All Forum Posts by: Andrew Kennedy

Quote from @Eric McClam:

My wife and I just bought our first STR in Powder Horn Mountain neighborhood in Deep Gap, NC outside of Boone, NC. Its a 4 bed / 3 bath 2700 sq. foot home. Looking for suggestions on where to source attractive commercial grade furniture that will stand up to STR turn over rate. Need Help!

Thanks,

Eric

Rob Abasolo (aka Robuilt on YouTube and Co-Host of the Bigger Pockets Podcast) is really experienced in AirBnBs and through his YouTube channel and website, he provides his exact shopping list as well as an entire video on purchasing furniture. 

After I reviewed his shopping list, it is really good. It's what I'm using as a framework for my STR. I'm not sure if I'm allowed to post his video link or link to his shopping list but if you look up his YouTube channel, you'll be able to find it pretty easily under his AirBnB start up channel.

Most people say you can only have 1 FHA loan at a time. This is generally accepted as true but it's not. See this site for info: https://www.lendingtree.com/ho...

additionally, the IRS Code has a section (can't remember off the top of my head) that allows for you to have a 2nd FHA loan for a 2nd primary residence so long as it's for a parent, and that scenario has specific things needed to qualify for. IIRC, they have to not be able to work or have medical limitations. The exemptions are there, but they are specific in qualification. What a lot of people do is each person of a couple buy with FHA and then get married so they can move in a bigger home to accommodate a family, and get a third.

I keep reading stories where people start off with a property per year, then I hear people purchasing a property every month. Between a person and their spouse, they can only have a max of 10 mortgages. So what do people people do when they are scaling like that? Is there a limit on mortgages that a LLC can have? Do they have their LLC take on the mortgages? Do they take HELOCS to do all cash purchases? What if you're BRRRRing and you already have the mortgages capped and can't get another mortgage? Your BRRRR would be shot. So what do you do? Maybe bring a partner and leverage their credit? I know there are a lot of options but I'm curious as to what options you take. Thanks.

Your best bet is to talk to a Lender about this. You could always reach out to a lender and offer to take them out to lunch and pick their brain for an hour. Most are willing to answer your questions, just ensure that you consider them in your next lending. Like BP says, provide value to them first, and you'll be surprised about the doors that open for you. For a starting point, ask for a referral to a lender. In the Facebook group, there are plenty of lenders willing to assist. 

If you have the normal contingencies, have an inspection done. If anything is wrong with the property, then you can use that contingency to get out of the contract. You may lose the cost for the appraisal and if applicable, the option fee, but you would be able to get your EMD back.

Quote from @Samuel Mes:

How do I find out the stats (Im located in Texas) for what properties are being rented out in a certain area? I can see the "for rent" properties on a listing site like MLS but I can't see what's currently being rented. Im assuming Ill have to guesstimate the price point as Texas isn't obligated to list it. Thank you!

There are two options. I start with the primary and then an alternative solution. 

Primary: call a property management company and tell them you’re considering purchasing a property that you’ve been contemplating but don’t know fair market rent and you looking into hiring a property management company for it. Provide them the details like “It’s a 3 bed/2 bath single family home, built in 2004, 1468sqft on a 4200 sqft lot. I was looking for a quote on fair market rent before I consider purchasing  it and outsourcing to a PM company. Can you provide that information?” The PM companies will be willing to present you with a quote if it’s a potential lead for them. You can always ask multiple PM companies and then average the number for what you would charge. 

alternatively, have your real estate agent pull comps for what has recently sold and their rent values. Just keep in mind that the further away from sale/rent date, the less reliable it is, especially if the market has changed significantly since. For example, if it comes to another fed rate hike, mortgage rates will increase and less people will be buying because they can’t get financed so the demand for renting will increase. 

in the words of Jordan Belfort (Leonardo DiCaprio, Wolf on Wall Street), “Pick up the phone and start dialing. Hope this helps, cheers. 

How? Seriously, how do you get your spouse on board, especially when you’re starting out?

I came into some money and have been focusing on real estate for the last few months. I have ready close to 40 books, contacted a lot of people to discuss, read articles and gone through podcasts. 

my wife won’t get on board. She says she’s on board but everything I try to show her or ask her to read, she won’t. I have her 1 book 3 months ago and she’s maybe read 20 pages of it. It’s really frustrating because I find myself fighting her reluctance and pushback every time I go to make a decision. I’m trying to keep her involved in the decision making process but she doesn’t educate herself or contribute. I’m at the point where I don’t even want to add her to any of the properties or consider using her credit because I don’t want to fight every time it’s time to purchase another investment property. She doesn’t want to do any work, doesn’t want to have a contractor come in to do the work a property needs and only wants to have turn key rentals. It’s so frustrating because that is why so many people pass on deals, because they don’t know or don’t want to put in the work. But she constantly says “Look at this 1.2 million dollar home we could have for us!” She expects us to purchase every property and just collect a check. I’m at a loss, and every time I talk to her about it or ask her for her input, she always has a negative mindset and can’t even see any potential that I do because she hasn’t educated herself. I can’t force her and I don’t know what to do

Quote from @Emeka Attoh:

Quote from @Vinnie Da silva:

Pre-foreclosures, they are unlimited supply. There are tons of pre-foreclosures hitting the market every month, in most counties. The competition is a lot less than conventional real estate. You just have to figure out how to get to the homeowner.

 Awesome insight.

Now I get it. This is why a lender should be part of your team. Lenders deal with the foreclosure side of real estate since they get you the loan in the first place. Trends with pre-foreclosures and foreclosures before they hit the market can be a great deal especially if the previous owner paid down the loan a significant amount. 

I didn’t know this but after reading it, this just kind of clicked for me. Great information.

Lease options with 3-5 year term might be difficult to find. In my experience, a Lease Option is usually done on a 1-2 year basis. That's my experience because one of my business partners specializes in lease options. Now, don't let that discourage you from looking for what you're wanting; it may be out there. And networking like you are now is a good starting point. 

Alternatively, you could search for properties for sale with owner financing. You take care of the mortgage, but you put a tenant in with your own lease option. When they execute the lease option, you clear your own contract first (may take all cash to do this) and your tenant will then be waiting on financing from the bank to go through and then finalize that deal. 

A 200k property with an FHA loan, meaning you live in it for a year at a minimum, requires a 3.5% down payment. That would be 7k down, but you also may need closing costs unless seller covers them. Closing costs on a 200k property would be anywhere from 2-5%. At max, that's 10k so you'd need around 17k in the worst case scenario. Best case, the seller covers all closing costs and you only put down 7k which means you're good to go now.

Good luck, message me if you have any questions. I'll answer to the best of my knowledge(however limited it may be).