All Forum Posts by: Scott Hollister

Hello @Diego Carrero, I live right in Vernon. Typically I can get anywhere from 50-200 for storage on having an extra garage spot or barn. But that looks like it has seen better days. And typically, you will have a lot of mouse problems, so someone looking to rent it might just need some tractor storage? 

But if you're thinking residential rental, speak with the town of Storrs first. I assuming septic and well? 

I agree with student rentals, very large pull around Uconn. 

@Richard Arden I see that your from Hawaii, first things first I hope you never have to deal with snow removal...haha

Two: being in the Northeast, snow removal can be a huge expense and often changes each year unless your contract is a fixed expense. I know some of the larger commercial properties have fixed rate removal. Often most expensive but allows you to factor it into your expenses so your NOI doesn't change that much every year.

When just starting out, the only time I "think" its ok to do snow removal is when you are house hacking your first multifamily. Just to get a feel for it. But even now, reflecting back over my short 6 years of investing, I never really to want you to do it and heres why:

• Even if you house hack a 4 unit, you are really only paying 25% for each snow storm removal. If you look at it like this, you are really not saving any money by the time you have to go out and buy salt, snow blower, and shovels. AND get up early before your tenants leave for work.
• Also, this is why you should not perform snow removal yourself. The liability! There is a local owner of 44 apartment units. He has done snow removal for almost 30 years. He got sued last year for over 70k because a tenant slipped and fell. Once you factor in the headaches and "saved" money, you really lose in the end. And the ultimate goal to invest in real estate is so that you can afford the freedom from a Job. If you take up snow removal, you are working a job. 

Here is how I handle snow removal. With single family homes, I place it on the tenants responsibility. I offer snow removal for $80 dollars extra a month. If it goes over that cost per year I pay, if it goes under then you get a check for the difference. But It costs, on "average" about $960 per single driveway per a standard year. This could easily double with a bad year, small storm year around $500. This also depends on how difficult it is to plow, where you can place the snow, vehicles in driveway, etc. It it is a multifamily, 2+ units then it is your responsibility to hire it out. 

Best advice is just to factor in snow removal when you do your underwriting. Have a good company come out and quote you. Also check with your insurance, they may require putting salt down as well. Typically an extra $25-$30 bucks each time. 

Hello BP, 

We are looking forward to our next Investor meetup in September! 

We always have great conversations and new connections. 

Septembers meeting is two hours of open networking. 

Meetings are low key, informational, and fun! 

From brand new investors up to the seasoned veteran are in attendance. 

Hope to see you there, feel free to reach out with any questions! 

Come join us for the Central Connecticut Meetup in Manchester! 

Our next guest speaker is Stephanie Cabral who is the founder of Sunrise Real Estate, LLC. Sunrise focuses on opportunistic, value add acquisitions that provide desirable housing, transform neighborhoods, and deliver strong returns.

Stephanie is a lawyer by trade and a commercial real estate agent at Colliers International.

Beginning with the acquisition and renovation of a condemned duplex in 2012, Stephanie unwittingly implemented a strategy of forcing appreciation and recapturing equity, known as the BRRR method. After the renovations were complete and the property stabilized with credit-worthy tenants, the property appraised for 33% more than the purchase price and renovations combined. Since then, Sunrise has executed a number of BRRRS utilizing various resources of financing including bridge loans of private and hard money, conventional financing, and commercial financing.

Today, Sunrise Real Estate is known for timeless renovations, tech-driven approach, and currently controls a portfolio of 11 units in single families and duplexes valued at over $1.4 million, has renovated 14 units with rehabs up to $160,000 per project, maintains unparalleled tenant occupancy, and boasts an impeccable track record with its investors.

@Remy Bonser Another great resource is the book from BP, Set For Life by Scott Trench. (Page here)

My best advice (assuming you're a full time student) would be to educate yourself and budget for an FHA loan house hack. That means you save up 3.5% for the down payment, plus closing costs, plus reserves. Then you occupy the unit and rent out the other 3, ideally living for "free" or making money. (Make sure you account for CAP EX and Repairs)

Scott talks about this in the book: Instead of cutting out the small $3-5 dollar stuff in your budget start with the most expensive, typically housing. Once you "wipe out" your housing bill, you will really accelerate your money for the next investment. 

Side notes:

• If you really want to do well, look into the 203k loan which allows you to purchase a property in disrepair, finance in the rehab, and force some appreciation. 
• My other best advice is to attend the BP meetups. Since you go back and forth, there are a lot of great ones in CT and MA. I have met some many great people who I continue to do business with and learn from. 
• Connect with a REO/RE Estate Investment friendly agent, which may be tough because of the time investment for the agent. But having someone as an expert in the area will really help you with your first purchase to make sure you don't get over your head. The more you educate yourself now the better the chance they will work with you. At first its a lot of hand holding which can be tough on an agents schedule.
• Keep an eye out for what properties are on the market, what they look like, details, and what they sell/rent for. That way when you're ready you will be able to jump on a good deal, its also important to act fast in a hot market. 

@Michael G. 

Ground up construction loan? Hard to finance now but possible. 

