All Forum Posts by: Milton Chamberlain

Having an existing HELOC is always a great resource (if you are planning on repaying the HELOC through the sale of said property, assuming equity would cover the loan payoff. That way you can bypass a bridge loan.

I have borrowed $50k from my father to float some of the purchase of a Dental practice my wife owns...we simply pay into an account that we use to periodically pay him back lumps sums. Your terms would depend on the person, obviously.

When did you buy/rehab property?

I am not familiar with San Diego, but I would believe market value and rental income are appreciating at a steady clip? That 2.7% rate is pretty special...If I were in your shoes, it would depend on what I could leverage that 200k into out of state.

There is ample opportunity here in KC (my market...I work as a Realtor here and own 3 SFR as investments). If you would like to learn what you could do with your 200k here, let me know

This is a great deal. I thought I would share with BP community. It just came on the Heartland MLS yesterday (Kansas City Metro), and is listed at $255k. I imagine there will be competition at this Price Point in this A market area. (Roeland Park is a high price point area, Which turns into Million dollar homes as you head South into Mission and Fairway.As you head NW, it turns into a C market area. Directly North is still A market-Shawnee)

It looks good with straight investor metrics using Fannie Mae conforming loans (25% down, 7.1% rate with a few points) and easy ARV monthly rent of $1700/unit ( I get this number based on the exact same floor plan in Raytown with complete rehab placing a tenant at $1500, and Raytown gets lower rents than Roeland Park KS.) Keep in mind I have 20% held in reserves and expenses for Mgmt/repairs/cap ex.

COC: 6.7%.            Cash flow:  $960.         Cap rate pro forma 7.26%...better if you can get that $75k rehab budget down

For house hackers, it appears putting 10% down (if you could swing it) would be best. Using income assumption of $3400, so after buyer fulfilled one year obligation as owner occupant. Keep in mind I removed 10% mgmt fee, but kept 10% reserves for Capex and repairs:

Cash Flow : $960   Pro forma cap rate of 8.42% (obvs better if you could get my high estimate of $75k rehab down)

COC return:  9.6%

If any OOS or local KC investors  are interested in having detailed analysis and information sent your way, contact me.

We have plenty of sexy properties like that in Kansas City. TONS of SFR listings in the Troost corridor heading up to the river and then curving East along independence Ave.

But they present many challenges; vacancies  (due to below C market tenant pool), increased maintenance and repair costs (due to below C market), and increased cap ex due to homes in this particular region being older (many century homes).

Then, even if at the end of the year it does well from a financial analysis standpoint, you may struggle to find the necessary and diligent and high performing property mgmt necessary to manage said property…so then if you self manage OOS, you will need a strong ‘boots on the ground’ team.

many challenges come with these ‘$ sexy’ properties. If it sounds too good to be true…

Personally, I have one SFR investment in a rougher area. To illustrate the challenges I have faced in the last three years; robberies, vandalism, assaults, evictions and vacancies. You might get lucky and dodge these issues, but I would expect these challenges investing in below C category markets

All that being said, it’s still a solid producer financially. But my property manager hates it. And I’m pretty sure the only reason he still manages it for me is bc I’ve given him a lot of business on the construction side of his business.

I own 3 SFR as investments in Columbia MO, along with my 4th primary SFR in KCMO. two of the 3 investments have been gutted and rehabbed. I Bought a dental practice with my wife 2 years ago, so once we are no longer poor from that, plan is to convert 3rd property into a STR. Then plan is to merge some City lots I own in Columbia MO and build new construction triplex.

Then my plan is to begin investing in my local market of KCMO. For now though, I just assist local and OOS investors underwrite deals, and act as boots on the ground for my OOS investors. I am well versed in laws pertaining to STR regulations, which are extensive in my market.

definitely a bummer all around. you sound like a very nice guy. I also suffer from 'nice-guy-itus.' so I feel your pain. It may sound silly since its not a traditional business, but that's what REI is, so you must treat it like that. Which in this situation, means holding the tenant to the rules.

Where I live, there are many organizations families in need can reach out to for assistance. I would urge them to do that. Being a nice guy, you could give them grace and act in good faith, and let them know that you will give them time to set up assistance, but after the next month, if rent is not paid on time, the eviction process will begin.

You also must be careful, bc you get into a legal grey area by being nice and giving people breaks, however if you do not give those same breaks to everyone, you open yourself up to discrimination.

I would definitely call that bank and tell them to make it right or they will hear from your attorney.

The tenants hardships are not your responsibility. You may be a volunteer/humanitarian, but that does not include your REI business. so point them towards some help and hold them to their lease agreement.

All of my good faith would have gone out the window once they lied to me about stealing my check. 

My understanding was it needed to be 1 year of steady income to be considered, BUT not a lender, so obvs confirm with them. I'm sure there is some loan product that can circumvent this, like a DSCR. Having a HELOC on your FL property is always a good thing to have in your back pocket, even if you have no plans on using it

Hi Erik, Happy to chat with you about your goals and how investing in real estate can help you. Give you any feedback you may want.

The selling strategy we utilize in my brokerage (ReeceNichols) is relationship based, and is from 'Ninja Selling' by Larry Kendall (sp?) The essence of it is reaching out to your friends and Family and simply talking to them. The idea is that they already know and trust you. Which is very important, and hard to achieve with a person you just met (leads, open houses, Facebook groups) While you may work with 'strangers' from these groups in your career, typically you will work with folks you already have a relationship with. I would recommend you read the book 'ninja selling,' as it provides you with a solid plan and schedule filled with action items to follow and execute to get results (if you follow it) And its not cringey, salesman strategies. Which I am not a fan of. Dont completely ignore open houses, fb groups etc, as I have had great clients that I met through those, but dont make them your main focus. Keep in mind, you can only host open houses for listings within your brokerage. and if you go to other agent's open houses and start soliciting the patrons for business, the agent/host will not take kindly to it :) 

What's up Jonathan?

Great idea house hacking. You live in one of the biggest REI areas of the country, so smart to take advantage, especially now that they opened up 3 and 4 unit multis to owner occupant low downpayment options.

I looked at a great 4 -plex available in Gladstone for $365, will probably go for $385.great deal. good condition. $800 per 2 bed /1 bath unit. quick mortgage calculator puts zero% down monthly payment at $3500, plus then offset with $2400 puts you on the hook for $1100. 

I dont work Lawrence, but I see multis pop up on our MLS...look like good deals are available. I assume Lawrence is pretty similar to most KC suburbs in regard to client pool, appreciation, expected cash flow etc. If you are going to be there a while longer as a student, might as well scoop up a multi!

If you are ever in KC, happy to meet up and talk shop with you.