All Forum Posts by: Tucker Cummings

@Jesse M.It's kind of a shame that it seems like most Real Estate Investors seem very uppity about investing. I've been noticing a lot of this lately... acting as if we're know-it-alls. In my mind, it seems like we would all be doing a disservice to ourselves not making an attempt to try to learn other investments. 

Also to your point, I guess it also never occurred to them to take the proceeds they made from a less risky investment like RE and put it into crypto. 

Just finished the "Bidding to Buy" book and would love to connect with somebody experienced in auction foreclosures. I'm trying to figure it all out for NC, but I'm quickly getting lost.

I'm having trouble finding properties that are going to auction, what date the properties are being sold, where they're being sold... pretty much everything involved in an auction lol. 

Are there any experienced NC auction investors that might be able to help?

@Adam Azam

Assuming all laws and regulations followed from the other posts, watch “Moneyball.” There’s a scene where they talk about having to fire their ball players, which is essentially the same thing we’re doing here. You’re firing from your tenant pool.

They would say something along the lines of “Bob, thanks for your time with the Oakland Athletics, were trading you to the Colorado Rockies. Karen in HR will Walk you Through the next steps.” Like tipping off a band aid.

With your tenants, send a quick email and just say, “Bob, thanks for submitting your application. Based on your criminal record (or insert other reason), you’ve been denied. Good luck on your next application.”

This isn’t something you should be spending a lot of time on.

I’m not a big bit coin or crypto believer, only because it’s still not proven and is still in speculative territory. I just think its hilarious that so many real estate investors are just immediately writing it off without any due diligence. I just can’t help but think back to when I was first getting into RE and friends and family said “you don’t want to get into real estate. I know someone who has a brother whose second cousin’s in-law got into real estate and all they dealt with was tenants, toilets and taxes.” Oh the irony and hypocrisy.

It’s a speculative play, so treat it as such. Aside from real estate, I’m planning on keeping 50% Cash to capitalize on buy opportunities, 40% Stocks (which is subdivided into 50% value/dividend stocks, 40% growth stocks, 10% speculative stocks), 10% Crypto. If it crashes and you lose 10%, you still have you’re 90% in more proven things. On the other hand, of crypto does what it says it can do, you’ll reap the reward.

Research, do your due diligence, identify and measure your risk to reward ratio, then manage your risk. All about risk management, just as you would with any other investment.

@Kuriakos Mellos

YES!! You can do this and it is exactly what my wife and I did with our home this past year. We bought our house in 2016 for 200k, with a no money down loan. It needed a lot of work and we didn't have funds to rehab it right away. Fast forward to 2020, our neighborhood has appreciated to where the house could be valued at 275k, but it needed the updates in order to do so.

Now we were making a bit more money and saved up, so we put 28k worth of work into it (kitchen, floors, paint, siding and more) and then refinanced at 278k. We got an 80% LTV for 222k. This paid off the 188k remaining from our first mortgage, repaid ourselves the 28k in repairs, and after closing costs we profited about 3k. The awesome part was that because interest rates have dropped so much, we ended up getting a lower monthly mortgage payment than on our first (only by about $15/month, but hey thats $180/year back in our pocket!).

So at the end of the day, we have a fully rehabbed, beautiful home, in a great neighborhood, that we have no money down to live in (except mortgage). In all honesty, we got lucky on this, because back then I didn't know anything about RE investing, BRRRR strategy, etc. If we were actually trying to get a good deal with a BRRRR, we probably would have bought something that we could have made a quicker and greater profit on.

Most of us can agree we would prefer to work with a RE agent, property manager, contractor, etc. that actually has experience in investing in real estate. The same goes for wholesalers. And let's get one thing straight, wholesaling is NOT investing in real estate. 

My experience has shown me that a lot of wholesalers have no idea how to value a property, what repairs would cost, and how much to assign a property for in order to make it a good deal for the investor. The best wholesalers I've seen are the ones that are primarily buy and hold rehabber or flipper, invest in property, and got a property under contract but for whatever reason they would prefer to assign it. Maybe the property just doesn't fit their criteria, maybe they already have too many projects going on or maybe it would just make more financial sense to assign the property.

Like many things in life, it seems like wholesaling is blown up as a "get rich quick" scheme, causing a flood of wannabe real estate investors to get in, who have zero intention/ability to get a property themselves.

@Ryan Copeland

The main difference between a HELOC and a conventional is that a conventional you owe money always, every month. With a HELOC, you only owe money when you actually draw down the credit line and use the funds. Otherwise, there is no outstanding balance that needs to be paid.

Same way as you don't owe anything on a credit card unless you actually use the card. So when I am not using the HELOC to purchase another property, I cash flow $950/month. However if I borrow money from my HELOC to purchase another property, ONLY THEN, do I owe anything to pay off. Which would drop my cash flow to about $400/month (assuming I draw down the credit line in its entirety).

So you really get the best of both worlds. You get better cash flow with the HELOC, and the money is always there. If I ever want to use the credit line to purchase a property, I just write a check from the HELOC.

Hard no to the course. Like others have said, way too many good resources for free to pay for a course.

The best way to get out there is ask questions and get educated. When I was starting out, I used to write down all the questions I had, then I would read, get on forums, look at YT vides, or just use critical thinking to figure out the answer. Sometimes though, the only way to learn an answer is by doing. Only way you can do is by jumping in.

My first BRRRR deal, I had no idea what I was doing. But because I was in the deal, it forced me to seek out answers, ask more questions, quickly seek out answers, ask more questions and so on. That accelerated my learning more than anything else I did.

The reason people have hesitation to jump in is not having answers to questions. Know that you're never going to have an answer to every question. Even @Brandon Turner and @David Greene say they're still learning new things on the podcast frequently. But the reason they and so many other investors are doing so well is because they're in the game.

Get out there. Get what's yours.

Lots of good points on this thread. I'm following for the experience, as I've run into the situation but never acted on the deal. Sounds like there are overall 2 paths. 1) Let it go because it might now be worth the trouble or 2) Be the problem solver.

If we entertain being the problem solver, sounds like you could move forward with the deal where you have the costs of lost rent, repairs and lawyer/court/eviction/etc. fees baked into the purchase price by knocking down the price. You could present the deal as "I'm going to take this problem off your hands, so you don't have to lose money on it anymore. In return, I'd like to negotiation the price to X." 

I think another factor we have to consider is how long it would take to recoup the investment. If you have deal that you might have to pay more for upfront in purchase and rehab, but you can refinance and recycle funds in 6 months, go with that one since it doesn't have the tenant issue and you can do another deal quickly. If on the other hand you have this deal, and there is uncertainty with how long it will take before you can recycle your funds, it may not be the best deal.

Hi Ryan, I chose the HELOC over conventional because I didn't owe anybody money. I didn't need to pay back an investor who helped me get the deal done. Also, this allows me to double my cash flow on the property when the HELOC is not in use. So overall, I was able to immediately recoup my funds that got the deal done, and maintained great cash flow. Usually a consequence of a BRRRR strategy is low cash flow, but BRRRRs strength comes in the volume of deals done. I got the best of both worlds.

Eventually what I will do is a conventional refinance and I'll transfer the equity into my primary home. I'll only do that once I have enough equity to fully pay off my primary residence, but I'll be able to take a HELOC out at 90% of my property value. So at that point, I'll drastically cut my expenses while increasing my obtainable funds further.