Advice on Growing a Portfolio

Cincinnati, Ohio
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Advice on Growing a Portfolio

Benjamin Briede
Member since 2022 · 3 posts · 0 votes

My name is Ben Briede (25) and I am a new investor. I recently just purchased a SFH in Cincinnati, OH as my primary. The plan was to update it, as the former owner had lived there for 50+ years so it was pretty out of date. My plan after that was to live in the house for a year-year and a half while I save up some funds to buy either another SFH or a Multi-family.

I'm leaning more towards another SFH since rent in the area is around 1.7k-2k per month and I believe it would cashflow a couple hundred dollars a month based on my current payments and other rental expenses. (This second SFH would provide me a place to live while renovating and then repeating the process again and again.

My issue is that I want to get into the game faster and saving funds especially now with the price of everything, if getting harder. I also don't want to use too much of my savings for a down payment on another one. I have looked into possibly a HELOC and looked into the pros and cons of this and so far I am leaning towards that.

If anyone has any recommendations on how I may achieve getting into the game faster (purchasing 1-2 rentals/year)  that would be greatly appreciated. I look forward to the feedback and making some connections!


Thanks!

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Steven Foster Wilson
Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
4y
Quote from @Benjamin Briede:

My name is Ben Briede (25) and I am a new investor. I recently just purchased a SFH in Cincinnati, OH as my primary. The plan was to update it, as the former owner had lived there for 50+ years so it was pretty out of date. My plan after that was to live in the house for a year-year and a half while I save up some funds to buy either another SFH or a Multi-family.

I'm leaning more towards another SFH since rent in the area is around 1.7k-2k per month and I believe it would cashflow a couple hundred dollars a month based on my current payments and other rental expenses. (This second SFH would provide me a place to live while renovating and then repeating the process again and again.

My issue is that I want to get into the game faster and saving funds especially now with the price of everything, if getting harder. I also don't want to use too much of my savings for a down payment on another one. I have looked into possibly a HELOC and looked into the pros and cons of this and so far I am leaning towards that.

If anyone has any recommendations on how I may achieve getting into the game faster (purchasing 1-2 rentals/year)  that would be greatly appreciated. I look forward to the feedback and making some connections!


Thanks!


 Hi Benjamin,

I think a HELOC is a great way to go or a refinance. I would start to call as many lenders as you can and compare rates and terms. I would start to run numbers on other potential places and if the numbers work ask someone to invest with you. Look at your strengths, could you manage and rehab the property? Then they get the loan and put the money down? I would just start to think of anyway to try to do more. I would also try and rent out some of your rooms if you are open to that. That way you get more cashflow while you are doing the project. On our first rehab it was on Ohio State campus, we rented each room for $250 which was the cheapest rent around. But we were rehabbing the whole place at the same time. We filled every room and had no problem.

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  • Brian Jackson
    Lender · LA · Member since 2022 · 7 posts · 5 votes
    4y

    Hi Ben, one route you could go is to use a hard money loan. Hard money lenders can typically finance 80-90% of the purchase price and 100% of the rehab. Usually you are not able to get a hard money loan if you are living in the property but you could use it for the additional SFH purchases. Just one option.

    1Reply
  • Steven Foster Wilson
    Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    4y
    Quote from @Benjamin Briede:

    My name is Ben Briede (25) and I am a new investor. I recently just purchased a SFH in Cincinnati, OH as my primary. The plan was to update it, as the former owner had lived there for 50+ years so it was pretty out of date. My plan after that was to live in the house for a year-year and a half while I save up some funds to buy either another SFH or a Multi-family.

    I'm leaning more towards another SFH since rent in the area is around 1.7k-2k per month and I believe it would cashflow a couple hundred dollars a month based on my current payments and other rental expenses. (This second SFH would provide me a place to live while renovating and then repeating the process again and again.

    My issue is that I want to get into the game faster and saving funds especially now with the price of everything, if getting harder. I also don't want to use too much of my savings for a down payment on another one. I have looked into possibly a HELOC and looked into the pros and cons of this and so far I am leaning towards that.

    If anyone has any recommendations on how I may achieve getting into the game faster (purchasing 1-2 rentals/year)  that would be greatly appreciated. I look forward to the feedback and making some connections!


    Thanks!


     Hi Benjamin,

    I think a HELOC is a great way to go or a refinance. I would start to call as many lenders as you can and compare rates and terms. I would start to run numbers on other potential places and if the numbers work ask someone to invest with you. Look at your strengths, could you manage and rehab the property? Then they get the loan and put the money down? I would just start to think of anyway to try to do more. I would also try and rent out some of your rooms if you are open to that. That way you get more cashflow while you are doing the project. On our first rehab it was on Ohio State campus, we rented each room for $250 which was the cheapest rent around. But we were rehabbing the whole place at the same time. We filled every room and had no problem.

    2Reply
  • Benjamin Briede
    OP
    Member since 2022 · 3 posts · 0 votes
    4y
    Quote from @Brian Jackson:

    Hi Ben, one route you could go is to use a hard money loan. Hard money lenders can typically finance 80-90% of the purchase price and 100% of the rehab. Usually you are not able to get a hard money loan if you are living in the property but you could use it for the additional SFH purchases. Just one option.


