All Forum Posts by: Tchaka Owen
Tchaka Owen has started 3 posts and replied 933 times.
Post: Should I buy with my HELOC or a mortgage?
- Real Estate Agent
- Merritt Island, FL
- Posts 966
- Votes 1,144
Hi Sunny, if truly a BRRRR, then use your HELOC to purchase and improve. Why? Because it will have the effect of buying cash which will result in lower closing costs as well as faster closing. The $2k-ish you'll save will probably pay the interest on the HELOC through the renovation time. At that point you refi into a normal loan and your HELOC is back to "unused". Good luck!
Post: [Calc Review] Help me analyze this deal
- Real Estate Agent
- Merritt Island, FL
- Posts 966
- Votes 1,144
@Gary David - several comments:
1. Your closing costs will be much higher, figure on $5000. Not a big deal, but keep that in mind.
2. Vacancy is 3%, raise that to 5% minimum, maybe even 8%. CapEx is 5%. If that's place was built in 1940 and hasn't had significant updates, perhaps 7% or 8% is better.
3. Are you managing? There's no evidence of Property Management fees.
4. You state that tenants pay their own electricity. Who pays water/sewer?
In the end, your cash flow will be $647/mo. Depending on the management issue, you could be looking as high as $550/mo or as low as $400/mo. Either way, you're still doing well.
Post: How to loose 30k on flipping in Columbus Ohio warning to Newbie
- Real Estate Agent
- Merritt Island, FL
- Posts 966
- Votes 1,144
Originally posted by @David S.:
Originally posted by @Tchaka Owen:
Originally posted by @Gaby Liu:
Originally posted by @Todd Pultz:
@Gaby Liu I understand your frustrated, but a lot of people have partners and have a lot of success. You have to choose the right partner, do your due diligence and ensure partnerships are vetted through an attorney. You also need to choose partners that compliment you and are as invested in the deal as you are. I’ve partnered on many deals that were all successful and easy enough. My current partner however was in your shoes before him and I met. It took awhile to find someone I enjoyed working with that I trusted but you can do it as evidenced by many other investors.
Don’t let one deal jade you! True investors have had conquer some hurdles in their career but it is the bounce back that’s so important!
the one who don't spend money would vote the partnership of course, the fisher. the one who spend the money on the partnership are the fish. would you partner with someone that you pay the money and he don't. but 50% /50% ownership?
Yes. However, that's not what you did. You set it up as a 33.3%/33.3%/33.3%
If I read the original post correctly, the original deal was set up as Gabi and her friend Reni providing all of the cash to finance the purchase of a property to be rehabbed and flipped. S got 1% of the equity for finding the property and she and the original contractor (R) would get 66% of the profit for doing the rehab and selling the property...I am not sure if the second arrangement after they booted out the first contractor R would leave S with only 1/3 of the profit.
Whatever the profit arrangement was, I think @Gabi Liu's advice in the end was not to partner with anyone who does not put in cash in the project in return for a piece of the profit (50% in her last example).
Nope, it's written that she and Rene would own 99% of the company and S would own 1%. As far as profits go, S & R would get 66.7%, she and Rene would get 33%. THAT is a problem. While there's no one way to structure a deal, the traditional route when one provides all financing and the other does all work, is 50/50. You can deviate, but to go that far is not what most would term "fair".
And yes, her point is clear. While many feel that way, to me it's not what's most important. Having a trusted partner, an extra set of eyes OR making visits to see progress is more likely to yield success as work will not deviate far from amount of allocated funds.
Post: How to loose 30k on flipping in Columbus Ohio warning to Newbie
- Real Estate Agent
- Merritt Island, FL
- Posts 966
- Votes 1,144
Originally posted by @Gaby Liu:
Originally posted by @Todd Pultz:
@Gaby Liu I understand your frustrated, but a lot of people have partners and have a lot of success. You have to choose the right partner, do your due diligence and ensure partnerships are vetted through an attorney. You also need to choose partners that compliment you and are as invested in the deal as you are. I’ve partnered on many deals that were all successful and easy enough. My current partner however was in your shoes before him and I met. It took awhile to find someone I enjoyed working with that I trusted but you can do it as evidenced by many other investors.
Don’t let one deal jade you! True investors have had conquer some hurdles in their career but it is the bounce back that’s so important!
the one who don't spend money would vote the partnership of course, the fisher. the one who spend the money on the partnership are the fish. would you partner with someone that you pay the money and he don't. but 50% /50% ownership?
