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All Forum Posts by: Steven Barr

Steven Barr has started 87 posts and replied 162 times.

Post: How much of your cash flow should you live off of?

Steven BarrPosted
  • Atlanta, GA
  • Posts 163
  • Votes 57

How much of your rental property cashflow should you live off of? 

For example, if I cashflow around $30k/month, how much of that should I ACTUALLY be spending on my lifestyle? What percentage should go towards my personal mortgage, toys, travel, etc..

Further, I wouldn't want to develop spending habits that had me on razor thin margins, so what should my OVERALL spending percentage be relative to my cashflow? 50%? 70%? 80%?

I understand the goal is to work to continually increase your cashflow by acquiring more properties over time, and that annual rent increases will give you a natural boost, but I imagine you want some cushion built in to your spending habits for inevitable bad times economically?

Thanks! 

Post: Best National Bank to Use?

Steven BarrPosted
  • Atlanta, GA
  • Posts 163
  • Votes 57

Do y'all have any recommendations for most RE friendly bank to use? I would like to be using a big name bank with branches everywhere like Bank of America, Wells Fargo, etc. I am using a large bank right now, and I won't mention their name, but they are a NIGHTMARE. Leaning towards switch to BoA or Wells Fargo, but wanted to see if anyone had experience with them or possibly a better suggestion?

Ex (quick money movement, low fees, great service and communication, ability to be reached, online wires) 

I should also add that I don't need them to have great loan terms or RE products. I am simply looking for ease of use in transactional purposes like checking, wires, and personal distributions.

Thanks so much!

Post: How do you guys manage cashflow from a banking perspective?

Steven BarrPosted
  • Atlanta, GA
  • Posts 163
  • Votes 57

There's all these formulas for calculating expenses and backing in to cashflow, right? How do you guys manage this operationally? 

In reality, rent will hit your bank account, but it doesn't separate itself into specific categories. Do you shuffle your estimated capex and opex to a separate savings account? Or do you just let it all sit in one checking account, and then only take a small portion of it as a distribution if you want cashflow?

Post: Rehab Only loans for BRRRR

Steven BarrPosted
  • Atlanta, GA
  • Posts 163
  • Votes 57

I am looking to use conventional 20% down financing to purchase a home. Is it possible/are there places to allow you to take out loans for just the rehab portion of the deal?

We just tried to put in a cash offer on a house, only to find out that our hard money loan could not be consider a ‘cash offer’. 

My question is twofold… 

1. Is this normal?

2. If this is normal, why in the world would anyone use hard money and pay the points, fees, and high interest instead of just using conventional financing?

Do y’all make your renters show proof of renters insurance before you will allow them to rent your properties?

Quote from @Ron Brady:

Like @James Alderman, we use 10% of rental income across our portfolio. Though we BRRRR, we purchase used appliances and keep existing roofs, furnaces, water heaters etc. unless they are clearly end of life. Across our portfolio, to date, we've needed this 10% to make minor and major repairs/replacements.

@Ron Brady and @James Alderman is 10% what you are using for maintenance/repairs AND capex? Or just maintenance and repairs?

I plan to sell these properties within a few years after BRRRRing them, so not sure I should really be modeling capex, as those items will be addressed in the rehab? Curious to hear your thoughts on that

How are y'all calculating your projected maintenance expenses for BRRRR properties?

I know the rule of thumb for a traditional rental is 40-50% all in expenses (vacancy, prop mgmt, taxes, ins, repairs, CapEx, etc)..

But are y’all using a lower maintenance/repair rate due to the fact that the property was recently rehabbed? If so, what all in expense number are you using for calculations?

Will you buy properties on septic? Specifically using the BRRRR strategy?

Post: Using Ribbon for cash offers

Steven BarrPosted
  • Atlanta, GA
  • Posts 163
  • Votes 57
Quote from @Karen Johnson:

Did you end up using this program? If yes, what was their experience like? I have a friend considering using it in North Carolina.

@Karen Johnson we never ended up going through with Ribbon. Had to change our strategy given the current market conditions. They were also primarily SFH focused