All Forum Posts by: Dave Passey

@Earl Hatmaker

I think you are missing the point of what the OP said. He mentioned that his insurance didn't cover it if there was an issue with them. That is totally different than a stove, hair or clothes dryer. Totally different than having a tower garden. No one is asking for bubble suits at all. With the changed laws, if their insurance will cover it, then it is a different story, but that was not the premise. 

I don't want to allow things that the insurance won't cover because I guess I am not as lackadaisical as @Reginald Willett and would have a tough time if my rental is up in flames and I don't have money from the insurance to rebuild it.  I guess some people have money available to just build a new house. Maybe one day I will be as wealthy as y'all. 

Should I wear a Halloween costume? Or should we prepare some investing horror stories to honor Halloween?

@Horacio Gutierrez It varies with the lender and with what types of loans you are getting. You may want to talk to your lender about in house portfolio loans. You will not have the same restrictions on the amount of loans you can do. However, if you are not at that stage yet where they turning you down, just focus on getting more properties. Let future Horacio deal with what you will do if you have too many properties that you can’t get loans anymore. It is a good problem to have.

@Adrianne Coleman Look up Senna Home Buyers. That is Sam Craven’s company. He has been on the podcasts a couple times. Very knowledgeable in real estate and the greater Houston area. They are very good at their pricing and having accurate comps.

@Rhyna Orillaneda Hi there, sorry the other guy was rude to you. A lot of people purchase properties with cash. Being leveraged in not necessarily better. Being leveraged allows you to do other things with the money that would be in the property. If you would feel more comfortable using cash to purchase, then you go ahead a do that and know that many other people do that also. There is no better way to do things. It all depends on what your goals are. Personally, I use financing, but I make sure that I find deals that meet my financing criteria when looking at purchasing. I don’t like to have a loan of more than about 50-60% of ARV after the repairs are done. Other people will tell you that you are wasting that money and that it is dead equity, but that is what makes me feel comfortable, so that is what I am going to do. I could do more deals if I was willing to be more leveraged, but all that results in is me losing more hair because I start to stress about it! Let us know how your deal goes buying with cash!

@Mike S. They are sitting longer. I know quite a few investors that are selling things off right now because prices are high and they are having trouble renting. I have a property that has a tenant paying below market rent but we are leaving her in there until we are ready to do a little updating on it to then sell it. No use kicking her out and having it stay vacant like all the other Butte properties.

@Michael D Morrow I agree with @Jason D. The Repeat R is very important to me. It is what makes the process really work. Other than that though, the deal seems like a decent situation. It’s just not a complete BRRRR.

@Rashad S. I agree with Brian about them probably being under qualified. I can get a complete flip done for $30/sf, but that would not include roof, foundation, HVAC, major electrical, or major plumbing. At that price though, I can be very hands off and know that the guys will get it done right (worked with them before). I can also get the same job done a lot cheaper, but i have to be there basically everyday because I am having to watch everything that happens to make sure it is done right. I am regularly adjusting what the workers are doing because they clearly are not fully capable. The more expensive route is worth it to me because i can spend time on getting the next deal and trusting my construction guys to get it done right.

@Jeremy Blevins Why stress? For the reasons stated above. The insurance companies are not going to cover anything if there is an issue. Your tenant that pays rent on time causes a fire with their lights or something like that and the insurance company tells you that your are SOL. To me, that is reason to stress about it. I personally don’t care if people want to grow or smoke, but it goes on the list of things that I am not comfortable occurring in my rentals.

@Devin Londo I am not in Chicago, but also work in a competitive market that has high property value increases every year. What we do is focus on the deals that work for us. It doesn’t matter to me if other people are just barely covering their operating expenses. Those are the people that I am going to be buying from in the future when they realize they had a bad deal at the time. We focus on staying true to what is a good deal for us and not deviating from that. I picked up a house on the weekend that will be at 54% of ARV after we do the repairs in a market where people say “you can’t find deals like that here”. So, I guess what we are doing in this market is finding and buying good deals.