All Forum Posts by: Aaron Almquist

Thanks everyone for the great feedback. I was unsure if this was a moot scenario for one reason or another, and haven't had it happen to me, was just imagining it as a possible occurrence before I jump in. I appreciate all the perspective offered. Personally I would absolutely err on the side of leaving enough in the deal to cash flow and just take what I'd planned. Especially as I am new to this and getting caught with slim or zero margins on something is a nightmare to me. I think if I was further down the line and more comfortable with an area/the process/my numbers game then I might average it out/compensate the cash flow over other deals and put the extra back in the process.

Am curious if anyone has ever had the problem of an ARV coming in too high so that you got your money out and then some but then the property didn't cash flow/mortgage was higher than you anticipated?

Before I go to call or sit down with any PM companies or individuals, I am curious how everyone has structured this relationship within their own business.

 - If you are dealing with a larger company, are they open to negotiating with you on terms or do they essentially tell you how their business does things/take it or leave it?

- If you have negotiated to the way you personally want things done, how are you structuring that arrangement and incentivizing your PM so they're not taking you for a ride but also making it worth their time and having it as mutually beneficial as possible? 

Also, any links to resources on this subject - BP or external like podcasts, articles, industry literature etc - are greatly appreciated!

Thank you @Andy Mirza for those insights. So true.. I never thought about it that way that many banks probably don't run the numbers on individual properties as you said. They are driven and beholden to their own performance metrics and could care less about my "deal" and numbers. Getting a better picture of all this now, thanks a lot you guys. 

If anyone else has a take on this I would greatly appreciate it :)

Thanks @Joe Villeneuve I will do that!

@Joe Villeneuve (forgot to tag first time, sorry for double post) 

Hmm, after the "limit" on mortgages there are portfolio lenders, correct? The rates are higher, so harder to make it a deal, but still doable and is essentially a step in the method once you've reached that point. I'm still not really understanding what you're suggesting as an alternative. A loan that isn't secured by assets is just a normal loan that is secured by your credit, income and DTI. Are you saying to simply get a conventional loan... and do what with it? And if you never left a dime in any property that would be over-leveraged and not a great position to be in heading into a recession, esp for a newbie like me. I apologize, but I'm just not getting any picture of your better method, but I would like to understand if you've got one!

Hmm, after the "limit" on mortgages there are portfolio lenders, correct? The rates are higher, so harder to make it a deal, but still doable and is essentially a step in the method once you've reached that point. I'm still not really understanding what you're suggesting as an alternative. A loan that isn't secured by assets is just a normal loan that is secured by your credit, income and DTI. Are you saying to simply get a conventional loan... and do what with it? And if you never left a dime in any property that would be over-leveraged and not a great position to be in heading into a recession, esp for a newbie like me. I apologize, but I'm just not getting any picture of your better method, but I would like to understand if you've got one!

@Joe Villeneuve Not sure what you mean by BRRRR will dead-end you, can you elaborate? What you describe is exactly what it is... if you have a good deal then you ideally then you've not really spent any money and hopefully even come out a little ahead and it is repeatable in a comparatively rapid pacing. I am new to this so I honestly want to know. By your description of thinking of money as a verb etc. I am just not sure what you're referring to specifically. With the example you have above are you saying a better way is to just forego real estate ground-level work and just become a money lender?

Okay, thanks! Well, I would be doing acquisition and reno with my own cash, no loans or terms to comply with on that end as far as occupancy being required. I was just going to occupy it so I have somewhere to live. I should have mentioned that I will be doing this in another state than where I currently live, and then returning here after about 6 months. I would like to avoid having to rent a room and have that added cost if possible. 

I am able to work remotely, and am originally from an area near where I will be investing, but temporary relocation is inevitable for my comfort zone/investment style. I simply must go there and meet with people, build relationships and see who I can form good working relationships with. I plan to do this periodically ever year until a time I can work out some kind of automation to the process, as much as that is possible. Thank you for the reply! Honesty does count for everything, I believe that @Krystyna Fennelly