All Forum Posts by: Luther Wilson III

Hey, @Shane Willis, it really kinda depends. Whatever your goals are, how much capital you have access to, how confident that you’ll be able to find another sweet deal like this soon again and so on.

If you have a good chance of refinancing and getting back out a sizeable amount (possibly a large % of what you might actually net on a fix & flip anyway) then why wouldn't you want to BRRR it and hold it?

Something else to consider - if you don’t want to hold the property as a regular rental - how about doing a lease option or an owner finance deal on the back end?  You can very well get a large amount up front, your overall return will be higher, and it’ll be a huckuva lot easier to manage! 

Going this route might get you as much as you would - if not more - than just a regular flip! The owner finance deals that our group has been putting together lately has been better than ever.  😀

Let's say you only use $70k and you keep the rest for reserves & such. Since you favor small multifamily properties and you have family members in certain states where you could potentially invest, your first move may be to start reviewing deals in those areas. Once you have a market pinpointed or while you're in the process of finding it - you're gonna want to dig into the financing portion to see how that could turn out. There's plenty of lenders out there who will fund a large portion of the whole project (purchase AND renovation). You might only have to come out of pocket 10-20% of the total project cost. It's likely gonna be private money or hard money. That's where leveraging that $70k would come into the mix. (Keep in mind, if you find the right type of deal - there are lenders that'll fund the whole thing!). Once you find the right deal you can BRRR that sucker out!

It’s sounds really simple, and in concept it is, however, executing on it effectively is a whole other story.  You’ll need access to a solid renovation crew and an exceptional property manager.  A lot of times there are realtors who are in your select market, who SPECIALIZE in and have EXPERIENCE doing and or helping other Investors do what you’re wanting to accomplish. They’re able to find and close off-market deals, they may be a investor or property manager themselves, and they may just have a virtual Rolodex of contractors & such. This is who you’ll want to find!

Let’s list out the steps to reiterate:

1. Pinpoint your market 

2. Get your financing in order 

3. Tap in with a seasoned operator (who specializes and is experienced in what you want to do).

4. Find a good off market deal 

5. Close that sucker and BRRR it out!
 (once you close you’ll have 12 months, maybe 24 months to do your value add, raise rents or whatever you plan on doing - and then you’ll need to refinance!  

Hope all this helps! 🙂

There’s a boatload of investors here in the Kansas City market making moves.  I’ve been hear working with OOS Investors since 2013.  The opportunities can still be pretty solid here - all things considered.  For whatever reasons, we get a ton of action from Investors in California, Colorado, and New York. Canada as well.

You can scoop up C & B class homes all day long around here. Buy & hold / BRRR seems to still be clicking a bit.

Kansas City stays lit!  LOL   What are you wanting to know?

Hello, @Ali Mirabzadeh, you might have to keep trying.  The top agents who are also investors, as you could imagine, are going to be rather busy.  You can try again with the same agents or you might have to expand your search a bit.  Like a lot of things, you may not have much luck early on.  Just like you're planning on vetting them, they'll be doing the same for potential clients.  

Cheers, @Ellen Womack, you're officially a real estate investor! Isn't it fun!? No, really, though... This stuff comes up all the time. I appreciate you having the courage to put yourself out there and ask for help. That's how you'll learn faster and better. Your story kinda reminded me of the first house that I bought back in 2009. I guess it would've been considered a house hack too - just on a SFH. While I lived there the place got broken into, I had some wild parties and I had a gf and a few different roommates in & out, all in just a 18months or so! LOL

It seems as though your options are rather limited at this point.  Here's a few logical solutions that might work out for you and your husband:

1.  You could simply resale the property outright (hopefully for some type of profit), chalk up your experience, and move on as a more experience & knowledgeable investor.

2.  You can try to find someone to loan you the money for the necessary repairs.  They may want an ownership share of sorts, or maybe they'd potentially be ok in a 2nd lien position note on the property or you might consider getting the lender to do some type of creative loan that has no monthly payments for a payoff at a later date.  You can get creative here if you want but maybe not too carried away. 

2a.  If you do go with option two you may want to consider hiring a property manager afterwards!

