All Forum Posts by: Tommy Bridwell

Well I was actually posting this to make sure I did it correctly. But yes, in the case that it is negative, it would be a better idea to sell then i believe.

Thanks for the response.

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Super helpful breakdown from both of you. Gonna research a lot more about doing something here locally and see if numbers can work out in my favor. Once you break it down and have a good strategy, it really starts to make sense. The only thing that I've been having trouble with is having to pay PMI since I'm not able to put down the 20% needed for a down payment. Have you found a way around making this work with a monthly payment thats not through the roof? Ultimately, I wouldn't be able to have a positive cashflow right away, but the mortgage payment would be slightly lower since I'm having my roommates help with that. So I can see the benefit in that aspect. Then again, I can always find someone to co-sign with, like Justin just mentioned lol. @Dan H. @Justin R.

@Jaysen Medhurst gotcha. I didn't do the BRRRR calc because I wasn't entirely sure of all the numbers needed to add in there. This was just a quick run up of something I saw. It may be more helpful if I actually tried to put more realistic numbers in there.

Thanks for the tips. I'll keep crunching those numbers and try to put better analyses in this forum.

@Jaysen Medhurst From the people I've had conversations with that have lumped their rehab costs into their loan, this is typically done with hard money lenders. I'm not sure if most conventional mortgages will cover this. Do you know if this is accurate? That being said, I'm sure each bank is different. So I will do my due diligence in asking that up front before jumping into that strategy.

@Justin R. Thank you for the response!

Are you suggesting that a large master bedroom can be converted into a separate unit, even though it's still inside the main property? I guess maybe that be considered a pseudo-duplex? As I mentioned to Dan above, I'm definitely going to look more into the rules and regulations of ADU's so that I know how to leverage them better. The great thing about real estate is that you can get as creative as you want with deals, and this is what gets me motivated to keep rolling along.

When you mention putting in the extra effort at the beginning, first thing that comes to mind is finding deals before they are made public. My guess is that my RE agent would be the person to put me in that situation, as they may hear of deals before they hit the market. Any other strategies you may have to get ahead of the curve?

Thanks.

@Dan H. Wow thanks for that detailed strategy breakdown. It took me some time to go through it and let it all digest.

As far as the ADU strategy, I've been hearing a ton of talks about that here in LA lately, even after posting this originally. That seems to be the route to take, if the opportunity presents itself. I'm sure a good book listing multiple strategies and regulations would be a good thing to buy right now.

As for investing in those cities that you mentioned, I may need to wait a while to raise some more capital, as the price markets are significantly higher than other places I'm looking. Do you suggest maybe starting in a smaller market and fine tuning my strategy before diving back into the lucrative world of REI that is California? Someone once told me, play to the strengths of the market that you buy property. I feel like CA is built more for long-term appreciation. I'll play around with the numbers a bit more and try to add realistic appreciation rates.

@Douglas Montgomery Thanks for the tip. I'll go back and see if I can play with the numbers a bit to reflect that. Also, the vacancy rate was just a general number that I've seen use on some of these calculations. Thanks for bringing that to my attention, as I believe you are right that its a bit low.

@Jaysen Medhurst I was counting on the loan covering the rehab portion of it as well as the financing for the house. From people that I've spoken to previously, they've had no issue with banks doing that? Maybe I was misinformed.

You make a lot of great points in this. This is just a ball park estimate for a property that I analyzed. The taxes and insurance were numbers straight from Redfin. Most of these other numbers would be fine tuned once I speak to my lender/agent about specifics. I'm more so focused on the calculator reflecting my initial strategy accurately, so that I can understand how to use it in the future on a property that I really want to focus on.

Thanks for the help. Any further help is greatly appreciated!

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Quick note, I notice in the Total Cash Needed box, that it's including my rehab costs in this. Is there a way to add the repair cost to the loan amount, since that is how I plan to finance the repairs? I feel this is taking away from my overall ROI since it's calculating that incorrectly. Thanks!

@Kamal Sharma

That's the point I'm trying to make. This would not be a property I would want to invest in. My original post stated that each property that I've ran through the calculator that is in my price range in Los Angeles does not seem to be a good deal, therefor I was wondering if I was looking in the wrong area or if I was neglecting certain info for this strategy.

@Nabil Suleiman

Thanks for the other suggestions. With adding an ADU, I'd probably have to have the building costs calculated into my loan as well correct? Which would leave me with less money for the original unit. But I see what you are saying about getting creative with add-ons. I'll try to explore other options as well. Thanks for the incite!