All Forum Posts by: Todd Rasmussen

@Osazee Edebiri

Where is dictated by how you want to invest and how much you have to place.

For me, 1 million dollars does better in TN than CA over 15 years. If there was substantially more to invest or I wanted to be more passive, then CA would be more appealing.

Quote from @Mohammed Milord:

Quote from @Todd Rasmussen:

Quote from @Mohammed Milord:

Hi everyone,

I'm trying to get started in real estate investing out of state. I was told that is hard to do using the Brrr method because you don't have anyone to check if the contractors are working on the repairs of the property correctly. Is this true? Should I give up on  Brrr investing if I want to invest Out of State?

 It is hard, but it is also doable. Whether or not you will be successful at it is up to you.

Our property manager checks on our contractors before they get checks released to them so we have additional eyes on things. Also, you can fly to anywhere in the country in a couple hours if needed. This is a very expensive supervision option and only works if you scale so you can check out multiple properties at once. Having your contractor and your property manager being different entities is important. As you are building your team, just have clear expectations and communicate about what you are looking for and you should be able to find a team that can provide adequate checks on each other.

 @Todd Rasmussen That's interesting. I was told by another investor, that property managers don't check on contractors, they only work on the property until after the construction is done. Is that true?

My property manager does it. As you are building your team, communicate what your needs are up front and see if it is a match. Some will say no, but some will do it. Just depends on the property manager. Starting out, you should look for an agent/property manager combination. That way working with you has added benefits prior to you scaling.

Quote from @Brian G.:

@Todd Rasmussen is this a Heloc on a rental property?

No it's a true revolving credit line secured by property though. 80% LTV 6.5% currently variable monthly 3 year term. Altra FCU, Wisconsin, TN, and a couple other non CA states.

Quote from @Mohammed Milord:

Hi everyone,

I'm trying to get started in real estate investing out of state. I was told that is hard to do using the Brrr method because you don't have anyone to check if the contractors are working on the repairs of the property correctly. Is this true? Should I give up on  Brrr investing if I want to invest Out of State?

 It is hard, but it is also doable. Whether or not you will be successful at it is up to you.

Our property manager checks on our contractors before they get checks released to them so we have additional eyes on things. Also, you can fly to anywhere in the country in a couple hours if needed. This is a very expensive supervision option and only works if you scale so you can check out multiple properties at once. Having your contractor and your property manager being different entities is important. As you are building your team, just have clear expectations and communicate about what you are looking for and you should be able to find a team that can provide adequate checks on each other.

Quote from @Jordan Ray:

Hey everyone!

Looking for recommendations on a company to obtain a HELOC with to use for rental property investing. Since it sounds like not all HELOCs are created equal what would you recommend for a HELOC to use for investing?

Thanks!

-Jordan

Elements FCU, out of Indiana did our HELOC in LA county. You don't want to describe the LOC's purpose as purchasing investing properties on you application though. You should use it as an emergency reserve as well as making home renovations. If you decide to use it for something different after you get it, that's a different story.

Quote from @Gloria C.:

Maybe I'm just out of touch with the current market, but I'm looking at a $245K property, putting down $61,000 (25%), have an above 800 credit score and my closing costs are $14,700+/-!  AND had to pay 3 pts to get a 6.125 interest rate....

I didn't really shop around due to urgency of having to make a decision, so I went with a highly reputable lender.

Sticker shock! Is this the new normal?  Hoping someone can make me feel better about this? Please be kind!

 What part of TN? I might have a lender resource that can do better. They just quoted me a commercial loc at 6.5%, so paying 3 points for 6.125 sounds like a ripoff to me...

@Charles Ownby

First of all, keep grinding. Even a setback is a sign of huge progress you've made.

Secondly if you truly have no ability to get a loan to fix the property, you could sell an option? The opportunity costs of having the property sit idle instead of rented might make up the difference on what would probably be a more expensive method of obtaining funds. Only you have enough information to determine if this is viable for you though.

@Corey M.

We love our military tenants. The properties that attract them are usually only vacant for a week or two between tenants. One time, we had vacancy of negative one week and had to refund the tenant that left.

The good news is in a few years inflation will do its thing and you'll barely remember what you currently viewing as a major issue. Suck it up, ride it out, keep track of your actual expenses and when it comes to deal #2 you'll be much better informed to buy at a price or on terms that allow you to cash flow on day 1. REI is a marathon not a sprint, it's okay that you are starting at a walk.

Also, when talking to any turnkey company you should trust but verify. In your case, asking to see examples of property listings they had showing for lease then using something like zillow's historical lease information to see how often they are really available for lease could have given you a little more objective information about lease lengths. May or may not have helped in this case, but the most informed offer is the most accurate offer so always try to check things like that, especially if it's a new market area for you personally.

@Jon Martin

Replacing interior doors with the panel style makes a big visual impact for not very much money.

Quote from @Jon Martin:

I'll start with one from personal experience . . . . First investment property I bought has a chain link fence around the yard that looked awful, as most do. Spray painted it black and now it looks exponentially better and almost new. 

Changing hardware on cabinets is an easy one. Also heard someone recommend painting white cabinets into darker colors. 

Curious to hear what others recommend!

I did this but used cold galvanizing compound, fence looked brand new!