All Forum Posts by: William Sullivan

Hey All,

I'm considering a house hack on a duplex, but I'm seeing various articles stating that conventional rentals no longer work.  E.g. https://www.biggerpockets.com/...

I made  few offers back before the pandemic, and I was ready to pull the trigger on a small flip, but I lost the bid.  I've been paying rent the past two years, and I'd like to save a bit of money with 203k loan + house hack.

Is this at all still a reasonable / relevant strategy in 2022? I've been out of the loop for so long and seeing so much about short-term rentals (STR) that I question all of my prior knowledge.

Thank you!

Will

 Thanks for reaching out Kevin, much appreciated!

Hi All,

I'm interested in purchasing a property in Tolland County, CT.  It's a 1070 sq.ft. 2-story home (photos attached).

All utilities are functional and city municipal: electric, water, sewer, and gas heat.

Here's my cost analysis / scope of work:  https://docs.google.com/spread...

Acquisition:  -$33k

Rehab:  -$44.8k

Closing:  -$1.4k

Holding:  -$4.4k

Sale:  -$10.5k

Total Cost:  -$94k

All-In Cash Cost:  -$83.6k (does not include sale costs deducted from proceeds)

ARV: $115k

Profit:  $21k

All-In Cash Cost / ARV: 72.3% (just above the 70% rule, but I'm also living here)

My first first goal is to find a new place to live.  I'd be moving in and doing most of the work myself (as broken down in the spreadsheet above).  I understand it's not a long-term, scalable strategy, and I'll essentially be making close to $20 / hr... but my hope is that the experience will be worth the opportunity cost.  I'm a software developer by day, and I'm looking forward to physical labor.

I'd prefer to target higher value deals with larger upside and lower cost / sq.ft. but the barrier to entry is pushing me back down. I've considered hard-money for a larger deal, but doing cash for the first deal feels more my pace. I've also considered 203k / FHA, but because I've been contracting less than 2 years, I need to wait until next year.

I'm planning to sell, but I was considering renting as a secondary exit strategy. At that point, I should qualify for conventional loan products. At $1.1k / mo rent, 50% of which go to expenses, I'm left with $550 / mo before PITI. Assuming a cash-out refinance at 70% LTV, I'll pull out $80.5k, which is most of my initial investment. Then, with a 3.5% 30-year note, I'm looking at $362 Monthly PI, $235 Monthly Tax, and $125 Monthly Insurance. This means I'd be operating at a loss of $172 / mo. So, I'm not planning to pursue this exit strategy.

Just looking for general opinions on this project proposal.

Thank You!

One of my agents just told me:

"Most people that rehab houses are contractors, they’re not going to hire contractors.  Because, if it were that good, don’t you think a contractor would just do it?”

In my opinion, the physical renovations are just one element of a larger problem.  I can network and find great contractors at non-retail rates without being a contractor myself.  My margins might be smaller, but I'm free to focus on volume and improving the efficiency of my investments.

Have any other new investors faced similar criticism?  What have you done to overcome the negativity that comes with making low offers?

Hi All,

I'm looking for general advice about investing, specifically flipping in the areas surrounding Foxboro, MA.  I'm especially interested in the lower barrier surrounding towns like Millville, Woonsocket, Taunton, etc...

My working plan is to do a small flip 1000 - 1300 sq. ft. with a hard-money loan. I have capital saved, and I'd look to either flip or BRRRR. I'm avoiding turn-key because I'd like to recycle the money asap.

I'm considering working with a partner, so finding like-minded investors in the area is a high priority.  I've checked "Meetup", and I see a few Boston area real estate meetings.

Does anyone know of additional real estate meetings in the area?

Thank you!

Will

Hi All,

I'm interested in Jacksonville, FL and I have a few questions:

1.  Is this market oversaturated in 2019?  I've heard A LOT about Jacksonville over the past 1-2 years..

2. Do you have any advice regarding BRRRR strategy implementation for remote investors in this area?

3.  Any general advice about Jacksonville investing?  Good areas, bad areas, team building, weather issues, etc...  I'll be doing research myself, but wondering if anyone has a lesser known nugget of wisdom.

Best,

Will

Hi All,

My girlfriend and I live in an apartment outside of Boston, MA.  She recently received a job offer, but she has to start this month or they'll give the offer to the next applicant.  

Unfortunately, we're leased until the end of May (4 months).  The landlord plans to sell the house so it cannot be re-rented.  She says we need to honor the lease and pay the 4 months if we leave.

However, when we signed the lease, we mentioned we may be leaving before the lease was up.  The agent told us it was fine and that the landlord would re-rent and we'd be free to go.  We did not get this in writing...

I understand we signed a lease, but is paying the 4 months our only option?

Best,

Will

Hi All,

I'm considering lending money to a turn-key company in MO for an APR of 10% paid monthly with all funds to be returned after 6 months with possibility to renew.

They've given me a promissory note which contains the following term:

      "This loan shall serve as a second lien to the property located at ------------"

They reported to me that they have more than enough equity to cover both liens.

Is this term in the promissory note enough to protect me in the case of default?  I've spoken to a lawyer who recommended I also be added to the Deed of Trust.  

In general what's your take on this investment approach?  I may be moving in the next year so I'm looking for reasonable return, short-term investments with low-voltility monthly cashflow.

Best,

Will

Hi BP Members!

I’m a first time buyer interested in making a remote investment. I live in the Boston, MA area, and I’m considering areas of the country with strong past performance:

https://www.biggerpockets.com/renewsblog/biggerpoc...

Although I'd love to invest close to home, I haven't seen many properties that meet my goals. I'd have to do FHA, and I'd feel over-leveraged at this price point.

I’m looking for advice, stories, tips, etc. on getting started in remote real estate, especially as a first time buyer.

Best, Will

Wow, thanks for the immediate and overwhelming response!  

I hope this didn't bring too much cynicism to anyone's day.  This is real advice I was given, and I appreciate the alternative perspective.

Here's my take on the comments:

1.  The internet helps level the playing field for information that's on the internet.  But, there's lots of offline data:  The psychological state of the seller, the intent of the seller, unlisted properties, unlisted property details, etc...

2.  I've seen plenty of great examples on BP which disprove this theory.  I'm going to assume this was an exaggeration to real me back to a "safer" market rate buy and hold investment.  I understand this can be difficult for a new investor.

3.  If I incorporate risk in my model from the start, I can mitigate the risk with cashflow and location.  Nobody wants to buy high and lose money, but by choosing not to take action I would intentionally forgo the most powerful potential feature of the compound interest formula, the exponent.  

4.  I know people who've done this and gotten away just fine, but I'd rather play by the rules.  

5.  I work in the tech industry, and I've seen companies innovate time and time again in one of the most saturated markets.  Maybe it's not easy, but I have a strong feeling a creative investor can find a niche.  Carefully analyzing our assumptions and striving for an accurate assessment of market conditions may give a slight competitive edge against those with misinformation.

I'm sure the realtor was trying to give me good advice.  He's a nice guy, but he's primarily a residential realtor.  I don't believe he owns investment property, and It's possible this advice is closer to his comfort zone.