All Forum Posts by: Amy Kendall

@Austin Ure.  I don't have any personal experience with him, but I have read several posts where he is the topic of the discussion.  Try reading through some of those and hopefully you can get some answers there.

I have had this same situations with clients in the past.  I appreciate it when they tell me in advance that they will be looking in multiple markets.  Just be upfront with the agents and then they won't be surprised if you end up not buying in the area.  

@Jaiden Olsen  I totally agree with you on the return on equity.  We actually just told our tenants that we are not planning on renewing the lease.  So, we have two months to figure out exactly what we are going to do.  We will probably do a 1031 into a larger property or maybe two other properties.  We started out with single family homes and are transitioning into more multi family units now.  It might not have been the fastest route, but we have built up a lot of equity that has allowed us to branch out now into bigger units.  My husband and I debate how much leverage we want to have as well.  If we paid off all our units, we would exceed our cash flow goals.  It's always a balance.

@Cody Richard Awesome!  Welcome to the forums!  Sounds like you are on a good path and have already set some good goals.  Keep with it and good luck!

Investment Info:

Single-family residence buy & hold investment in Pleasant Grove.

Purchase price: $160,000
Cash invested: $8,000

This was our second home we purchased when we moved back to Utah from school. It was a flip and our real estate agent warned us that we were paying top dollar at the time. We did a few repairs and improved the yard as we lived there for just over 2 years. Then, when I told my husband that I thought I could rent it for $1450, he thought I was crazy! We now rent it for $1595. This was one of our best investments as it hits the 1% rule, which is difficult to do in our area.

What made you interested in investing in this type of deal?

It was a great home for the price and had just been renovated due to a fire.

How did you find this deal and how did you negotiate it?

It was on the MLS for one day and went to multiple offers

How did you finance this deal?

We did a conventional 30 year loan

How did you add value to the deal?

We improved and fenced the yard

What was the outcome?

This property has been performing very well. We are debating whether to do a cash out refinance now or do a 1031 exchange within the next few months.

Lessons learned? Challenges?

Had we known at the time, we should have bought as many properties like this as possible. A property like this is nearly impossible to find in our area now. We also made the mistake of moving into a bigger home that we really liked and didn't want to leave. If we had continued to move into homes and then turned them into rentals, we could have had better financing and could have sped up our portfolio growth. Unfortunately, we didn't find BiggerPockets until after we had rented this house.

Investment Info:

Single-family residence buy & hold investment in Pleasant Grove.

Purchase price: $160,000
Cash invested: $8,000

This was our second home that we purchased when we moved back to Utah from school. It was a flip and our real estate agent warned us that we were paying top dollar at the time. We did a few repairs and improved the yard as we lived there for just over 2 years. Then, when I told my husband that I thought I could rent it for $1450, he thought I was crazy! We now rent it for $1595. My husband was so excited that he started looking for a house to move into right away. I only wish we had the knowledge then that we had now, because we could have bought more properties like this at the time. This was one of our best investments as it hits the 1% rule, which is difficult to do in our area.

What made you interested in investing in this type of deal?

It was a great home for the price and had just been renovated due to a fire.

How did you find this deal and how did you negotiate it?

It was on the MLS for one day and went to multiple offers

How did you finance this deal?

We did a conventional 30 year loan

How did you add value to the deal?

We improved and fenced the yard

What was the outcome?

This property has been performing very well. We are debating whether to do a cash out refinance now or do a 1031 exchange within the next few months.

Lessons learned? Challenges?

Had we known at the time, we should have bought as many properties like this as possible. A property like this is nearly impossible to find in our area now. We also made the mistake of moving into a bigger home that we really liked and didn't want to leave. If we had continued to move into homes and then turned them into rentals, we could have had better financing and could have sped up our portfolio growth. Unfortunately, we didn't find BiggerPockets until after we had rented this house.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $140,000
Cash invested: $4,200

This was our first home that we bought and later started to rent out. It's where it all started. We now rent this home for $1540. Last year in 2018, we did a large renovation on the property. We also did a cash out refinance on this property when we first started expanding our portfolio a few years ago. It has been a solid investment. We are looking to to do a 1031 exchange on this property in the next year or two to trade up for something else.

What made you interested in investing in this type of deal?

We had no idea about rental properties at the time. We just bought the nicest/cheapest house we could afford after getting married

How did you find this deal and how did you negotiate it?

It was on the MLS. There were multiple offers and we offered full price.

How did you finance this deal?

We didn't know much about financing and this was before the crash. Looking back, our lender was a little shady and took advantage of our inexperience. We had two loans, one for 80% and another for the other 20%. They were ARMs that we ended up refinancing out of pretty quickly once we understood what we had signed up for.

How did you add value to the deal?

We cleaned up the property while living there and made some improvements

What was the outcome?

This property has been our workhorse and allowed us to do tap into equity later to springboard our later investments. I also have managed this property throughout. I sure have learned and changed a lot about managing properties since we started renting this out this out years ago.

This month we are going to analyze three different types of properties.  Come and meet other investors and share your knowledge!

Who have you talked with?  If you have a good deal and bring that much to the table, I would think someone would be fine financing the rest if the deal warranted it.  Maybe attend some local real estate meet ups and do some networking.  Once you know other investors and you have a great deal, you will find that money will become attainable.  You could even partner with someone.  It's better to get 50% of the deal then 0% of no deal.  Good luck

Generally, the more equity that you have, the lower your return becomes over time.  That is the power of leveraging your money, but as you know, people have very different opinions on how much leverage is too much.  I don't think that there is one right answer here.  If you are actively looking for deals and are confident one will come along, and if you have no other way to finance that deal, then yes, I would move forward with the cash out refi.  Out of the investors I know personally, the ones that actively use their equity to grow and purchase more properties are significantly more wealthy than those who have not.