All Forum Posts by: Mitch Messer

Mitch Messer has started 81 posts and replied 2146 times.

Hi everyone, I’m Kevin! I’m based in Queens, NY, and I’m just getting started on my real estate investing journey. I recently joined BiggerPockets because I want to learn how to build financial freedom—first for my parents, and then for myself.

My long-term dream is to purchase an apartment in Barranquilla, Colombia, where my parents are from, so they can retire comfortably. I’m also looking to invest here in the U.S. and create rental income through small multifamily properties or house hacking.

I currently work as a Spanish interpreter and earn about $27K/year, so I’m starting from the ground up—but I’m committed. Right now, I’m focused on learning, networking, and preparing to make that first move.

❓One thing I’d love advice on:

What’s your best tip for someone starting with limited income but big motivation and discipline?

Looking forward to learning from this awesome community and connecting with like-minded people!

Thanks,

Kevin M.

Hey Kevin, welcome to BiggerPockets!

I was raised in Queens, NY and I can relate to your goal to build financial freedom.

Also, while I've not yet visited Barranquilla, I have lived in Medellín and Santa Marta, Colombia! It's a beautiful country.

Fortunately, your personal income has little to do with your desire to learn real estate investing.

When you're starting out, only TWO skills truly matter:

1. Learn how to analyze, recognize and organize money-making deals.

2. Learn how to speak to sellers in such a way that they want to tell you their problems.

To develop these skills, you don't need a dime. You DO need to put in the hours practicing.

Find investors in your chosen market who are actually closing deals. Analyze the deals they've done. Talk to the seller leads they throw away.

Get some repetitions under your belt and you'll be well on your way!

1 Vote

New York City, New York

Quote from @Calvin Huddleston:

I am looking for a wholesale contracts forum I can used as templet.

If anyone can help please contact me

You should join Georgia REIA (google them for the website). Last I checked they had a library of real estate home-study courses that members could access. You'll find what you need there.

1 Vote

Atlanta, Georgia

Quote from @Jason Eyerly:

Quote from @Mitch Messer:

@Jason Eyerly Congratulations on getting a property under contract.

Just don't celebrate too soon...

Your next step should be to quickly perform due-diligence, to see if you really have a deal or not!

At an ARV of $180K, with $70K in repairs, your MAO should be closer to $56K.

So, you're already in the deal nearly $10K too high!

That means if you're unaware of any major (yet hidden) repairs, you may end up LOSING money on this deal.

Get an inspector (or GC) out there ASAP to see if that $70K rehab budget is real or just wishful thinking!

How do I go about getting them out there while I'm remote? We haven't signed anything or made any agreements but I didn't want to ask for a contractor to run through before I have anything under contract - I'll exhaust my contractor already. Based on what I plugged into the BiggerPockets Calculator if I wanted to profit $25,000 and there was $70k in repairs it said max allowable was $78,000 so I actually told them $65,000-$70,000.

Fortunately, you're in a city with a strong investor presence.

I recommend you reach out to one of the many local real estate investor associations (google "Charleston REIA") for solid contractor recommendations.

I'll bet someone good would do it for a couple hundred bucks.

I'll just say this about using anyone's calculator: You need to understand the assumptions behind it. The MAO formula (max_allowable_offer = 70% of ARV - Repairs) has been around far longer than BiggerPockets.

In order to make a profit on a fix-and-flip, you've got to know your rehab costs, but you ALSO have to account for:

- Financing costs, including origination and interest payments (unless you're paying cash)

- Holding costs, including property taxes, insurance, utilities

- Selling costs, including real estate commissions, buyer concessions, closings costs

If you were to pay $78K, put $70K in to rehab, and then spend another $15-20K on financing, holding, and selling costs, you will NOT be seeing $25K profit.

Anyone saying different should be required to show you their math!

2 Votes

Charleston, South Carolina

@Jason Eyerly Congratulations on getting a property under contract.

Just don't celebrate too soon...

Your next step should be to quickly perform due-diligence, to see if you really have a deal or not!

At an ARV of $180K, with $70K in repairs, your MAO should be closer to $56K.

So, you're already in the deal nearly $10K too high!

That means if you're unaware of any major (yet hidden) repairs, you may end up LOSING money on this deal.

Get an inspector (or GC) out there ASAP to see if that $70K rehab budget is real or just wishful thinking!

1 Vote

Charleston, South Carolina

Quote from @Daniel Tywater:

Quote from @Mitch Messer:

Quote from @Daniel Tywater:

Quote from @Mitch Messer:

Quote from @Daniel Tywater:

Purchased a rental property approximately 3 years ago out of nowhere with no experience what so ever. I did a cash out refi on my primary residence and paid all cash. Original purchase price was $135k and put $10k to bring it to date. Home is now valued at approximately $375k. Fast foward to today, I want to start investing more. I found a duplex for $359k that checks all the boxes for me. Just wondering what are some of the ways you would structure this next purchase. Also I have not formed an LLC, but not opposed to creating one either.

