Here is how I do it, Please critique

[Chris Adams]

Ive been a REI since Jan 2010 when we acquired our first distressed property, a SFH, with the sole intention of rehabbing the house and converting it to a rental. Prior to this I knew NOTHING about being a REI. But I had been a general contractor/home builder for 13ish years, so there was no scenario that was going to pop up in rehabs that would scare me.

Now I have 4 SFH's that have been purchased, rehabbed and rented out. Here is what I do and I am hoping someone can tell me if I found the magic formula or if I am doing this wrong.

I have a $100k line of credit under my LLCs name. I use this money to auqire properties after I have done all of my due diligence which I do myself. Currently I buy only distressed properties that have been foreclosed on.

Every offer I make is Cash/no contingencies. again i due all of my due diligence myself and I am very educated in what I am doing. I rehab the house with a combination of my own money and my LOC funds. My wife and I do all of the work, occasionally hiring out certain trades like drywall and roofing. But we have the skill set and tools for this.

Once the rehab is complete, I rent the home out, w a 1 year lease, and I am diligent about tenant background checks, most of my tenants are 750+ credit scores.

I then turn around and hand my bank a copy of the lease, along with all the other paperwork and I get these houses financed ( at this point I own the house w cash from the LOC and my own reserves). I am currently getting 25yr ams at 5.125%, 5 year balloons at 80% of ARV.

With this process I literally have $0 invested in the property other than my equity and I have always received cash at closing. My best deal gave me 18k over my total cost, but since I supply all of my labor, Im simply paying myself to work.

I have 4 properties now, the 4 combined properties cash flow over 1k/month and they have $101k in equity after the 80% financing.

The cash outs at the end are my income to pay bills, along with the monthly cash flow from the properties. I want to move into small multi's soon, and my banker wants me to do the same. My goal in 5 years is to have all of my personal expenses paid by my rental cash flow. I need 4k/month to do this.

Ways I can improve?

All comments appreciated