All Forum Posts by: Andrew Freed

@Faris Wright - Welcome to the BP community, there is so much value here it is almost overwhelming. One of my biggest tips would be to attend as many meetups as you possibly can. I've met contractors, partners, investros, lenders etc all at the meetups. They are a cheat code to building an all star investor focused team in any market. Best of luck on your journey towards financial freedom. 

@Matt Owens - I've used the HELOC route to expand my portfolio and it has been extremely effective. I HELOC'd my 1 bedroom condo in Boston MA, took out $200K and used that as a warchest to expand my portfolio. I utilized it for 3 househacks and 3 joint venture amounting to 20+ units. The key with the HELOC strategy is understanding the concept of arbitrage. Whatever you utilize this HELOC for, it is imperitive that you transition these funds into opportunities that provide a much higher return than what you are borrowing at.

Additionally, I personally like the Northeast market, much less competition since people interpret the tenant friendly aspect as more challenging, but with that comes less competition. Additionally, it is way more insulated than the sun belt due to the regulatory requirements when it comes to building. It is much more challenging to create supply in the Northeast further increasing demand. I invest in MA, RI and plan on investing in NH. All good markets if you target the right tertiary area. 

@Brian J Allen - Agreed, some of these properties in Worcester are way over priced and do not make sense at the sales price for some of these househackers. Personally, in Worcester, I think $600Kish is a good range for a 9 bed 3 bath based off the revenue. At $700K for some of these 3 families, the numbers simply don't make sense. Good observation. 

@Hardy Davis - All good questions! If you lived in your primary residence for the last 2 years of 5 years, you're eligible to sell it and pay no taxes on the first $250K for a single person or $500K for a married couple. A 1031 defers paying taxes but a primary residence sale removes the tax liability from selling up to a certain dollar threshold altogether. 

Personally, if possible, I would take the tax free money and transition that into a commercial multifamily property (5+ unit property) rather than 1031. You won't be against a time clock to find a property which is the case with a 1031. You also are gaining tax free funds vs. simply deferring the tax liabilty down the road until you sell the new 1031 property you purchased. Just something to consider. Either way, you are going down the right track. Good luck on transition your equity into cashflowing commercial multifamily. 

@Grady Gilman All really good questions. When I search for househacks, I try to idenitfy value by finding a mismatch between square footage and bedroom count. For instance, say I run across a 3 family at 4,000 square feet but its marketed as a 6 bed 3 bath property. Normally 3-4 bed units are 1000-1400 square feet on average hence if you find a property where the average square footage per unit is 1300 but its listed as 2 beds each, there is a high liklihood you can find additional bedrooms increasing value with some simple carpentry work. I hope that helps in your search to find the perfect househack. 

@William Stewart - This is way too generic, how do you expect to gain any value from this post? When you want something in life, you have to ask for it and be very specific. What sort of real estate opportunities do you want? Multifamily in Charlotte at $150K a door or less? Like be very specific otherwise you will get no feedback or insight to address what you are truly looking for help on. 

@Darnell Fenderson - Too little information for anyone to pounce on this opportunity. Provide numbers for purchase, renovation, and exit. Show people what the investment looks like over the life cycle otherwise people simply don't have enough information to go off of. I would recommend creating a short business synopsis/plan of the property, the numbers, pictures, and comps and send it around to close family and friends that might be interested in lending or partnering. That is normally what I do when I have a property under contract and looking to raise capital. 

@Bob Asad - Sounds like a fantastic product. I utilize these products but more for commercial multifamily where they build in an interest only period, 30 year amortization schedule, and the bank funds as much as 100% of the construction costs. Once you go commercial, the loans are a lot more negotiable since they tend to be portfolio lenders and hold the loan in house. Nonetheless to find a product like this for residential with only 20% down is pretty sweet! 

@Carl Rowles Agreed, having separate bank accounts for each property makes your job of bookkeeping that much easier. When you intertwine the finances of properties into personal accounts, it makes your job of financial reporting and bookkeeping very challenging. I own over 200 units and have separate bank accounts for each LLC to keep things smooth and straight forward. Also, as mentioned above, this is a great way to start building relationships with small local credit unions and banks which offer the best loan products for investors.

@Theresa Hansen - You got a ton of good feedback already. In reference to finding the best contractors, I highly recommend networking and getting to know high volume investors in your area and asksing them for recommendations. If you plan on flipping or LTR, target those investors. Once you befriend one of these big players, ask who they use. I get the best contractors and referrals from investors doing this day in and out and who already have a solid contractor team in place.

Where do you find these big players? At meetups, contributing to local forums and groups, and also investor focued agents. The key with befriending players making it happen is leading with value, expecting nothing in return and sooner or later, the law of reciprocity will kick in and they will feel a need to help you.