What are the numbers on it? Will you purchase the lot for cash? 

@Steve Fitzgerald, 

I wrap mine in with my personal and auto. I pay right around $1100 for home insurance(185k value), ring insurance for the better half, and umbrella up to 1m. I have had it between $150-180 per year for that last couple years. 

I use State Farm in CT, there is an amazing agent from our meeting that really works hard and she said State Farm is trying to build a better base in CT. They give you a 30-35% discount when you combine. They also have really good rental polices for my single family rentals. 

Hello and Welcome @Patrick Booth

There are a handful of great BP meetups in CT. 

I help co-host the Central CT Meetup in Manchester! Low key, friendly, no pitching, and good speakers! 

@Stephanie Cabral does an amazing job with the Greater Hartford meetup in Glastonbury! 

@Chris Puglisi hosts the Wallingford meetup, haven't been yet but its on my list! 

@Jonathan Makovsky hosts the Fairfield meetup and was also a guest on the BP podcast! 

Best place to find events: https://www.biggerpockets.com/forums/521-events-and-happenings

Hello @Diana Washington

I HIGHLY recommend this strategy. The best way to get started IMO, with small cash reserves, is to max out all the agency debt you can. (In a good way of course). 

You won't hear this much but you will get to a point where your DTI (Debt to income ratio) will be out of whack. That means you were too aggressive on tax returns or you don't make enough compared to your debts. This is ok and most investors hit this point. You will just have to turn to commercial debt or seller financing, etc.

I just worked with one of my past teacher friends, I'm now full time investing in real estate/part time agent. I represented her as an agent. She just got married, her husband already owned a home (Now a cash flowing rental.) But our goal from the start was to maximize their buying power with using the capital they had. So she went and bought a 4 family house hack with an FHA 3.5% down, they will be "making" +$175 while living in one of the units. This is not taking in the CAP EX which will probably be additional 300-500 a month, most has been taken care of already with new roof, siding, furnaces, barn. Its a very large 4 unit. But there is also some upside in the rents as well.

To sum it up, you ARE on the right path. No need to have it in both your names, maximize your buying power with a house hack 4-unit. 

I'm trying to think of any agents I know down there that are investor friendly. Maybe @Ryan Luby or @Michael Noto?

@Joseph Parker

I thought about this for a few years before getting my license, I know have had my license for over a year and I can offer my input on experience. 

Cost of getting it: $767.02 (That was a two weekend 40 hour course, two hotel nights, food, and travel expenses, test fee)

True Cost of year 1:

Total Commissions for two sales: $6,016.88 (Two properties 195k and 167k, 2% and 2.5% commissions)

Total Expenses: $3,288.73 (Association of realtors, MLS, E-Key, CEU's, Lockbox, shirts, business cards)

Start of Year 2: 

I've had 5 sales, 1 was a recommendation for a rental property listing. 4 were through family/friends. 

Roughly an income of 15k+ (Before taxes)

This is my niche, working with people who wanted to house hack, 203k rehab, or live in flip. I LOVE looking at foreclosures and value add deals. I focus on getting people into good houses with instant equity. And since the seller pays my commission, people get an amazing deal and I find myself very fulfilled with helping people find their own slice of financial freedom. 

Here is my best advice: 

• DO get it if you plan to leave your job to enter full time real estate investing. I've found it a worth while decision if i can close 3 deals per quarter, that roughly equals my 45k teaching salary with far less time involved. NOT easier than teaching, just different. More hours on nights and weekends though. But during the day I can focus on find cash flowing investment properties (P.S. this is the ultimate goal, don't lose sight of this)
• There is no such thing as a successful part time agent. I have heard this from more agents than I know of... But I think its true just like anything else. If you are truly trying to be successful as an "agent", then you must devote a lot of time in the beginning to the process of becoming better. 
• Passive Income: You noted that you were looking to increase this number, being an agent is active income. It is another job. To be truly passive, you have to have agents working under you as a team. I have recently joined eXp for this very reason. It still involves work but a different type of work like lead generation, etc. 
• Flexible: I like hearing that your boss is flexible, being an agent with that type of schedule is nice. Just make sure you sell enough to make it worth your time. Typically 1 house in the 200k range pays for all the silly yearly fees in my market... 
• My advice on a brokerage: Find a good mom and pop investor one. They will give you a higher split and will be well connected in the local area(my first split was 75/25). HOWEVER if you are truly trying to become an agent, sign with the larger company in the area. They have systems, processes, and education to help build you to be a successful agent. This will cost you money though, in the way of a 50/50 split. Again, if you will need a lot of hand holding, that split is fair in my opinion. And if you negotiate, work on a higher split with the more houses you sell that year. For instance, every house I sell over 6 this year the commission split goes to 65/35, etc.

Final thought: If I had to depend on this income I think I would be scared the first year. But I also think it depends on how hard you work. Its amazing to get paid on the amount of effort you put in, but the other side of the coin is that you wake up every day unemployed. But I wouldn't take back my decision of becoming a full time investor, it adds credibility, good access to properties, and puts food on the table until my rental income replaces my 45k income completely. 

Best of success and feel free to reach out with any questions!