     I am not too familiar with Hard Money Loans so I will have to do some research. How are these loans usually repaid? After buying and renovating, would I just cash out refinance? Thanks for the response, I will definitely look into it.

    0Reply
  • Benjamin Briede
    OP
    Member since 2022 · 3 posts · 0 votes
    4y
    Quote from @Steven Foster Wilson:
    Quote from @Benjamin Briede:

    My name is Ben Briede (25) and I am a new investor. I recently just purchased a SFH in Cincinnati, OH as my primary. The plan was to update it, as the former owner had lived there for 50+ years so it was pretty out of date. My plan after that was to live in the house for a year-year and a half while I save up some funds to buy either another SFH or a Multi-family.

    I'm leaning more towards another SFH since rent in the area is around 1.7k-2k per month and I believe it would cashflow a couple hundred dollars a month based on my current payments and other rental expenses. (This second SFH would provide me a place to live while renovating and then repeating the process again and again.

    My issue is that I want to get into the game faster and saving funds especially now with the price of everything, if getting harder. I also don't want to use too much of my savings for a down payment on another one. I have looked into possibly a HELOC and looked into the pros and cons of this and so far I am leaning towards that.

    If anyone has any recommendations on how I may achieve getting into the game faster (purchasing 1-2 rentals/year)  that would be greatly appreciated. I look forward to the feedback and making some connections!


    Thanks!


     Hi Benjamin,

    I think a HELOC is a great way to go or a refinance. I would start to call as many lenders as you can and compare rates and terms. I would start to run numbers on other potential places and if the numbers work ask someone to invest with you. Look at your strengths, could you manage and rehab the property? Then they get the loan and put the money down? I would just start to think of anyway to try to do more. I would also try and rent out some of your rooms if you are open to that. That way you get more cashflow while you are doing the project. On our first rehab it was on Ohio State campus, we rented each room for $250 which was the cheapest rent around. But we were rehabbing the whole place at the same time. We filled every room and had no problem.


     I am somewhat of a handyman, definitely learned a lot with this first home. I am currently renting out two of my rooms here to some friends to help offset the monthly costs by about 85%. So I'm basically paying 15% of the mortgage utilities to live here, which is a start. I am do as you recommended and look into terms and rates from various lenders. Being in the Ohio market, would you have any recommendations on lenders? (not sure if this is allowed on this site). Thanks for taking the time to respond!

    Also, good note on renting rooms while renovating, I feel like this is overlooked when you could charge just a small amount to offset a small portion of debt.

    0Reply
  • Brian Jackson
    Lender · LA · Member since 2022 · 7 posts · 5 votes
    4y
    Quote from @Benjamin Briede:
    Quote from @Brian Jackson:

    Hi Ben, one route you could go is to use a hard money loan. Hard money lenders can typically finance 80-90% of the purchase price and 100% of the rehab. Usually you are not able to get a hard money loan if you are living in the property but you could use it for the additional SFH purchases. Just one option.


     I am not too familiar with Hard Money Loans so I will have to do some research. How are these loans usually repaid? After buying and renovating, would I just cash out refinance? Thanks for the response, I will definitely look into it.


    A hard money loan with rehab is typically a 12-month interest-only loan.  You would pay a monthly interest on the loan until your project is finished.  Upon that time borrowers typically either sell the property as a true flip or they refinance into a longer term loan such as a longer bridge loan 2-3 years or a 30-year loan.  I'm happy to answer any further questions if you want to PM me.

    0Reply
  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    4y

    @Benjamin Briede

    Here are the top five ways to scale your real estate investment business.

    1. Focus on a niche.
    2. Create a brain trust.
    3. Delegate.
    4. Measure.
    5. Standardize.

    Also you need to get yourself ample knowledge of real estate and learn from experienced agents - investors.

    Please read this blog for detailed information on above mentioned top five ways https://www.kiavi.com/blog/sca...

    All the Best!

    [email protected]832-776-9582Podcast Guest on Show #469
    NETWORTH BUILDERS5236 Reviews
    WebsiteView Page
    1Reply
  • Mike Klarman
    Specialist · NJ · Member since 2022 · 1k+ posts · 653 votes
    4y

    You wanna build capital fast then do not be afraid to sell as opposed to refinancing and holding.  Holding is great for that steady income, but you may only be $300 cash flow positive.  So it will take time to save.  Flip to make the money that you will sink in properties you intend to hold.

    If someone has only enough money for one deal, do not hold the property because then you can't do another deal.  Keep yourself liquid enough to always do a deal and you'll always be in the game.

    You're 25, you're young.  You have time to hold.  Generate some profits first before sinking money into a property and letting it sit there.

    Give me a call and let's chat.  I deal with people in your situation all the time.

    1Reply
  • Mateo Oquendo-Chandler
    Investor · Amelia, OH · Member since 2022 · 58 posts · 45 votes
    4y

    At the end of the day, keep in mind real estate is not a "Get rich quick." It's okay if it take a year or 2 to get the funds needed to do multiple projects at once. Over leveraging is a real thing and you don't want to be caught without a decent emergency fund because you tried to start running before walking. There are some great ideas and information being shared but its up to you as an individual to evaluate and determine the risk you are willing to endure with the funds you have available. 

    0Reply
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