All Forum Posts by: Mark Sewell

Houston is just so spread out so I think more SFR just kinda stands to reason.

Tia great post and great plan.  I like that you already have a pretty good idea what you want to do and where.  The rest you can plan around and mitigate.  Network with those KS investors!  

You don't need a mentor - just find some others that are doing the BRRRR strategy. Ask questions here and also try to get out to REI meetups when things open up again. There are (or were) several meets almost daily. Really I would say it depends on which side of the city you live in.

You can go to meetups, that is one good way.  Another good way is to do what you are doing now, and that is networking on BP.  Actually for me, I have found that many of the best people to network with, people at meetups, are the same people that I originally connected with first right here.  They introduce me to other investors that they know and it just grows.  And they all have contractors/tradesmen, realtors, accountants, attorneys and so on.  

Scenario C

Use a local hard money lender - partially. Look at it as a weighted average cost of capital approach. You have HELOC funds at 5% and the HM lender is offering you funds at 12%. You use $120k of HM funds and $80k of your own (this includes repairs), so you have a 60/40 split - anyway, you get it. You can play with the split based on your deal. Now you can get a better rate from them (less risk). Use your $140K HELOC funds for reserves, working capital and repairs - keep that powder dry as much as you can.

Really this is a version of your scenario B - HM lenders generally operate on six month terms.  You'll have your property done in 3 months easy.  Allow time to get a renter and then work on getting that refi.

The good ones will have temp-to-perms programs to move you into long term fixed rate loans when your renovation is done.

I know dozens of people that would trade to be your worthless cash position.  You need to leverage it.  

COVID is a speed bump that might slow us down some but it isn't an excuse.  There are sellers out there.  And banks are still lending (albeit they have tightened up a bit).

Honestly your finances are not the problem here - your negativity is holding you back.  I would challenge you to restate your post without using the word can't.  How can do what you need to do?  Because I suspect you can.

If talking to sellers is hard, then OK I agree.  It is really hard.  I am not good at it.  But I will get better.

Back to the story problem - you do have funds.  You have a great stack of reserves.  why no use Hard Money (local ones are your best bet) and do a low-end flip for now.  Try to stay around the median price level and keep it real.

For sure.  Talk to other investors in the area and get some referrals - ask around.  This is just one reason why networking is so important.

But don't think that this means you need to go to each and every property every time you want to make an offer.  You won't have time and they certainly won't have time.  You'll need to get a couple bids and get a feel for what things cost.  Again, maybe other investors can help with this - they might have bids for properties they already did.

I'm partial to the west side of town, but honestly there are good pockets (and less good pockets) all over the map here.  

Bellaire, Spring Branch and Katy are all pretty well regarded in terms of good school districts.

Flood areas - honestly, nobody knows.  Everything that happened before, is what happened before.  Massive excavation, new reinforced embankments, improved/expanded flood plains, and so on.  Next massive 10,000-year storm will come through and it will be all different.  So with that said, historically, really look out for Bear Creek in 77084 and also up around Spring Creek on the north side, places that get hit over and over.  

You planning to live there for awhile first?  Might want to keep it reasonably close to your work location, if so.

You know is what is cool about house hacking is this - you can pay more than the flippers, and even a tad bit more than the buy/hold crowd, and still get a deal that really works.  You do the work, the whole sweat equity thing, or at least, you do the part that you feel comfortable doing and hire out the rest.  And you aren't on the clock, racing against time to finish and get it listed or rented.  Way less drama with the contractors and way less stress (assuming your wife doesn't leave you midway thru).  

Anyway, huge respect for owning it and putting it out there.  You've overcome your own delusions and recognized what needs to happen, and I think that's half the battle.

Yes it was in 77082 in that Westheimer / Dairy Ashford area.  

Major learning event - this is investor codeword for I lost some cash but I completed it and lived to tell about it.  So many things I would have done different, but I was hard-headed and determined to 'take action'.

I think you just need to let the lenders get through this and you can apply.