All Forum Posts by: Patrick Sittenauer

@Brandon S. Pangman

Yes to tile throughout minus beds. Also, the longer the tile, the more authentic it looks. I’ve noticed shorter tiles (<36”) look like tile, so I’ve gone with 36” tiles. If you do that with ultra thin grout lines, it looks very close to a real wood floor, especially in pictures. It won’t feel like it, but it makes the house feel nicer.

Just make sure that whoever is doing it, if it’s on a subfloor that the trusses are strong enough to support the weight. A good contractor should know what codes say. I don’t have that problem because Oklahoma is on slab, but something to consider if you have a basement or a second floor.

@Tom Adams

I think you should. But let's clear up some assumptions. I'm assuming when you say you have 750k in equity, that is how much you can actually access. If the house is worth $1,071,428 or less, then you can access 100% of that equity. Most banks will lend up to 70% LTV (more depending on the bank and your relationship), but for now let's stick with 70%. However, if the property is worth $2M, and you have $750k in equity, then you still have a loan for $1.25M. In this case, the most you could actually tap into is $2M * 70% - $1.25M = $150k, not $750k.

For now let’s assume you can tap 100% of that equity. Here are a few options and considerations.

1) Cash out Refi and buy an apartment complex. This is a quick way to build your door count quickly. 750k as a 30% downpayment would mean you could buy a complex worth up to 2.5M. There are plenty of opportunities in that range. Make sure you have a property manager if you go this route if you want it to be a passive investment.

2) Cash out Refi and buy 12 SFHs worth, on average, 200k with a 30% downpayment on each. And you’lll still have a small reserve of 30k.

3) Get a line of credit and buy a fixer upper using the BRRRR method, and when you refinance, pay of the line of credit and then go do it again.

@Brandon S. Pangman

While you might not see the ROI "balling out", it will probably get you a higher appraisal. In the short term that doesn't mean much other than a lower ROI, but in the long term, that means you can leverage later in a Refi, HELOC, or Portfolio LoC.

Plus, if you ever have to sell, your house will be more competitive in that neighborhood, ie sell faster and for more. Personally, I renovate all of my non-low income houses with nice kitchens for these reasons.

Between the two options you’ve provided, I’m torn. I tend towards quartz due to lower maintenance costs, however, it can be damaged by hot pans. I didn’t know this until recently so a renter may also not know that and set a hot pan down thinking it’s safe to do so like on granite. Quartz in my area is also cheaper. I think I’ll still stick with quartz but it’s not one definitely over another.

I apply this same principle to flooring and get rid of all carpets in a reno and replace with wood look tile floors. The cost is higher, but the maintenance costs are lower and tile is much more durable.

@Jesse Flores

Instead of taking a loan, perhaps consider rolling your retirement account into a Self Directed Retirement Account that owns an LLC. All that money would now be available for you to use for deals, and your cash would be untouched and useable. Here is a link for informational purposes:

https://www.irafinancialgroup.com/learn-more/self-directed-ira/what-is-a-self-directed-ira-llc/

@Joe Splitrock

This is exactly what I would recommend. If you don't already have an LLC, do that, then purchase using commercial loan.

@Michael Ralston

My first recommendation would be to determine your niche, and then build your core team. If rentals are in your plans, find a quality property manager. This means interviewing several and find one who sees most eye to eye with you. Then you will need to find a contractor(s) that can do good work. Make sure they are licensed and insured, preferably with a good Google or BBB rating. Then find the rest of your team: bank(s)/lender(s), real estate agent, CPA, and lawyer. Having this team in place will put you well on your way to success!

@Chai Jonn

Hi Chai!

Personally, I prefer to invest where I would want to live (near good schools). So Yukon, Mustang, SW OKC/Moore, Edmond.

Within that subset, I look for properties that need countertops and flooring at a minimum, then I finish with wood looking tile and quartz countertops. Both look great, but more importantly they are super durable. My two properties that fall in that category both have smaller turnovers and have deposits within 1-5 days of listing.

The initial investment may be greater, but I have lower turnover costs and very short vacancies.

Not sure if this is still an issue, but I work for Home Performance Group out of Kearney. Without looking at it, I can’t tell you how much it’ll cost, but we would be more than happy to take a look at it and give you an estimate.

@Sean Morrison I currently own properties in a disregarded LLC. Would I be selling a certain ownership percentage of that LLC to another, which is wholly owned by the passive/silent investors?

@Tom Ott

Thanks for the reply. So no issue soliciting from non family non friends with 506(b)? Once I have a fund, do we establish an LLC owned by that fund in order to conduct business? And I assume it would be a disregarded LLC? Thanks again!