All Forum Posts by: Mark Trebor

I will speak to the private money question.  I think the answer is a big, "it depends".  Whatever you and private money person agree is what the deal is.  A stranger is not going to give you 6% on 200K, you rich uncle might!  A stranger with that level of investment is going to want to see good numbers and be on the title and will probably charge you 8-12%.  It is so relationship dependent, the best deal I have agreed to with a stranger is 180K, 4.75% for 18 years.  But I have done deals with family where I have paid them interest only and then a balloon 2 years later.  

ARV is tricky too its just a numbers game how good are you at guessing the quality of your finished product and the market conditions when your project is finished. With no experience I would say you will over value your repairs and over represent the quality. Over time you will learn how much a bath remodel costs you and how much you get for that. There is allot of information out there that can guide you but until you have a couple under your belt in your environment its just all educated guesses. Sorry that really doesn't answer your ARV question but its honest.

Good luck!

Before you make an offer you should probably have your finances in order.  How much cash do you have? Are you getting the down payment from somebody other then yourself? How large of a mortgage do you qualify for? You need to know those answers before making an offer.

I like your concise summary of your thinking.  Should help people starting out.  You can get lost in the woods with all of the terms but what you have written is the basics.  When I look for houses I now know that whatever the monthly rent is I can pay 100 times that for the house.  If the house is more then that I am not interested.  That's my version of keeping it simple.

But behind my simple version are the same basic numbers you use. But instead of 1 months rent for CapEx I use 15% (of revenue) for CapEx/Maintenance and 8% (of revenue) for Operations (accounting, advertising, house showings, etc.) I also always put 20% down so I don't take into account time value of money on that 20%. Keeping it simple has aloud me and my two partners to get to 19 houses (all rented to college kids). On those 19 houses we cash flow about 10K/mnth, I'm not retiring on that money but its a nice boost to my W-2 income.

Looks like a great deal, just jump in and start making that money.  At least make the offer, if nothing else you get your feet wet and are more confident the next time a deal comes up.

We give a 24 hour notice and say they have the option to be there or our contractor will let himself in via the lockbox.  We trust all of our contractors and have used them for years with no issues.  I could see how this could be problematic if you did not have that situation.

I always love when people post about their "team" especially somebody just starting out.  What do you plan to offer to your "team" members that makes you think they will want to help you?  Do you have deep pockets? Do you have a skill that nobody else has?  No contractor is going to say yeah I'll drop everything for you, when you buy that house that you can't tell him the location of, or what it looks like, or how many bedrooms etc.  Focus on what value you can add to somebody else's "team" get some experience then work on your "team".  Or just go for it, find a house buy it and start learning all you need for that is loan officer and a computer.  Good luck!

Sounds ridiculous to me!  Its much harder to get 20K back from somebody then it is to give 20K to somebody.  Why are you calling it a 20K deposit?  Is this a contract for deed sale or are you buying directly from the seller and then using a title company to finish the deal?

If your communication for the refi was anything like your post I can see why its taking for ever.  You might want to consider proof reading what you type, and being more concise.  I'm not the grammar police but yikes!  Sometimes less is more.  Good luck 

Thanks George, I don't think this changes too much but its only $300 * 12 or $3600/year.  The $300/mnth hit on cash flow was for all 6 houses combined not each house.  Thanks again for taking the time.

So my investment group owns 19 SFH that we have bought and have chosen to hold. We currently have 6 houses that we are targeting to refi. The average interest rate for the 5 houses is over 5% but with today's low rates we can get around 4.125%. The 6 houses are valued at 1.2M and we owe 650K on them. Our P&I is currently $4097/mnth for the 6 houses. We are contemplating refinancing the 6 houses into 30 year loans and taking ~$220K in cash out. Our new payment P&I for the 880K loan will be ~$4400/mnth. The three of us are simply of thinking about rewarding ourselves. each taking 70K and some change for a reduction of only $300/mnth cash flow. All 6 of the house cash flow nicely (nicely = $730/mnth per house after PMIT, maintenance and operations). What would you do?