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All Forum Posts by: Nicholas Lohr

Nicholas Lohr has started 36 posts and replied 298 times.

Post: Allocating expenses in bank accounts

Nicholas LohrPosted
  • Investor
  • San Francisco, CA
  • Posts 300
  • Votes 205

Hey Adrian,

I currently have 1 property and 1 mortgage. I have a business (LLC) back account with both a checking account and a savings account. The security deposits from the tenants are in the savings account and everything else is goes in and out of the checking account.

I do a $300 dollar automatic transfer from the checking account to the savings account each month as a reserve fund for things like repairs and cap ex.  If something comes up I transfer the needed cash back to the checking account and then write a check.  I do this just so I'm not tempted to spend the allocated repair / cap ex money on other things from the checking account by accident. Actually so far when little things have come up I have just paid for them out of the checking account anyway, I guess I'm conservative, the 300 going in to the savings account each month is for a very "rainy day" just in case.  Helps me sleep at night.

One thing with this system is treat the tenant security deposits as if they are not there at ALL!  If there's 3500 in the account then there's really only 1500. (3500 - 2000 in security deposits)

@Linda Weygant  awesome, thank you!

I did the BRRRR strategy complete with the rehab and cash out refi. I currently have the old loan and all the improvements reconciled in quickbooks but what I don't have is the new loan and the large amount of cash out refi money reconciled in Quickbooks. Any tips on how to properly incorporate everything together?

Post: NYC- where to buy to hold and rent with 700k budget

Nicholas LohrPosted
  • Investor
  • San Francisco, CA
  • Posts 300
  • Votes 205

700k as a down payment or 700k total loan amount. Sorry if that seems like a weird question but in NYC 700k down payments aren't uncommon! ha 

Post: First investment decision

Nicholas LohrPosted
  • Investor
  • San Francisco, CA
  • Posts 300
  • Votes 205

I'd recommend the "house hack and hack and pocket 1300 a month" option for sure! That way you get to live rent free, assuming the numbers work, and you get to get your feet wet being a landlord.  If you have the means perhaps consider getting a multifamily that needs work and then you can do the BRRRR strategy. 

Post: What city is good for buy and hold?

Nicholas LohrPosted
  • Investor
  • San Francisco, CA
  • Posts 300
  • Votes 205

Hi Kin,  I also live in SF but invest in Sacramento. It has worked out well for me so far and the drive is doable. I came close to trying to invest in San Antonio, Kansas City, etc but I decided on Sac for the proximity and I'm definitely glad I did!

Post: My family owns 4 houses. Good investing strategies

Nicholas LohrPosted
  • Investor
  • San Francisco, CA
  • Posts 300
  • Votes 205

hey Bill, You said you own those outright which is awesome! You could refinance them and get some cash out to finance the down payment for a multifamily. And since you have 3 rentals I bet you'll have enough capital for a down payment on a a property that needs rehab AND be able to pay for said rehab too. That way you could do a BRRRR deal on it the new property and keep it going!

Just make sure the refi terms will still leave enough cash flow on all 3 of your rentals so you don't go negative.

Post: BRRR timeline question

Nicholas LohrPosted
  • Investor
  • San Francisco, CA
  • Posts 300
  • Votes 205

Hi Natalie . Here is a link to a BRRRR question. I posted a pretty long description of my experience and there is some other useful info in the thread too.

https://www.biggerpockets.com/forums/67/topics/427...

You are correct that banks will lend 70% of the appraised value.  

Yes you will need to hold the rental for a certain amount of time and collect the rents to show the refi lender that it is seasoned and stable.  The amount of time will depend on the lender but plan for 1 year to be safe.

I'm not sure if the lender will lend you the repair money too, I think this depends on who you can find as a lender. 

The numbers that you have there all look good to me, however make ABSOLUTELY sure you have the rehab cost and the ARV correct. Perhaps walk the property with a couple different contractors and use the highest bid to be safe. Also Bigger Pockets sells a rehab book by J Scott that I highly recommend. Have a realtor get you renovated comps that have recently sold that are similar to what yours will be.

Post: Should I overpay for my first property?

Nicholas LohrPosted
  • Investor
  • San Francisco, CA
  • Posts 300
  • Votes 205

Hi Jim,

We would need a bunch more details about this and about your situation. Things like if the current rents are below market, what the ARV would be once it's completely fixed, how much the rehab would actually cost, do you have a day job with extra income to fund the rehab or the loss per month while you are fixing it up, are you looking to flip or buy and hold, etc...

For my first deal, which was a value add deal, I made sure that the before rehab rents covered the initial mortgage and that I had more than enough capital built up to cover the rehab, expenses, and paying the mortgage out of pocket for 6 months just in case. 

I know you're probably eager to get going but having an out of pocket loss each month with get old really fast!

Just fyi if you're planning on doing a BRRRR deal the two most important numbers to get right are the ARV and the rehab cost. 

Post: Questions about BRRRRR method

Nicholas LohrPosted
  • Investor
  • San Francisco, CA
  • Posts 300
  • Votes 205

@Account Closed yes that's exactly right. the new mortgage pays off the old mortgage and what's left over is what you walk away with.  also just fyi there will be closing costs on the new mortgage too which will lower the cash out a bit.