All Forum Posts by: Louisa Davis

 Yes, my first ever LTR is in the portfolio that I personally rehabbed myself.  But honestly I am over the personal attachment now that I am older and wiser.  I rather sleep comfortable at night than worry about the next 7k payment / vacancy.  I definitely am smarter now and have way better knowledge.  And yes, you are correct.  These properties will pretty much rent at the same price for the next 5-10 years unless I updated a few of the bathrooms and AC units.  I might break even but I think it is smart to sell 3-4 of them and move on.  The last 2-3 I have acquired in my portfolio are my best cash flowing properties because I have learned over the years how to calculate a deal better than I did when I started with these.

Hello, I am looking for a private lender that is willing to take on long term loans. I am covered as far as my fix and flips/construction right now but they aren't willing to take on longer term loans currently. If you have an appetite for 30 year type loans and willing to accept rates at 7% currently. Please reach out. I would also be willing to have a contract that would pay pre-payment penalties for 10 percent for years 1-5 and then 5 percent for years 6-10. I am a broker but would prefer to pay a person rather than a corporation on my personal investing. 

Hello BiggerPockets community,

I'm relatively new to real estate investing and would like to seek some advice regarding a property I recently found. The house is listed for just under $600K, but it has significant damage due to broken pipes. The owner attempted to fix the issue but tore up the drywall and couldn't locate the source of the leak. The property is being sold "as-is" and for cash only.

I'm a bit unclear about what "cash only" means. Does it imply that I can't finance this purchase through a bank? What options do I have?

The property has an amazing view, and most houses in the area start at $800K and up. This purchase would involve a full rebuild down to the studs. While I have solid income and good credit, I'm uncertain if I'm too new to take advantage of this opportunity.

I'd greatly appreciate advice from experienced investors on how to approach this. What should be my next steps, and what factors should I consider before moving forward?

Thank you in advance for your insights!

Best regards,

Robert

Hi BP. I am an full time employee and hold a real estate license on the side. I have one sfr that I'm holding with plenty of equity but it is under long term lease agreement and I don't want to leverage HELOC as I intend to cash out when the lease is up.

I have an old 401(k) that I want to convert to a self employed solo 401k so I can direct the funds in to real estate investments while leveraging debt and evading the UBTI expense that comes with a self directed IRA when leveraging debt.

Can I use Solo 401(k) as source of funds to pay 25% down and leverage debt for remaining principal amount to purchase a duplex that I will owner occupy and rent the other unit? How do I pay the returns back to the 401(k)? Can my LLC hold the deed? Does the 401k hold the deed?

Thank you for your expertise or guidance to find this knowledge.

Shawn C

I currently have 3 SFH rentals solely owned (1 in San Francisco Bay Area and 2 in Indianapolis metro area) and 1 apartment building in the Bay Area with co-investors). I have a lot of equity in the Bay Area house and the apartment building. SFH is currently negative cash flow because I'm renting out to family members, trying to get roommates in to bring it up to market rent. The apartment building cash flows the most out of all the properties.

Indy SFH#1 in Class A nice suburb with great schools has appreciated in 10 years (doubled in value) that I've owned it. However my cash flow has decreased from $400 a month (in 2019) to now $110 a month in January 2023 due to property tax increases. It's really $66 if you divide the annual HOA fee into monthly amounts. House was built in 2005 so haven't had too many expenses recently (replaced water heater 2017 and HVAC 2018), but it will need a new roof in a few years, I would guess.

Indy SFH#2 is a renovated home (built in 1920) bought 7 months ago in a Class C moving up to B area. It's supposed to cash flow $176 but I have only received 1 full month rent (minus the property management fee) due to repairs that tenant has called the PM company for. I'm in escrow on Indy SFH#3 - projected cash flow is negative - $100 or so with these interest rates. Hopefully I can raise the rent over the next few years.

Since these cash flow amounts are small, they would be wiped out by a major capital expense for the year. I have reserves but I feel like I have too much in real estate and should take a break and invest in more liquid forms (stocks and index funds). My net worth in RE is well over 50% (don't want to go into specific numbers on a public forum). I've heard different investors have net worth range from 20% to 98% in RE.  My goal is to leave stressful W2 job within 5 years or scale down to working on part-time/contract basis. I feel like I'm starting to over leverage or take on too much risk. Is that part of the definition of over leverage, with rents barely covering my monthly expenses? 

Also there's the headache factor with investing out of state especially older homes. My thoughts were to in the near future possibly sell the Indiana properties because of the ever increasing property taxes, 2.77% and 2.78% tax rate and 1031 to a SFH in a less expensive part of Northern California (90 min drive). Nevada or Arizona have much lower property taxes and better appreciation but I would be cash flow negative with those also (as long term rentals) and again it's out of state. Or just sell them and take the capital gains hit but then I lose the rental income and tax write offs.

 Am I missing something but how am I going to leave my W2 job or go part-time if I'm barely cash flowing especially on these Indiana properties? Even if I bought 10 more Indy properties all my net rental income won't add up to my W2 income (after taxes). I do my own taxes so I can see my taxable income reduced every time I add a property into the tax return form. They're passive losses but I'm tracking my hours to see if I qualify for Real Estate Professional Status. This RE investing combined with a W2 job is stressing me out. Thoughts?

Sorry for the essay but I'm frustrated. 

I would only do it if you were okay holding on to the asset for the long term. $30k can turn into $8k or 0 really fast - whether that is due to unexpected costs - especially on an 1875 vintage home - or your ARV estimate being off. I'd be okay taking a swing for a $30k profit if it's a good buy and hold property. Otherwise, I'd pass.

Hi BP, 

Based in CA and gearing up for my first BRRRR (remotely). I'm in the process of choosing a market to focus on and wanted input on strong BRRRR markets right now. Looking for your suggestions.

I'm aiming for the best shot at getting as much money out of the deal so I can do several more. Specifically, eyeing entry-level markets with all in purchase + rehab between $80k to $170k.

What markets do you think I could maximize the likelihood of recouping most, if not all, of my cash? I’m in discussions with teams in Memphis and Detroit, but I'm still open to exploring other markets before making a final decision.

Thanks in advance for any suggestion and input.

So I'm curious to know which way is better.

So let's say I have $100k cash and I can either put 30% down on $100k duplexes, or buy 1 in cash and then BRRRR. Which is better? Numbers show that if I bought 3 houses and after NOI and Debt service I have around $430 per house so around $1290 a month.

If I were to buy a house in cash, do whatever renovations needed and then cash out refinance to do the same thing with the next house and so forth...

The second option I can keep going whereas the first option I don't have any other cash to buy the 4th property... am I correct?