All Forum Posts by: Brendan J.

@Ryan Bolt , @John Frank , you may enjoy researching an acquisition strategy called BRRRR. If you do some forum searches there are plenty of posts on BP. The general idea is a flip-turned-buy-and-hold, where you rehab a property and use the created equity as the downpayment (essentially) and then pull your funds out (refinance) to be used again and again.....that way you can buy rentals at a faster rate than your 12m average. Also your ROIs skyrocket because the actual cash investment in each property is minimal....

Best of luck, Merry Christmas!

@Isiah Ferguson If anything, it's the credit score that is inflating the interest rate. I'd pull your credit report and figure out what is contributing to the lower score. If it isn't anything crazy (bankruptcy, etc) most of the late payment stuff wipes clean within 2 years. I'd look at trying to get your score up in that 740+ range to take advantage of the best rates.

Also look at credit utilization. If you're maxing a card or two, pay those down, pull again and you'll be surprised at how that improves the score. I pay my credit cards off in full every month, but depending on what I've purchased that month, and when I pull the credit, it can swing my score 20+ points by itself.

Best of luck to you sir!

@Isiah Ferguson I'd shop that rate around brother. 8% seems really steep for a conventional refinance..... I'd be shooting more for 4.5%, tops 5% in today's market. What's your credit look like?

Congrats @Jacqueline Coombs ! Your money is made when you buy the deal, way to stick to plan!

Ben, just a heads up....you keeping using "LTV" but I'm certain you really mean ARV. Completely different terms and things like this will hurt you when you're trying to build relationships with the bankers you're talking about.

ARV is "after repair value", which is what you're talking about. LTV is "loan to value" which is a ratio referring to the financed portion in comparison to the property's worth.

Again, just a friendly FYI.

Great idea on the signs Jonathan! Jon, have you visited the local Reia's and done some networking asking about the cash investors others know about?

@Joseph Castaneda . I'd look at a buy/hold for this one. @Evan Bell hinted at BRRRR (Buy, Repair, Rent, Refinance, & Repeat) and he's right.

I wouldn't max out on the 70%LTV though, your P&I would be too high to make sure this thing was cashflowing (w/ a little extra cushion). Here's how I would look at it if I was in your shoes....

Rent for $1800, Plan on expenses making up $900 (Management, maintenance, capital ex, vacancy, taxes, insurance, minor utilities, etc...

Refi 149k (only 1k left of your money) for 30 years @ 5%. Principle and interest would be $800/month. This would leave $100/month cashflow, but we aren't close to the fun part.

$1200 annual cashflow (120% returns on your $1k invested)

$2300 annual principle paydown by tenant (230% returns)

$5000 in appreciation at a modest 1.8% appreciation rate over the 1st year... (500% returns)

Total of $8500 in wealth creation (850% returns)....With $130k in equity still in the house. You also have $149k to go buy another property in cash to BRRRR that one as well.

Just my $0.02 Joseph!

Any updates Chelsea? I know it's old, but curious how it all turned out!

@Ingrid Poole - This is the first thing I noticed as well.... the utilities, water, sewer, etc account for 30% of your expenses monthly, and is destroying any cashflow that could be made. Without those included you're looking at expenses making up 40% of gross rents. These need to be paid by the tenant and not you. Let's say you're successful in getting 2/3rds of those fees switched to tenant-pay, and you are left with a 1/3, you're back to the 50% rule.

Run the numbers again to see if you can't cashflow this Duplex out with $200+ monthly at Day 1. Also, about your 12 Year family loan, those are great to have, but most people would look at them as a bridge loan. Something that allows you to purchase and repair a property for cash, and then look to refinance into a conventional mortgage after a couple of months. Debt is too cheap right now to not take every 30year, fixed, low-rate loan you can get.... What does your cashflow do with a 30yr note plugged in rather than a 15yr?

Lucy, any update for us? I'm curious how it's coming along!