All Forum Posts by: Scott Hollister

Hello @John LaMedica,

My assumption would be inflation. On average there is about an 3% growth per year in the US (This depends on your area as well) 

But remember you won't be making that much more each time with the increase and DO NOT buy a property based on future cash flow (This is risky business, although there are a few exceptions)

Your cost to maintain the property in the coming years that will require that extra cash flow. Taxes almost always go up so you can count on most of that inflation to go there. Cap Ex like roofs and HVAC will cost money over time. 

As @Brandon Turner always says: Those examples are for HIS market and might necessarily hold true for your area. 

Hello BP, 

Lets say you meet someone with $200 Million and they want to put it into real estate. 

1. How would you add value to this person? 
2. Which investment vehicle would you chose? (Single Family, Commercial, Etc.)
3. Who would you have on your management team to make these deals possible? 
4. How would you pay yourself for your time? 

Hello @Benjamin Richards,

I have BEEN and CURRENTLY buying new appliances which seems all the time this year! I have searched up and down on craigslist, second hand consignment shops, etc. I finally came to the conclusion that buying new offers piece of mind and the prices are so cheap you can't go wrong. 

 The best deal possible for a great set now is home depot. 

• Special Buy! Its the absolute cheapest deal you can get for quality appliances. 
• Also, they offer $$ off for each one you buy over a certain amount. 
• This fridge is the best deal IMO for flips and rentals (In my area) Looks clean, great reviews, great price. 
• Then just order the other appliances you need. 

All new appliances, fridge, dishwasher, oven, and over the range microwave for around 2K. This is for a quality/higher end flip also. 

Good luck with the choice Ben! 

Hello @Jennifer Umbaugh,

Which option do you think will add more value in terms of getting this property sold? 

I would post it on the MLS and allow the buyer the choice, if you're already doing it then keep up to them! (Kind of a bonus for them:)

Hello @Greg Ressler!

First off, I love this post because this sounds like a deal I WOULD want to get into! Ha

Second, I have a hard time taking my emotions out of the deal so I will try to do this for you! 

• Ok, lets say you get the duplex, will the town nail you with non conforming? Or maybe they wont approve it to be a habitable dwelling? (Making you not be able to rent it) Do me a favor and contact the town directly, ask them and get their answer in writing. 
• I have the same issue as you! I have two houses on same deed and I had to get a HELOC out for another rental. First appraisal came in 50k than the value! KEEP bugging a local credit union! Some still go up to 100% LTV! (Just as long as you know it will appraise for the value you know its worth, it would be pointless to bug them if its only worth what it appraised for.
• Which brings me to my next point, if everything checks out with the town, use your HELOC as the down payment with a commercial loan? (I wouldn't really advise this because it will take a long time to pay off that loan.)
  • Always ask yourself, "Is this the highest and best use of my money?"
  • Another option is HELOC with a hard money lender combo. Buy a property that needs work, force appreciation with repairs, and then getting a regular mortgage while paying off that HELOC on the cash out refinance.
• You could always talk to the owner to do a seller hold back. That way you would only have to bring 10% or so for the down payment.(From what I hear that is the minimum skin in the game a commercial lender will do) Again, this puts you into another loan. If you decide this route just make sure the cash flow still makes it a good deal, remember to take emotions out and look at it objectively. There is NO NEED to buy a property thats a bad deal, its better to have no deal. 

Good luck with the decision and let us know how it goes Greg! 

Hello @Tim Mensch,

I think the issue here is quality of your rental and not what code says. 

• I would think having a bathroom vent going into the roof would cause moisture, which could result in even more problems. 
• Also, the dryer vent could create lint build up and cause a fire. Your insurance would not cover this most likely, especially now that you know about it. 

My advice would be to adjust your offer accordingly to have this remediated the correct way. Get a quote and have someone else pay for it. (Example: Lower offer)

Good luck Tim! 

Welcome @Peter Boutros,

You have come to the best place for learning REI!

• Have you picked a farm area? A area that you will invest in? 
• Have you lined up financing? Figured out the down payment? 
• Are you using calculators to see what you can pay for a property?
• Do you have an investor friendly agent that will help you through the process?

Once you find a deal, use the BP calculator on here and we will take a look! 

Good luck Peter! (P.S. listen to all 200+ podcast shows:)

Hello @Michael Cavicchi, 

We have a meet up next month where there are always a few real estate investor realtors. Like @Thomas Franklin said, interview and find someone that is a good fit for you. That is some great advice! 

I did the same thing earlier this summer and found Chad Crookes, like @Oz Pariser said he has both sides of expertise. We are a good fit and he works hard. I have closed two properties with him since the beginning of summer. (I DON'T recommend people I don't trust)

Come to next months meeting, meet with others, interview them, choose who is best for YOU at this given time. It is very important that you choose someone who is an successful investor themselves. Most agents I've found to be clueless about REI.

Best of luck Michael! 

@Sean Autry there you go! Keep thinking creative and make sure it is a win win for all parties. Ya I don't do buy and holds with partners just because I still self manage my properties. 

My issues with partner buy and hold: 

• Who takes calls? 
• Who fixes it this time? 
• Lets say we get a management team, after splitting profits we might make $25 bucks each month
• Tax season...
• House limit (most banks around here only let you have 6-10 houses) I tell my friends why share 10 when we can each have 10! 

I have been in since 2012 with my first House Hack before I knew about BP. Then stayed quiet for a few years and then found BP on a google search. I then started listening to podcasts on the way to work, connected with a local, helped start a local meet up, met investors, and then got a no money down BRRRR single family this year with a hard money loan. Last week closed on my first flip with two other partners with private money.

So I am still fairly new to the game and I can only offer advice on things I've done or read. But I am a hustler! I go go go when it comes to education, I have daily, weekly, quarterly, and yearly goals that I try to crush. 

As for the full time thing, thats always a tough question. I like teaching but making real estate full time takes patience. And what if we have another crash? My ultimate goal is net worth of 10 Million so I think I might teach for 20 years (earliest retirement in CT) and then go "full time". 

Then again why am I doing all of this? To become the best father, husband, grandfather I can be. For that I need time and the freedom from being wealthy. So maybe I need to go full time! ha

So ask yourself the same question and really focus on what you want in life. It might be closer than you think! 

This is one of my favorite parables about a Mexican fisherman, check it out here!

@Bart Modzelewski yes typically you pay 12%, points, and minimum 10% down for skin in the game. I have a local hard money lender who will take another property as collateral as the down payment. So the possibilities are endless. 

@Account Closed is right and brings up a good point. You can usually make your own terms once you have a relationship with people that have money AND you have a successful track record.  Have an attorney draw up the documents, put them in first position so all parties are protected. My father always said if you do something, do it right the first time. 

So here is private money deal I closed on last week. Investor wants a fixed 10% on purchase of property and rehab, 12 month term, no points. No money out of pocket, everything else is paid for along the way, we provide sweat equity. MUCH better than hard money. She will make 12k in 5 months on a 120k investment. So win win for all!