What do with 80k from a private investor

Question

Johnoson Crutchfield · Answer

Just thought I'd provide an update.  I've now used the 80k from the private investor to do the following:

1) Purchased two houses for 44k. 15k in renovations.  Refinanced at 92k (Rents 1425)

2) Purchase two more houses for 82k. Plan to renovate for 15k.  Plan to refinance at 120k.  (Rents 1800/month)

Taking the extra equity I am pulling and putting into a savings account to buy a property free and clear.  What do you all think?  Feedback?

Johnoson Crutchfield · Answer

Randy,

I'll hit 31 units by the end of this year if everything goes to plan. All of them will be leveraged at about 85% of ARV on 5 year commercial loans amoritized at 15 years.  My plan is to use the cash flow first to build six months of expenses in savings, then to snowball paying off the properties.  My business will have this rental side with 31 units netting 5k a month paying off the debt in 15 years, and another side doing wholesale/flip deals to help accelerate debt payoff.  I'll be open to selling my portfolio at anytime too as a way to raise capital.  My goal is to get on an episode of Bigger Pockets.  As I am working a lot this year to build my portfolio in an effort to create a successful business.  I know I've been extremely aggressive in acquisition and also have moved quickly, but I felt like this was my year to go after my dreams!  I'm open to feedback as a lot of what I plan to do and have done is coming right off of bigger pockets.

Redgy Saint-Germain · Answer

@Johnoson Crutchfield

Why not use an FHA with 3.5% down for a 4 units? Thats a  minimal investment, you can live for free in one of the units and produce some massive cashflow. You can always refi after 6 months to a year

Johnoson Crutchfield · Answer

So here's an update.  I've got the 80k in my account.  Here's my plan.

I have 3 properties under contract.  I'm going to buy them in cash, fix them up, and refi them with local community banks.  My plan is to get all my cash and reno costs back out due to the price point at wish I bought the properties.  Then I'll have the 80k to do it again.  What are you all's thoughts?

31k Value 55k Reno 5k Rent 800/month

49k Value 70k Reno 0 Rent 800/month

14k Value 35k . Reno 12k Rent 725/monnth

Bobby Montagne · Answer

Hi @Johnoson Crutchfield ,

Your plan sounds like a reasonable plan although you may be challenged getting more than 75% cash out on an investment property. Another idea may be to keep two properties and sell the third to realize cash. This cash generated gives you the opportunity to buy properties quickly without having to rely on financing. Good luck with your real estate investment business.

Johnoson Crutchfield · Answer

Yep.  I'm up to 34 units.  We are scheduling a meetup on October 24.  PM so we can chat.

Casey Barickman · Answer

@Johnoson Crutchfield

Any updates? I am a new investor in the area and Tupelo is definitely a good market to BRRRR. I am looking to get into the market after I can acquire some private funds. I have cash reserves but need those initial funds to get the ball rolling. May be we could get a meetup going for networking with local investors.

Randy E. · Answer

@Johnoson Crutchfield,

Sounds like you're doing fine.  Keep up the good work.

Question: After acquiring 30 houses in 3 years, how many do you plan to have paid off and how many will be leveraged? Just curious.

James Masotti · Answer

Keep the snowball going!

What do with 80k from a private investor

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