All Forum Posts by: Blake Edwards

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $50,000
Cash invested: $25,000

Contributors:
Greg Edwards

Another BRRRR!
$50k Purchase
$25k Rehab
ARV of $108k
$345/month cash flow (projected)
In the middle of it right now and will post more info/details/pics as they come!

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

We are BRRRR'ing and this fit the mold!

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

We negotiated with the owners and stayed on top of them to be in constant communication

How did you finance this deal?

Bank

How did you add value to the deal?

We will be adding a 4th bedroom
New roof
New floors
New paint
General updating

What was the outcome?

In the middle of it right now. Will post more info/details/pictures as they come

Lessons learned? Challenges?

It is always a challenge, the key is to stick with it and have an abundance mindset

@Eric B. - I would say your numbers have to work.  I'm sure you have a criteria in mind as far as cash flow or projected appreciation.  I would identify a range or purchase prices for properties that will fit within your criteria.  You will quickly see which properties will fit (or not fit).  You can adjust and start to narrow down those that will work for you.

@Kristine Lynch not a problem! If you want a great recommendation for a rockstar agent up there in the Roseville/Sacramento area, feel free to shoot me a PM. Let us all know what you decide to do!

@Kristine Lynch not a problem! If you want a great recommendation for a rockstar agent up there in the Roseville/Sacramento area, feel free to shoot me a PM. Let us all know what you decide to do!

@Vivan Bhalla - Welcome to BP!  Congratulations on looking into your first investment property.  

Here's a couple questions we (The @David Greene Team) always like to ask our clients when interested in investment properties regardless of their goal.

Are you pre-approved?  I ask because that is a big factor in identifying and becoming engulfed in research and properties.  No need to travel down a path if it is not the right fit for you.

Will you be living in this property if you bought in the U.S.?  I ask because there are House Hacking opportunities a plenty out there.

Where have you looked in the Bay Area?  While the sticker shock may drive some away, there are creative ways to cash flow, and make a property work for you.

Lenders can work magic and have a lot of programs to get you into a property with not a lot out of your pocket, so it may be worth it for the appreciation alone.  It is up to your appetite.

@Scott Pearson - Why do you suggest he move?  There are opportunities everywhere, it is simply a matter of making the right property work for you.

@Kristine Lynch - That's awesome!  Even if you had to come out of your pocket a couple hundred dollars on the original house, it may be worth it as you would have two homes - One where the entire mortgage is paid for, and the other where your can throw that extra cash flow (however small it may be) onto the mortgage of the new home.  You essentially have two homes for the price of one in Northern California (which is unheard of).  

You are in a good position however, as if you sold, you are able to walk away with $100k tax free money to put down on another home if you wanted.  If you didn't want to, like you say, you move into a home where half your expenses are covered.

If it were me, I would go with the two homes which are not only appreciating assets, but the tax breaks alone may make it worth it for you.

@Kristine Lynch Exciting times!  If you rented out all the rooms once you moved out of your current home, would it cover your mortgage?

If you didn't sell, do you have enough cash for the downpayment on a new home?

@Raul Lopez as @Joseph Firmin said read some books to get the basic concepts and do not try to push anything onto her that you or her don't FULLY understand.  @David Greene does a great job at breaking down concepts so they are easy to understand, but I am a bit biased ;)

I would try to get her on board to see the benefit in real estate, rentals, and passive income. Then I would explain the BRRRR strategy to her as it is a bit more involved and seems complex on the surface. If she (and you) have some good fundamental understanding of real estate right off the bat, BRRRR should be easier to digest.

Some private money and Hard Money lenders don't care about your credit.  They only care about the deal.  If you can show them your knowledge and walk through how you will do a deal, and how they will get paid,  you will take a large step to getting funding.

Something I would recommend is calling lenders in markets you are not familiar with in order to figure out what they will ask, what they will want, and what they are after.  By doing so, you will be cold calling an area you know nothing about thus getting into the groove of simply chatting with the most important piece of the puzzle - The financing. Once you have that down, it should be an easy transition to speak to people in your market intelligently about your intentions and plan.  

Hope this helps, and let us know how it goes! 

@Carlos Cuervo - Congrats on getting here on BP and asking questions.  The fact you are on here and involved in the community puts you miles ahead of other "investors".

My question is, how "passive" do you want/need to be? You could get into a property for a low downpayment via an FHA loan, and have roommates to offset a large portion of your income (House Hacking). If you do this for a year or two, you could sell, or refinance and take that equity and buy another property, and rent out the remaining room in your previous home. You do that every year or two, rinse and repeat and before you know it, you're THERE. I realize there are many factors that play into this but again...The fact you are on BP researching and asking questions is a great way to mitigate those factors and risks. Good luck and keep us all filled in!

@Swati Patel - Congrats on looking into the MF space.  There are a lot of opportunities here in California and the "sticker shock" scares off a lot of people who throw their hands up and immediately write this market off.  Here's a couple tips we (The @David Greene Team) tell our investor clients here in California and the San Francisco Bay Area.  

1.  Are you pre-approved?  I only ask because if we have seen many people do a lot of due diligence while analyzing and searching for deals and in the end were not able to get pre-approved at the appropriate price point.  This makes them sour on investing as they were emotionally attached to a property without being able to act.

2.  Why commercial and Multi Family?  I know for buy & hold, but what are your other goals?  For appreciation?  Cash flow?  Having a clear picture of what you are after can really nail down your search and your property type.

3. Are you strictly going after multi families? I ask because to the trained eye, you can squeeze out a surprising rental income number out of a single family home. We often work with our clients to find a SFH which many have overlooked that has great rental potential.

4.  Multi Families are very present in the East Bay, and Oakland area.  The South Bay, San Jose area they are few and far between.  The ones that do pop up are in not spectacular areas and are usually overpriced because of lack of inventory in the area.  That is why we like to expand our search and look for properties that have great potential.  

When looking, we run numbers, comps, look at pending sales, rental numbers, and analyze for our clients.  That is something a halfway decent real estate agent should be doing for all their clients.  Because of this, we have made great contacts in the area and I believe the best way to search for property managers, contractors, etc is by word of mouth.  

We also hold a number of meetups in the Bay Area fairly regularly and would love for you to come out!

Hope this helps, and good luck!