All Forum Posts by: Alexander Gonzalez

Hello Scarlett!

Did you have the unit staged for the photos? Perhaps it would be worth paying for professional staging to help potential candidates envision the possibilities of the space. As mentioned above, the space is pretty small to market to more than two people living in the unit. Marketing one of the bedrooms as an office space could appeal to a working professional who now works from home and meets the financial requirements you have laid out for your tenant qualification. There are some very well qualified professionals offering their advice in this thread. I would upload some pictures of your unit and allow their real estate minds to be able to offer you more advice or insight on what you may be missing. I am seeing that 1bed 1 bath 640 sqft B class apartments are renting for about $1,600-$1,800 a month in the Lower Queen Anne area. So this is an interesting situation. But nonetheless, one that can be solved effectively. 

Don't allow discouragement to creep in, you could be five feet away from striking gold!

Great work Garreton!

Sounds like a hell of a hit to kick off your flipping business.

After experiencing the problems you encountered with your first contractor, could you share a little bit on the topic of how you plan on structuring your business when dealing with contractors in the future? Did you ask for a Scope of Work? Structure some sort of payment agreement as certain items are completed throughout the rehab?

Phenomenal!

Absolute wealth of advice and information that this has post has generated. The fact that it has garnished such a positive response is only a testament to how hard you guys are crushing it. Congratulations to the two of you!

I’m curious to know how you guys keep up to date and on top of possible local legislation arising in the future, imposing restrictions on short term rentals within the municipality?

I have been shifting my focus towards zeroing in on a market to purchase a STR property, and it seems like local legislation in markets within a six hour radius of where I live hasn't been in favor of STR operators. So I have been expanding my search further and further out, in search of friendlier markets.

So I was just curious how you guys approach the possibility of local laws changing in the future to less than favorable terms, what kind of exit strategies would you have in mind? Did you target the properties knowing that if things were to change, they would still serve as great LTR properties? I know you mentioned you’ve added a healthy amount of value to your properties, making them an effective flip, but I’m just curious to learn a little more about your strategy when you targeted your acquisitions.

I apologize about the prattle.

Just gets me excited to see someone else having success in a field I am working towards getting into.

You’ve got another Patreon subscriber and I’m looking forward to learning more from your content.

Good Morning Chris,

All three forms of financing are effective enough to execute your first, third, or tenth deal so long as the numbers work for your deal. It seems likely most investors would prefer private money, and if you have access to it I would encourage you to consider it. Cash offers make your offers more enticing, will close the quickest, and will allow you to purchase distressed properties that wont qualify for traditional lending. With that being said, using OPM for your first deal might seem a bit intimidating as you are just starting to figure out the ins and outs of the fix and flip business. However, as long as you run your numbers correctly, conservatively, and find that you truly have a good deal on your hands, go for it. Bring the hustle and let your friends and family bring the money. 

Hard money isn't as expensive as it used to be. If you factor in your lending costs and still find that you are left with your desired profit margin, hard money is still a considerable option. Hard money lenders are experienced at looking at potential deals and can serve as a second opinion regarding how good of a deal you truly have on your hands. If you're confident that you can complete the rehab within your predetermined time period to keep holding costs from going over budget, hard money can work for you just as well.

Traditional financing could be a road block when it comes to targeting seriously distressed properties, some lenders wont loan on a property that is not in "move in ready" conditions. As a flipper, these properties are the ones that could come with the most opportunity for the bigger profits. However, if you'd like to do a "live in flip", traditional financing can be a viable option for you. 

Look at your investing three dimensionally, with more experience and resources you will find that one day you are actually utilizing all three forms of financing to fund your business as you take on more rehabs throughout the course of your investing career. 

Good luck, keep bringing the hustle!

@Marion Lee

Could you elaborate a bit more?

During the HELOC appraisal, is the appraiser able to count the unregistered additions towards the value of the house?

Also, could the appraiser serve as a whistle blower when he or her walks the property and notices the un permitted additions done to the structure?

@Roc Pilon

You could check with the county assessor and request to see if any permits were issued for additions / upgrades to the property. If no records exist for the additions, you very well may be opening up a can of worms by reporting them to the city.

@Mike Barry I'm not sure, as I am pulling the HELOC on a primary residence. Call a local branch and I'm sure they'd be happy to help. US Bank seems small enough to work with investors but big enough to be able to lend nationwide. Most of the application has been done online, another benefit that I've enjoyed simply because it's saved time and been done at personal convenience.

@Brandon Wood

Pretty much as stated before, you misunderstood the terms of the HELOC.

But I wanted to add, I'm currently in the process of pulling a HELOC and I am working with U.S bank. They loan up to 90% LTV and on up to a 50% debt to income. I liked that they allow you to lock in a fixed rate on up to three draws and are interest only for the first 10 year draw period.

Just food for thought if you are shopping around.

Good luck!

@Chandler Davidson

https://www.biggerpockets.com/blog/generate-10000-passive-income-monthly-quitting-day-job?utm_source=newsletter

There was a blog post on BP earlier this month that talked a bit about achieving your monthly financial goal. It might be a bit of a tangent, but definitely worth the read nonetheless.

@Craig Jeppesen Thanks Craig, I appreciate you taking the time to share that piece of knowledge with me. It's extremely helpful getting feedback from folks with personal experience utilizing HELOC's.

Using the credit line for short term financing is the plan. It’s simply some of the cheapest money to borrow out there. As long as I analyze my numbers correctly, I see very little downside to this investing vehicle if utilized responsibly and correctly.

Numbers don’t lie, if the numbers make sense and if the numbers work, we can simply replace all doubt and speculation with the assurance of math. Thanks again for the sound financial advice.

Cheers.