All Forum Posts by: Abe Louis

Quote from @Matt M.:

You need to learn a trade if you want to go start flipping. "Getting into flips" right now is risky, ESPECIALLY since you don't know what you're doing. 

I'd keep the rental, turn your current home into a rental, and buy another primary with a low down payment. Then rinse and repeat.

 Yes this is a good idea except that I don't make enough to go buy another property unless there's cosigners. There is inherent risk in that as well.

I have to figure out a way to essentially double my income so that I have the right qualifications for a low down payment primary residence mortgage in the metro area. 

Quote from @Mark Ito:

Hey Abe! My biggest question/concern when reading the post is: would your rental still cashflow if you pulled all the equity out in a cash-out refi? Make sure to take into account capex and operating costs, not just PITI.

@Tyrek Brown nailed it with identifying your goals. What do you want to do, and get out of real estate investing? There are so many ways to make money, and what works for others may not work for you. Identify your strategy and create a plan to make it to your end state! 

Hey Abe! My biggest question/concern when reading the post is: would your rental still cashflow if you pulled all the equity out in a cash-out refi?

Right now I cashflow 200 a month but that's gross profit, I haven't raised the rent in 2 years. Based on my back of envelope numbers, refying would increase my payment roughly 200 a month and I'm about 200 per month below renometers average rent for the address. So I could likely refy and maintain the 200 a month cashflow with a bump in rents, and I feel confident I could get new tenants if needed 

Quote from @Steven Foster Wilson:

Quote from @Abe Louis:

I have a single rental property right now and I'm trying to come up with some ideas about what my next step should be.

roughly 100k in equity, I can sell this year using the 2/5 yr rule. It's rented out thru October, so I would have to wait till November to list it.

right now it's on a 30 year at 5.2% from a refy in 2019

my main short term goal is to get into the rehabbing side so I can increase my income and leave my job serving tables in 2 years max. 

should I cash out refy, with a plan to keep the property longer term, and then try to partner with a person or two to learn the rope on a few flips?

should I sell and look for a 3 plex to run as an STR and use maybe half for the idea above on getting started with flips?

Just looking for some feedback or more ideas about what I could do. And not to be dismissive but unfortunately, as far as quitting my job, I wont be able to move to a different job that would require gettig a license 😬

Where are you looking? You have to see if it would be worth it for you to sell during this market. Have you looked into doing a HELOC? At what the rates are doing now that is not a bad rate to keep. Are you making money on your rental? I would start running numbers in the area you are in and start running them OOS as well. It is good to get a gauge of what you could do and what makes sense.

Where are you looking?
I would likely want to work in the Denver metro as I know it quite well.

Have you looked into doing a HELOC?

My credit score is like 730. As far as I know you need pretty good credit for a HELOC. The other day on my credit karma dashboard I saw some offers for like 15% on a heloc which seems high

 Are you making money on your rental?

I make 200 a month after mortgage and hoa. Is a 721 sq ft 1 bedroom condo.

I would start running numbers in the area you are in and start running them OOS as well.

I'm not opposed to out of state. But as I'm starting out I would most likely want to be ableto stay in market. Denver is probably not the market for cashflow right now. Thats why i think doing rehabbing for a couple of years, and keeping  deal or 2 for apprecation makes sense just starting out and I can reevaluate in a few years. 

Making 200 a month on 100k in equity is ok. But my yearly bills are around 30k so my goal is to pay for my bills with the profits of rehabbing and then build a portfolio from there. 

I have a single rental property right now and I'm trying to come up with some ideas about what my next step should be.

roughly 100k in equity, I can sell this year using the 2/5 yr rule. It's rented out thru October, so I would have to wait till November to list it.

right now it's on a 30 year at 5.2% from a refy in 2019

my main short term goal is to get into the rehabbing side so I can increase my income and leave my job serving tables in 2 years max. 

should I cash out refy, with a plan to keep the property longer term, and then try to partner with a person or two to learn the rope on a few flips?

should I sell and look for a 3 plex to run as an STR and use maybe half for the idea above on getting started with flips?

Just looking for some feedback or more ideas about what I could do. And not to be dismissive but unfortunately, as far as quitting my job, I wont be able to move to a different job that would require gettig a license 😬

Quote from @Tanner Pile:

I would expect to leave a portion of the $100k in the deal as well. The BRRRR strategy in Colorado is difficult to get all of your money out of a deal when you refi. This is a lender I've been speaking with on doing a BRRRR strategy and they do 100% finance on rehab and depending on experience can do 10-15% down payment for the whole project. https://brrrrstrategyfunding.c...  The loan officer Alex is on bigger pockets as well! @alexbekeza 

 Cool! Thanks for the link. Yeah I don't mind leaving some cash in the deal as long as I have enough after for the "repeat" step 

Quote from @Theresa Harris:

Talk to your bank to find out how much you can borrow.  That will give you an idea of how much of that $100K you need as a down payment and how much you have for renos.

You mentioned you've been renting your main residence-part of it or the whole thing and for how long?  You may need to pay taxes on any capital gains depending on your answer.

I've owned it for 6 years and I moved out in 2020. So based of the two of last 5 rules (or at least how I understand it) then when I sell next year I can avoid the capital gains tax.

I've been renting out my previous main residence and next year I plant to sell it. I should net about 100k and I'm wondering If this is enough to start a BRRRR type strategy in Denver

Unfortunately it's only a 1 bedroom

What kind of reserves would make sense to have when closing on a 4 plex

WriteI want to get started this year in real estate. I am trying to decide between the two strategies and which will be best. I will be doing a cash out refy of my small condo and will have between 10k and 15k to start with.

First, I live in the Denver area and will be investing within a reasonable driving distance to where I stay. I work 5 day and 50 hours per week. I am typically not off until 8pm or 11pm on days that I work. I ultimately want to buy and hold/sell multi-family properties (eventually large ones).

OK so if I want to get into multi-family why even think about wholesaling right? Well here is my thinking… becoming a wholesaler will allow me to develop skills and get great at finding as negotiating deals as well as meeting active investors while I’m putting deals together. The big benefit I see is that while wholesaling is clearly hard work and time consuming, it can allow me to grow that initial capital into a more comfortable amount for eventually investing into buy and hold properties. The concern I have is wondering if my work schedule will get in the way of being able to be a successful wholesaler (as I am there a lot and I do not have a ton of flexibility at work to be able to come and go). Also if I spend my capital wrong and can’t get deal flow generated, it might take while to come up with another lump sum like that for some time.

The other strategy goes like this. I take that 10-15k and try to find a 4 plex to buy with an FHA loan. I can rent out my small condo (and cash flow it) as well as move into one unit of the 4 plex and rent out the other three. This strategy is appealing because I can have 4 rental units as soon as I can close and get the tenants. It will allow me to immediately gain experience in property and tenant management. My concern here is that in my area, even with an FHA loan it would take probably all of this money to close on a deal like that and then I will have little in the way of reserves to run the property which makes me nervous. In addition I know that I will be most likely highly dependent on any equity within the property (which I will have almost none) as to when I can acquire another property.

Both sides have positives and negatives (which is why I’m posting it)

What do you guys think?

PS this is my first ever post