Yes. However, that's not what you did. You set it up as a 33.3%/33.3%/33.3%
Post: [Calc Review] CoC ROI - 54%?
- Real Estate Agent
- Merritt Island, FL
- Posts 966
- Votes 1,144
Originally posted by @Tashina Taylor:
Originally posted by @Tchaka Owen:
Originally posted by @Karen O.:
Were I in your shoes with an alternative housing option, outstanding debts, and no crystal ball telling me the mkt will continue to appreciate, I'd sell it.
Figure out what the planned improvements will add to today's FMV. If more than cost, decide if you have time to get updates done quickly. If not, sell as is while the mkt is hot.
Use the proceeds for debt payoff and current living expenses if necessary. What you don't need, set aside for future investment.
There will be opportunities in the future to buy another rental.
Strongly disagree.
Whether the market goes up or down is missing the golden goose in front of you: rents will (much) more than cover mortgage. Which means that regardless of what the market does, she continues to get the mortgage paid and positive cashflow to cover the accrued debts. It's like Kiyosaki 101.
I think you should look into the dynamics of a boom and bust town before making the golden goose claim.
I think you should look at your own writing: "Because of this, I feel like I could guarantee the rental asking price" so that readers don't scratch their heads when you later write counter to earlier script. If you couldn't guarantee rents, the solution(s) could easily change.
Post: Wholesaling Properties from the MLS
- Real Estate Agent
- Merritt Island, FL
- Posts 966
- Votes 1,144
People have been doing this for years.
Start by learning and understanding what "wholesaling" entails. Then read over your standard local real estate sales & purchase contracts in order to be familiar with them.
Post: Another one Down! Miami Flip in the Bag!
- Real Estate Agent
- Merritt Island, FL
- Posts 966
- Votes 1,144
@Jason Brown - fantastic job! How did you find the seller? When I first moved to Miami at the end of 2004, I used to get my hair cut about a block west of 95 on 62nd. Back then no one wanted to be in Liberty City. You'd be lucky to sell a home for even $120k. Things have changed so much!
Also, brag about your true profit....gross (before closing costs and commissions) is what TV flippers do to make numbers look bigger.....so if you made $100k after everything, wonderful! No shame in that. Thank you for sharing.
Post: [Calc Review] CoC ROI - 54%?
- Real Estate Agent
- Merritt Island, FL
- Posts 966
- Votes 1,144
Originally posted by @Karen O.:
Were I in your shoes with an alternative housing option, outstanding debts, and no crystal ball telling me the mkt will continue to appreciate, I'd sell it.
Figure out what the planned improvements will add to today's FMV. If more than cost, decide if you have time to get updates done quickly. If not, sell as is while the mkt is hot.
Use the proceeds for debt payoff and current living expenses if necessary. What you don't need, set aside for future investment.
There will be opportunities in the future to buy another rental.
Strongly disagree.
Whether the market goes up or down is missing the golden goose in front of you: rents will (much) more than cover mortgage. Which means that regardless of what the market does, she continues to get the mortgage paid and positive cashflow to cover the accrued debts. It's like Kiyosaki 101.
Post: Getting started in real estate
- Real Estate Agent
- Merritt Island, FL
- Posts 966
- Votes 1,144
@Mitch Wilmer - if you're not sure, then pass on the deal. Then spend the next 6 months reading as much as you can on BP, listen to podcasts and ask questions. That way when a good deal comes your way Spring 2021, you'll be all over it. You don't want to take on a project unless you have some confidence going in. You don't have to be super-confident about all aspects, but a tad is important.
Post: [Calc Review] CoC ROI - 54%?
- Real Estate Agent
- Merritt Island, FL
- Posts 966
- Votes 1,144
i) there wasn't any mention of a special mortgage that does not allow you to rent out your house. What would I do? Rent the house out. One of three things will happen: a) you'll have rental income and will then be able to refi, b) you'll get caught by the state and they'll force you to refi immediately if you don't want to be in trouble (ooooooh!), or c) nothing will happen and they'll never even know. The best and most likely option is "a". I like to play by the rules so I would refi as soon as a lender allows. But if getting there means renting it, that's what will happen.
ii) perhaps I should have termed it differently. The rent that you're not paying is what I counted towards monies available to pay off your debts.