All Forum Posts by: Ryan Howell

I wouldn't even consider this question until you've done your first deal or two. After that, you can weigh the pros and cons. Im in NC, I'm licensed and I do BRRRRs...I did 5 deals or so before getting my license and only have it because I decided to be a full time agent. There are some advantages and disadvantages and TX may be different than NC. Also in NC my costs are ~$4k per year to be actively licensed and pay all dues, MLS fees, etc.

My $0.02 is there are a million questions people try to wade through before buying their first deal and it tends to prevent action (not saying that is the case, but it very common for people).  If you haven't yet bought a property, I would focus solely on that task first.  Your knowledge will grow 10x afterwards.  

If you've got a few properties and are still wanting to pursue real estate, then my answer is that its not worth it, unless you want to be an agent as well.  The time is better spent finding deals and building relationships with others in real estate.  

I would likely go with 30 year.....My opinion is inflation is rising and so will interest rates.  I'd rather be higher, but know my rate is secure.  I also only use HELOCs for short term....6mo at a time.  For 6 months at a time, this is a max $720 decision between the 5yr and 30y rate.  That seems like a fair price to insure yourself against inflation or rising interest rates.

I've never had issues with insuring investment properties in an LLC. If you are a homeowner, I don't believe you are supposed to own it in an LLC (not an expert on this), so you may have issues if you are living there, but Foremost, State Auto, etc will all insure investment property. I would find a good broker in your area as they can get you the correct type of policy for adequate coverage, etc.

@Charles Weaver - Similar to my story. I would BRRRR going forward, so you don't have to wait and save. If you BRRRR you can go much faster and are only limited by your reserves that you can save up and seasoning periods. Whether or not you refi what you have is up to you and your risk tolerance. I would keep buying 2-4 units until you max out your DTI and then switch to looking at larger units as well (take advantage of the low interest loans while you can and build a track record for commercial lenders). I'm not a fan of doing a 1031 into a larger apartment because I like spreading out my risk and not putting everything into one deal.

Also, consider finding partners.  I partnered with a guy from BP on a deal this year and it has gone very well.  I was very skeptical of partnerships, but now I'm a big fan.  

@Agustin Conti - You likely will need a different PM for Maggie Valley / Bryson City compared to Brevard.  You can check out Ron Mashburn at 

www.wncvacationguide.com

@Steve Adler - I would say it depends. If those numbers are real, then it could be a great deal, but you need to be sure those numbers are good. I'd get it under contract and get some seasoned investors to look at it with you. You do need plenty of reserves. It looks like to me it likely would cash flow even with significant additional rehab costs, but only if you have the money to put into it. As far as the value, if you're buying on a commercial loan, they likely will lend on the rehab. On my recent purchase they lent 75% of the rehab costs and did an ARV appraisal to estimate value after it was completed.

@Charles Akinmade - I can hopefully provide some insight for you.  @Greg Moore's guidance is a good starting point.  Asheville city has a restriction against STRs, requiring a Homestay permit (basically you have to live there).  I see clients that are very profitable with 2 bedrooms but it depends on the location.  You need to decide what type of client you want to attract.  Many go after the "mountain experience" and go to areas like Maggie Valley, Brevard, Black Mountain, etc that are still relatively close to Asheville.  I also see demand for 4+ bedroom options for larger groups who are coming specifically for Asheville.  I think in general, the more you can sleep the better.

It's assuming you aren't getting any rent during the rehab I think.  You have 6 months for the rehab and year 1 rents are ~half what they should be.  

My answer is..."it depends".  You need to really understand the structural damage.  I would get an engineer to look at it.  If the numbers are correct, it could be a good deal.  Personally, I like lighter rehabs where I keep my rehab costs as ~<20-25% of the purchase price.  I don't see this talked about a lot, but if I buy a $100k property that needs $20k and I'm off on my estimate my 50% than I can generally be fine at $130k "all in" instead of $120k.  If I buy a property for $30k that needs $100k and I'm off 50%, I'm in trouble.  My point is that there are always unknowns and even more unknowns on your first one.  One way to limit your risk is to limit the scope of your rehabs.  I also look at a "sensitivity study" on my assumptions.  If my rents are off x% what happens?  What about if my rehab is off x%?  What about expenses, vacancy, etc?  Nothing will ever go quite as planned and your deal needs to protect for some contingencies.

Hey guys, I've noticed that there seem to be a lot of "lenders" that claim they can do no-doc/non-QM loans.  This area of lending seems to be full of scammers trying to get a high fee up front, which I've found to be one red flag.  Many tell me that an NMLS ID is not required.  I'm really curious what the actual rules are.  I've not had much luck finding details on licensing requirements.  For reference, I'm in NC.  So far, I've stayed with the bigger, national companies for my loans, but I'd love to have a better way to vet these potential lenders, because I'm sure there probably are some good ones that could be a great partner going forward.  Any advice?