3.  You very well could resale the property on a note (seller financing).  This way you can still get cash flow from the property without necessarily having to do the maintenance or upkeep. You'd have to look deeper into the #'s to see if they even make sense or if a deal could be structured that's attractive to a potential end-buyer.  If you go this route you wouldn't need to hire or do any property management.  Let's say you could get $10,000 down and X amount each month?  Then you'd have to figure out your next move!

Any way you slice it you're going to have to go through some uncomfortable **** to get through your situation.  It's all good, though.  It's good to keep things shaken up sometimes. It means you're learning and growing - try to enjoy the excitement.  You'll probably look back on this years from now and laugh.  :)

Hey, @Paul Lim, there’s a number of things to consider when structuring owner finance deals. Price, down payment, interest rate, term, is there a ballon and who gets the deed are some of the main things.  How about a moratorium?  Those are great if you plan on doing renovations & such.  The price may not be that important if the cash flow is good and perhaps if you structured a deal with no ballon. If a balloon is required then sure, being in a solid equity position is gonna be important. If you know that you’ll need to refi or resale in let’s say 3yrs or 5yrs then 85% might work out just fine - that is, if home appreciation continues or if you’ll have the Capital in reserve to cover the difference on a refi or quick resale - maybe worse case scenario. We don’t know exactly what the market will be like then so it’s a bit of a roll of the dice but worth it if you can get a solid deal worked out!
You might consider giving the seller a couple different options or scenarios…  If they want a balloon then you could offer less of a down payment and a lower interest rate.  If they’ll carry the note for the full length of the term, without a balloon, then I believe that warrants a larger down payment and maybe a higher interest rate.  At the end of the day it’s whatever you can work out and negotiate with the seller!  Figure out what’s their motivations for wanting to seller finance.  If they know about the tax benefits and how they can transfer the note, resale it (as a partial or a whole), or even pass it down to their heirs, then that might help you get a deal done.  Good luck to ya! 

The Kansas City market usually stays lit up with investors! I’m born and raised here and my biased opinion is that it’s an amazing place to live AND invest.  😉

Asked around a bit… Check out some of the opportunities.  We’re BRRRing out here pretty well still.  That’s mostly single family and some multifamily.  If you like B-Class single family homes as buy & holds, you can clean up all day.  In general, one can buy SFHs around here for under $200k and rehab for under $80k over and over again.  

Right on, @Stefan Hirniak

You’d certainly want to try and get the deed as part of the deal.  The due on sale clause is something that’ll rarely come up.  As long as you AND the seller make your respective payments each month and remain consistent with things you’ll be fine.  It’s certainly important to do your due diligence on the deal…  A clean title, a current mortgage, and a good note are just a few things you’ll want to confirm with the seller. I believe he’d need to disclose that there’s a mortgage balance as part of the purchase agreement agreement anyway.  I think to be compliant with TRID and or RESPA maybe? Either way you’ll want to dig into all that a bit.  How would you confirm that his mortgage is being paid each month?   And how would the taxes and insurance be handled each month/year? Just some things to consider and coordinate on if you do move forward with the deal…   Creative finance deals (in my opinion) can be some of the most lucrative but they absolutely have to be handled a certain way.  I think being a good person and practicing with integrity becomes especially important on these types of deals. Good working relationships and communication are key as there’s a lot of trust that is needed to get through the whole process.   🙂

Cheers, @Mac Nielsen

The answer your question:  it depends 

There’s the market location, the investment strategy, your risk tolerance and how much capital you have access to - just a few of many things to consider.

One thing I'd recommend is to get to a local REIA meeting. Networking and meeting other investors in your town might prove to be beneficial. What market are you in?

Whichever market you decide to invest in remotely - you're gonna need to leads. You can go word of mouth which is free but is gonna require a lot more time & energy or you could put together your own marketing campaign. Either way, once you get a good lead then you have some leverage… From there you can choose just how you want to exit. Whether it's wholesale, wholetail, fix & flip, BRRR or something creative - having that deal tee'd up and ready is crucial so that should be the focus - finding a deal.