Daniel, assuming your underwriting is sound, the next steps are pretty straightforward:

1. find yourself a great private lender

2. purchase for cash

3. complete your rehab

4. secure a tenant

5. refi with a DSCR loan.

Why not go straight to DSCR? Duplex is already rented on both sides with long term tenants. Would you avoid conventional all together?

If the duplex is already fully rented with long-term tenants, my first question would be "Why is the seller selling it?"

If there's no rehab to be done to increase value and I can't raise rents, odds are very good that this investment is going to yield mediocre returns at best. (I'm betting the seller is asking for top dollar.)

What do you estimate your cash-on-cash return to be?

Seller has 2 on the same road and purchased at the same time 4 years ago. He listed both at the same time. I am unaware of reasoning at the moment. Estimated CoC is 11% self managed.

As someone who made this mistake repeatedly in my real estate career, I would beg you not to exclude professional management costs from your operating expenses.

Management is not an optional expense. You're gonna pay for it, whether you do it yourself or hire a PM. (In fact, if you're not experienced, you'll likely pay more doing it yourself!)

So, considering market-rate management fees, realistic vacancy loss, property taxes, insurance, capital expenses, and any other real-world expense you'll encounter, what's your TRUE cash-on-cash return?

I can guarantee you: It's not 11%.

0 Votes

Quote from @Daniel Tywater:

Quote from @Mitch Messer:

Quote from @Daniel Tywater:

Daniel, assuming your underwriting is sound, the next steps are pretty straightforward:

1. find yourself a great private lender

2. purchase for cash

3. complete your rehab

4. secure a tenant

5. refi with a DSCR loan.

Why not go straight to DSCR? Duplex is already rented on both sides with long term tenants. Would you avoid conventional all together?

If the duplex is already fully rented with long-term tenants, my first question would be "Why is the seller selling it?"

What do you estimate your cash-on-cash return to be?

0 Votes

Quote from @Daniel Tywater:

Daniel, assuming your underwriting is sound, the next steps are pretty straightforward:

1. find yourself a great private lender

2. purchase for cash

3. complete your rehab

4. secure a tenant

5. refi with a DSCR loan.

2 Votes

Quote from @Marc Shin:

Hello,

I'm trying to determine the right monthly rate for an MTR that has 2 beds and 1.5 baths. I know it's location dependent, and also dependent on how much LTR and STR rates are.

But i have a potential insurance claim. And they asked me how much i want to charge. I don't want to over charge, but I also don't want to under charge. Can i throw out a high number and then let the insurance company tell me that is too much $$?

You can see what comparable properties are renting for monthly in your area on one of the popular short-term rental sites, such as FurnishedFinder.com, Vrbo.com, or Airbnb.com.

0 Votes

Quote from @Stephanie Brinson:

Hi all! I'm actively seeking funding to acquire a cash-flowing dry cleaning drop-off business near Kennesaw State University in Georgia. The business is clean-no debt, no production, streamlined-and the seller is offering full training.

This is a purchase I'm making alongside my daughter, and we'll be overseeing operations with the help of a local hire. The plan is tight, the numbers are proven, and I have:

*A fully detailed business plan with projections and operational strategy

*2 years of verified monthly sales data

*All financial docs accessible through the seller

Looking to connect with lenders familiar with non-SBA deal structures. Please reach out if you fund straightforward service-based business acquisitions!

Thanks in advance,

--Stephanie

Hi Stephanie, does this business own the real estate from which it operates? If so, what do you estimate that commercial property value to be?

0 Votes

Quote from @Chris Seveney:

Quote from @Mitch Messer:

I TOTALLY missed last year's BiggerPockets Conference by about 50 minutes.

It was held in Cancun (México), and I was living in Playa del Carmen at the time, just under an hour's drive away.

But, I didn't find out about the event until the last day ... 😭😭😭

... so I didn't try to make it.

I probably SHOULD have tried, though, because I hear it was 🔥🔥🔥!

This year I'm starting EARLY and making plans to attend !

Looks like it'll be a GREAT time! (Plus, it's Vegas, Baby! 😁)

Anyone else planning to go? Comment below!

I plan on being there.

I would LOVE to catch up with you there and grab a meal, if you're open to it!

0 Votes

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All Forum Posts by: Mitch Messer

Mitch Messer has started 81 posts and replied 2146 times.

Post: New to Real Estate – Based in Queens, NY & Ready to Learn

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Post: Looking for seasoned investor thoughts in my next step.

Post: Looking for seasoned investor thoughts in my next step.

Post: how to determine the right rate for MTR

Post: Seeking Lender for Low-Risk Service Business in GA

Post: Anyone from México Going to BPCON25 in Las Vegas (Oct 5-7)? 😮😮😮