more than a 3/2 for my first deal. What do you guys think?
Thanks Scott. I had an inkling that that was the case but I wasn't sure. I needed to get confirmation before moving forward with my first BRRRR.
I am going to give some hypothetical numbers to illustrate my question. Say I was able to buy a $100,000 property that needed about $20,000 in rehab to get to a good state for renting. Say I used a commercial loan to buy the property and finance the rehab. After getting renters in the property, it now appraises for $200,000 and I am able to refinance into a $150,000 conventional loan. Here are the numbers:
Say I paid $30,000 in closing costs for the initial commercial loan for the property which includes rehab costs.
Buy: $100,000 (for the purchase price of the property)
Rehab: $20,000
Rent: Say I am able to get about $1200 in rent per month.
Refinance: $150,000 (75% of the newly appraised value $200,000)
Repeat...
Ok so based on this example I was able to use the $150,000 I refinanced to pay off my initial commercial loan of $100,000 and the $30,000 I paid in closing costs. That leaves me with $20,000 in cash that I can use for future projects. Now for that refi of $150,000 would I have to give a down payment to open that? I know I will have the normal closing costs associated with processing this loan, but what about the standard 25% down payment associated with investment-based loans? Would I have to pay an additional $37,500 down to cover 25% of the new $150,000 loan I have? Thanks in advance!
Post: Rental: Cash Magnet #1

- Posts 19
- Votes 11
How much did renovations cost you and what is your ROI? Congrats!
Post: First out of state purchase

- Posts 19
- Votes 11
That's really awesome Nick. One last question. Did you find your contractor through your real estate agent or did you do some searching in the area yourself?
Post: First out of state purchase

- Posts 19
- Votes 11
Did you have to find a property manager, did the property already come with one, or are you planning on managing from afar with software?