All Forum Posts by: Assaf Furman

@Bryant Amundson I'll try to elaborate yet keep it simple:

B for buy: You're looking to purchase a property at a price that adheres to the 'flip formula': ARV*0.7-rehab costs. You want to buy using hard/private money because that will give you the advantage of fast closing and construction costs. Depending on the lender, you may buy a property with even 10% of purchase+rehab.

R for rehab: You want to rehab a property to the market standard in order to get the highest appraisal possible, and of course to have an attractive rental that would rent easily. Once the rehab is done you can add that 30% equity to your net worth.

R for Rent: Set the rent price so that it will be reasonable enough to attract quality tenants, but to cover the mortgage and expenses.

R for Refinance: You want to pay down the 1st loan and have a lower rate-longer term mortgage instead, so you do a cash-out refinance. That's when an appraiser comes to appraise the property and the bank will keep 25-30% equity (down payment of sort) and pay you 70-75%.

Since you stated you're just beginning, I suggest this: First focus on finding opportunities, forming a team and understanding the basics of a rehab project on all its aspects. After you have everything lined up you buy the first property, do the rehab, and when it's getting close to the finish you can then decide whether you want to sell it or refi and rent. The beauty of this strategy is that you can keep all options open.

I've found this article, not sure how accurate it is or how extensive the research was done, but it's definitely something worth considering when entering a rental market or choosing one.

How much did you list it on AirBNB for? 

@DeMarrius Payne I believe Lima One Capital works in that area

@Andrew Bertram There are several ways to turn equity into cash, you basically borrow against it or sell it to another party. To maximize the cash out from refi look for an equity base lender that will take the current appraised value, and then most likely will give you around 75% of that value. Just remember to take into account the closing costs that will incur. Other than a bank you can borrow the cash from a private investor in a similar manner only here you negotiate with a person rather than with a bureaucrat; you write a note which stipulates the terms and conditions of the loan that works for the both of you, and then you may or may not use the property as collateral. Another way would be to sell that equity to an investor, and then he'll simply be on the title and be paid out of the rent and/or sale and/or depreciation - whatever works for the both of you.

To take money ouf of your home you can cash out refi in a similar way or take a HELOC.

Th best way to find local wholesalers IMO is by attending REI meetups. Moreover you can search Biggerpockets for your area's local forums and browse the group members looking for wholesalers. Another way is to go to Craigslist to your area's RE for sale listings and you'll see ads such as "We buy houses for cash" or "Looking for cash buyers". Some (if not ALL) will be wholesalers.

As for factoring in the tax for your cashflow projections, all you have to do is add a line item for the annual tax you'll be paying and deduct it just like you would do with any other expense.

@Alex G. try vistaprint.com

@Kyle Jansma That would vary between states and regions. Call any title company/attorney and they would tell you.

Another thing to remember is that when you plan to BRRRR you can always change strategy and sell the renovated property if circumstances change (for example if you need the money or if a better opportunity comes along).

@Kerwin Montilla I'll start by saying that "right price" is very individual and depends on what you expect from this property; do you want it to generate cashflow? appreciation? a little bit of both? I know investors that would buy a property with negative cashflow just for the tax benefits and potential appreciation.

Now, let's assume you want cashflow and you have a certain cap rate in mind. What you now have to do is to analyze properties in your target area to figure out the expenses, and then work backwards to derive the maximum purchase price.

@Nathan Fesnak here's a partial list of questions I'd ask a property manager:

1. How long are you in the business? how many properties do you currently manage?
2. What is the full scope of services provided?
3. How do you screen tenants?
4. How often do you inspect the property? what do you look for?
5. How do you handle late or no payment?
6. How do you handle tenants who deviate from the contract?
7. How will the eviction process work?
8. How will maintenance requests be handled?
9. What dollar threshold should we set before I need to approve the expense?
10. What software (if any) is being utilized, and will I have access to it?
11. Do you have a large network of contractors?
12. How will monthly reporting be handled?
13. What will our communications look like (how often, technology used, etc.)?
14. What were some of your mistakes with investor's properties? how can you help avoiding it in the future?

The last question is the most important. If I hear there was none  the conversation ends at that moment.

The best thing any property manager can do before taking on clients is to purchase and manage their own rentals and put systems and processes in place that can be scaled to a larger portfolio of properties. 

@Russ M. To me it looks like a dyslexia which points to nothing. My brother writes the same way and he's one of the smartest people I know with great attention to details.

https://www.biggerpockets.com/files/category/spreadsheets