All Forum Posts by: Terra Padgett

Flipping, Wholesaling, Owning Rentals, Crypto, Stocks, etc. They ALL can, do, & have worked for many different types of investors. You'll hear lot of chatter about what "doesn't work" or what's "a better investment" for this or that; And maybe it is for some and maybe not for others. Investing isn't an Either Or sport, but rather a This And. Find what fits your desires, goals, or enjoyment levels and run with it. You might find success, you might find losses, you might find a lot of lessons learned. As long as you survive to see another chance at bat. 

My preferences are passive RE investments; whether through Debt, LP Equity stakes, etc. What are yours 🫵?

Retail has remained steady post-pandemic. Unlike it's buddy Office Building. Not sure what to attribute retail's survival to, especially with a lot of store closures, but the asset class does seem to have staying power. 

I've purchased one property with them before. Definitely inflated ARVs and I have no clue where they get their repair costs from. My estimates were much higher. This property in particular had some additional unforeseen costs (main water line damage, sewer line damage, etc.) that certainly caused us to go way over budget. Selling after the rehab was not an option. We were able to refi and pay private lender back, but no cash was able to be pulled out. So we are still holding the property and renting out for a few years and we'll see when the right time to exit will be. I'd say they have a consistent deal flow for you to look at, but certainly don't take the data they provide as your basis for buying/rehabbing/selling. Do your research independently to see if the deal pencils. Go walk the property yourself. 

You'll need a DP3 policy or a Dwelling Fire policy. Call a local insurance broker and tell them you need insurance for a rental property you own and they will be able to get you quotes for what you need. You should still always require the tenant to have renters insurance with liability coverage at a minimum. 

If you're using the HELOC for just the down payment portion on the investment property, then you'll likely need to fund the rest with private money or a HML and then re-fi out to conventional once you've renovated and rented. Conventional loans typically aren't for rehab projects, but rather for ready-to-rent or light cosmetic upgrades. They're for the long-term hold with the 30 year note. You'll pay back the HELOC once you've done your BRRRR refinance and then you'll only have your new Conventional loan left. You'll have to buy right to get either instant equity or forced appreciation so that you can pull some cash out during the re-fi to be able to use that for your next deal. I'd suggest you speak with some lenders and run your scenarios to see what the right strategy is for your particular deal.

Yes, if you have or obtain a HELOC you can use the funds for pretty much anything. So that could very well go towards an investment property. Be sure you have cash flow to pay the monthly payments on the HELOC until you're able to refinance out the new property. And depending on how you're buying, make sure you'll have enough equity to cash out the amount you'll need to pay back the HELOC.

This is the new FinCEN rule where you do have to report beneficial owners or those who have substantial control to the government watchdogs. However, from my understanding on this, it’s not a public database like a Secretary of State site, but rather only available to limited parties. There was a list of who those parties were; I believe it’s on that government’s website. My concern is if they have a data breach. With the government storing so much information, hackers are constantly trying to break through firewalls. 

Do NOT be bullied by tenants. You are the boss, not them. Unless the home is uninhabitable or poses an imminent danger to life, then confirm receipt of their work orders and provide applicable updates as soon as available. If rent is not received when normally due, then eviction proceedings will commence. It’s probably too late now, but I would add to renewal or future leases that appliances provided in the home are courtesy only and Landlord is not responsible for maintenance or repairs to them; then list such appliances.

You hear so much (I guess from the gurus and course sellers) about how “predictable” the cash flow is from rental properties. Well I adamantly disagree. You have a maintenance issue…unpredictable cash flow. Your insurance premium goes up…unpredictable cash flow. Tenant doesn’t pay their rent…unpredictable cash flow. And the list could go on. If you’re just getting started in rental properties, just beware that the cash flow is UNpredictable.