All Forum Posts by: Walter Key

@Jeremy Corcoran Is the long-term tenant that you have ready to move out? Have you changed the rent in the last 4 years? 

In addition to what has already been recommended, you need to think about what YOU want to do here. You certainly have options. If you haven't raised the rent in 4 years, there's a very good chance you're renting for well below market rents. A good Realtor can tell you market rent for your house in your area. From there, you can decide if you want to raise the rent and pocket more cashflow, refinance to pull cash out for future investments, sell the house and move on completely, etc.

Any way you slice it, you're in a pretty good spot. Best of luck!

@Dan Wynn As Active Duty Navy (16.5 years now) I share your sentiment on the positive and negative effects of military life on our investing businesses. I've recently relocated to the Jax area after being gone for quite some time (grew up in Orange Park back in the 90's). 

If you'd like, shoot me a quick colleague request. I'll be happy to share the information I've gathered thus far (contractor recommendations, hard money lenders in FL, etc). Happy to help a fellow veteran investor.

Yes. If you're planning to make the property your primary residence, you can use FHA. Do a search on BP for "FHA House Hack" and you'll get lots of posts about this same subject.

@Todd Fithian @Matthew A.

The reason I said to throw the 50% rule out the window is because there are now hard numbers to work with. The 50% rule is a "rule of thumb". Just like the 70% rule for flips, the 2% rule for rentals, etc. All these "rules of thumb" are fine to take a quick snapshot analysis of a potential deal but they are by no means concrete. For example, even in the same location, insurance can vary widely based on age, sex, the company involved, any past claims, deductibles, etc etc. That's just one quick example. 

It's always better to run the actual numbers or at least a very close estimate on the numbers based on your particular location, situation, etc.

Throw the 50% rule out the window. You know what your fixed costs are; factor in vacancy rate (8%-10%), 10% for CAPEX, 10% for maintenance and 10% for management (unless you're doing it yourself). Throw all those number into some basic math and see where you end up.

@David Chwaszczewski Thanks for the tip. I will definitely look into that. Do most asset based lenders require significant equity in the assets?

So once again I find myself seeking the keen wisdom of the BP brain trust. :D

I currently have four properties all financed with conventional financing through my credit union. Three are current single family rentals and one is my primary residence. I just moved a few months ago so cash is in short supply and credit is a bit low from the current mortgage for the new residence.

I intend to build back up my capital reserves by flipping some rehab properties in North FL where I currently reside. I have a little equity in one of the investment properties in NE (none in the primary at the moment) that I intend to use for a HELOC to build up the capital for the first few deals. However...

Since I already have four mortgages through my trusty ole credit union plus the pending HELOC, I'm pretty much tapped out on conventional financing for a bit. Besides, conventional doesn't make much since for flips anyway.

So, what does the collective brain trust recommend? Private Money? Rehab loan through a small local bank? An Equity Partnership? Hard Money? I'm looking at rehabs with an initial purchase price between $50K-$150K and I'll have enough in the HELOC for 20% down.

I'd love to hear what those that have been in a similar situation have done and how it worked out for you or what the seasoned investors out there suggest based on past experiences.

Thanks much!

@Mitch Borgen Offer $230K. If you really don't want to wait on a counter, specifically state in the offer that this is your Best and Final offer. Best of luck.

Need more info here. Is $269 fair market value? Is this a retail sale, REO, shortsale, etc? What condition is it in? How much rehab cost do you expect if it's needing rehab?

There's always risk in investing. The goal is to mitigate that risk by properly budgeting and analyzing the deal(s) before hand to ensure they're profitable then setting aside capital reserves (or putting other mechanisms in place) to mitigate any major economic downturn or large expense.