All Forum Posts by: Stephen Collins

@J Scott I agree that the numbers I provided had too large of a range, and the best thing I can do in the short term is hammer down the Big 3: target purchase price, accurate rehab cost, and true CMA/AVR. I have contacted a trusted realtor to work on determining the purchase price & AVR. After I will walk through with a GC to do the rehab costs.

I have seen the property, inside and out. It is about 10 minutes down the road from the house I purchased and live in. I am basing the price tag of the rehab, off things I have purchased for my home. I also agree if it sounds too good to be true, then it probably is. There is little to no disclosure, so maybe there is a big surprise. However  the real estate “climate” here is a night and day difference than let’s say Atlanta; there are less opportunities and less investors, but maybe this is one of those few good deals.

@Jon Holdman I have looked through the HML's list here on BP, have you worked with any in the past you recommend? I am not sure I understand your rule of thumb? I plugged in "my" general numbers just for an example. If the HML will give me 70% of the $125k AVR then I get from $87.5k. I then should be able to come up with 15% of the AVR to finish the rehab. Did I get that correct?

I have also thought about another Course of Action to do this independently. Rent my current house out, and self manage it to cover my mortgage+escrow+capex ect. AND then use some type of FHA 3.5% down to purchase the "rehab house" and live in it. I can then use my military BAH to cover the mortgage+escrow and some of the repairs. I'll fix the things I can and use the cash I have saved up to finish the rest over the next year or so. Then sell it, and move back to my primary residence. Hopefully this will generate some seed money for another project and be another learning experience.

All three of you have had great advice, about how to move forward. I think I have enough tasks at hand to stay busy, who knows keep an eye out for me in the marketplace maybe this will be an opportunity!

@Jon Holdman I have read many of your posts, thank you for all the advice. First let me say I am sorry for breaking the rules, I am not so much looking for someone to step forward to work with, as I am about a general strategy about how to meet the right people. To address some of your points:

I have prepared and rehearsed my "elevator speech" over and over. I talk with everyone I can. 

What do you think of the Credit Card Cash advance? Skimming through my junk mail that might be an option. Just to make sure I understand, I would used the 10-15k Cash Advance, 5k personal cash, and the remaining 80% from a HML?

Other than that I only see borrowing money from family as a viable option.

I have heard every good deal gets funded. I think I have identified a solid, rehab & flip, in my local neighborhood community. It is a foreclosure listed for 80k, with an ARV of easily 125K+ , I am still working the Comps. but similar homes have sold for 160k in the same neighborhood in the last year. Minor cosmetic repairs are needed, floors and paint, and maybe some new appliances, all together off hand maybe 10K in rehab. It is sitting in the best school district, and is "newer" construction being built in the early 2000's.

My question is how do I find a partner to tackle this rehab with!? In all honesty this is something I would do on my own but I am a Service Member, who just bought their first house and is newly married. I HAVE TIME, but I only have about 5k cash to play with right now which obviously isn't enough. I can put "skin in the game" but am struggling to find a partner. My town is inactive, and there are no REI meetings locally. I am waving the flag looking for some help, guidance, or just plain advice.

If I cannot find someone to work with I might beg borrow or steal some money from family and sell my soul to the devil and work with a HML.

@Christina Phillips and @Darrin Mayfield I too would like to meet up in the Columbus area.

Good luck @Brandon Proctor . By no means am I an experienced investor, but I did just use my first VA loan last year. I think others have made some great comments, such as needing to meet requirements. It was hard for me to find a solid multifamily that had a unit open for me to move into, so I found a nice SFR for my wife and I. Not to state the obvious but the realtor made all the difference. If it's a not a good fit I would find someone who can better represent your needs. Also I love USAA, but they did take slightly longer to close than other lenders, just FYI.

I am a United States Service Member, and have a Soldier friend who is leaving the Army and wishes to sell his house so he can move back closer to his family. He has made a “half-attempt” to sell the house but as of now still owns it, and doesn't want the headache of renting it. He realizes that if he doesn't sell the house, he will be stuck here and can’t move back home. I made him a casual offer and wonder how I can legally do the following to purchase the property as a rental/investment property.

Transfer the title to a third party. Give my friend X number of dollars each month for the remainder of the mortgage (apx 28 out of 30 more years). He continues to the pay mortgage every month. When the mortgage is paid off/all payments have been made the title is transferred into my name. If I fail to make Y number of payments the title is transferred back into his name and I forfeit the money already paid. My payment of X is about 80% of the mortgage and escrow payment each month so my friend would still be on the hook for the other 20% each month. If my friend fails to make Z number of payments to Wells Fargo I would have some “option” to step in and continue making payments and transfer the title into my name immediately (to then sell the house and cash in on any equity and just dump it).

The motivation to do the following is about a $375 difference between my X payment and the rent collected. Of course I need to factor in all my expenses but all in all I am expecting the house to be financially self-sufficient. In addition, since this isn't an official mortgage it doesn’t saturate my debt/income ratio freeing me up to finance additional properties through conventional means later.

Thank you everyone for all the information. The support on here just goes to show how awesome of a community BP is!

@Brandon Hicks I have reread your postings over and over, and ran an infinite number of google searches trying to learn about your deals. First off I am very impressed, my hat is off to you. I am a service member and unfortunately mission tempo is rampant right now. Would you mind if I sent you a request and PM you when I am back?

@Don Konipol my personal goal is to buy and hold a rental portfolio. In my local area I am typically finding deals in the 8-9% Cap Rate range. What do you think, is this is an “average good deal”?

@Ned Carey I completely agree, my personal thought is I can let a 100 good deals go but I cant afford to get involved in 1 bad deal. Your second point hurts, my “partner” just backed out and got cold feet.

How do the pros acquire so many properties in such a short amount of time? I listen to the BP podcasts and the guests are always talking about growing 5-10+ units a year. I bought my first house in 2013, and am looking for an investment property in the ATL area. I am worried though that after I finance this second property I will have such a high debt/income ratio that I’ll be stuck paying cash for any additional units, and that I may no longer have cash on hand due to any rehabs. How do you guys grow so quickly?

Thank you, all advice is appreciated!

-Stephen C.

@Account Closed great idea adding the third color! I need to paint my house this summer and am going to give this a go. I agree perception is so powerful.

@Sharad M. Thank you, we all appreciate that!

I'll have check out Lake County. Would you still invest in that area if you knew work was going to move you next year? I assume you feel comfortable there and have built up a solid reputation, all the more reasons to stay. What markets outside of your city would you consider?

I have great job security. I budget my paycheck and save my pennies for a down payment. I am trying to build a nest egg of buy and hold rentals for when I retire.