All Forum Posts by: Michael Branch

James,

Thanks for the reply!

I do have a spreadsheet I’ve built where I’ve tried to capture everything. Just laid it out that way for the sake of the post. I’ve done a few (traditional, not brrrr) deals in the past and have a PM, lender, and Realtor. I’ve never done any flooring but my brother is a contractor. 

To clarify the 34% was not including PMTI. It was 10% maintenance, 10% Capex, 9% property management, 5% vacancy.

I guess I was just asking about the cash flow. I know it’s relative. All in it’ll be a bit over $17k for down payment , flooring, holding costs. 

Criteria for me is B and C class. Lower price point that allows affordability but still cash flow. Hoping to one day transition out into B class. Unfortunately I haven’t really delved deeper than that. 

Exit is a sale. Market in general very hot so after the cosmetic changes I don’t think it’ll be a tough sale. 

Likely just second guessing myself 😅 Need some motivation or outlook from you experts! Lol

Hi, wanted some other eyes on a potential deal. I go to check it out tomorrow and; if all looks good, would likely put an offer on it. 

In my KY market. 

• $45,000. Comps anywhere from $38-60. 
  All major mechanicals replaced. Roof fixed. 
  C class. Not much on the appreciation front for the area. 
  After PMTI, property management, and saving for vacancy, Capex, maintenance (additional 34% of rents set aside for all those) should net around $150/mo.
  Commercial loan able to get 3% w/20% down 5/1 arm amortized over 20 years. 
  Mostly ready to rent. Will probably put $5k in to replace some flooring, maybe some paint, etc. 
• Will have a financing and inspection clause to cover me. 
  
  
• Thoughts? Am i missing anything? How’s it look? Goal is just long term cash flow and wealth. 

Thanks so much. Very helpful and clear. I figured my original  plan was too good to be true lol. 

My plan B is just to use (almost all of) it to purchase a small multi family or more than one property. 

Hi folks! My first post!

Hopefully a quick question for you smart folks. I’ve looked into some research on 1031 exchanges but can’t quite confirm my thoughts. 

I currently have a SFR investment property (my first home, moved out and kept as a rental). The lease is up in a few months and I'm looking to sell and reinvest (HOA fees destroying cash flow). I'm reading David Greens BRRRR book and it has be intrigued on that method of investing.

My question (numbers are round examples, but close to what I’m thinking):

Let’s say I can get $40k of equity in the purchase (house sells for $145k, I only owe $105k). Assuming I can get 20% down loan, could I buy a $60k property (spending $12k of equity) and use another $20k of the equity on rehab, and then just get taxed on the last $8k (allowing me to have extra cash on hand to start my rainy day fund for that property, handle vacancy, etc)?

Then my plan would be to wait a year (seasoning period), refinance based on ARV, pull much of my money out and repeat.

Can the exchange work in that way? I've heard that the property that is exchanged for must be same value? Would that mean I'd have to find a property such that the ARV is more than $145k (in other words, spend more on down payment and less on rehab)? If that's the case it doesn't seem like a feasible strategy in this particular case.

Thoughts? Thanks in advance for your help.