All Forum Posts by: Blake Harris

@Ellis San Jose

That is what I thought. I just stumbled upon the idea on the internet and was curious. Thanks for the response! 

Can someone explain the velocity banking strategy? I have seen the concept explained as a way to use a HELOC to pay principle only checks to your mortgage as a way to pay off a loan in an extremely short amount of time. Also, could you add the pros and cons of using a strategy like this?

@David Martin

That's a really good idea. I will have to see if someone in my area could be a good partner for that type of deal! Thanks for the response.

@Jaysen Medhurst

I will graduate in 2021. After those 60 days though, how strick is FHA is my real question. Yes, I will move my stuff into the place, but it will be listed as my primary residence. So physically I will only be there for weekends when I come home from college.

@Barry Pekin

I agree, my only point was for those buyers that are across the country. Having an idea as to what a specific contractor in that area is going to charge might be a tipping point for someone to pull the trigger on a deal. But yes, there is an inherent risk just like anything else, that if you recommend a low-quality contractor it could be that same business loss effect as trying to guess the rehab yourself. 

@Jared Smith

Are buying rentals, or are you buying flips?

What I meant by market rent was more so, are there similar properties actually filling a vacancy at the price you are planning on charging as of the last month? Yeah, in theory, market rent may not have changed... but those prices are artificial. People are going to try and cut back with everything that is going on in the world. Your rents are only worth what a tenant is willing to pay. If you are able to stay at your original asking rent more power to you, but getting 100$ in cash flow starting this week for the next year is going to beat getting 200$ of cash flow start 2 months from now. Over two months, at a theoretical $700 mortgage payment, you have to pay your self back for the first 7 months of having a tenant to clear the $1400 you paid towards the vacancy, meaning you would make half the money in cash flow over the next year as you would lower your rent price to fill it faster. 

@Jade N.

You said the property cash flows but is that based on the calculations before this pandemic started, or did you run your current rental market numbers based on the current state of the market? People always need a place to live and interest rates are favorable right now, so I say if the numbers have a cushion to be competitive in this current market you should go for it. Also, as the saying goes "time in the market beats timing the market". 

I am currently attending the University of Missouri, but I plan to work and reside in Kansas City following the completion of my degree. I obviously do not want to tie myself down in with a year-long investment property (minimum before I could refinance out of the FHA into conventional) forcing me to stay in Columbia just to full fill my obligation to the FHA loan of living in the property. What I am really asking is if I buy a property in Kansas City with an FHA as my primary residence and do not rent out the unit I would theoretical be living in, would I be okay legally as my address in Columbia while finishing my degree is not a primary address, but rather just my temporary stay while studying?

@Tyler Hall

Bring out a few contractors to bid the property, then provide the list of the contractors and their bids to an investor that buys the property from you. So they give you an estimate, and the investor gets the names in order of bids, thus you are just referring them (potentially getting them a job, once again acting as the middle man). When you are wholesaling, you could be selling the contract to someone across the country too. Having a list of contractors and bid amounts to provide to potential investors could actually make the deals more appealing to them as they will be able to run their numbers very accurately, and they know they have someone willing to do the work on the place they are about to put their money. So in summary to your question, chances are if they give you a good bid, you are going to send them as the go-to contractor to your investor getting them a job, just as if you would've shopped bids to buy the property yourself. 

Also, I touched on this in my first post, but trying to build a successful wholesaling business is just like any other business. If you screw over an investor with a wildly inaccurate guess as to what the market is charging for a rehab, you are burning a partner and who knows how many more future deals. Opposite to if you establish yourself as a business that is always right with the numbers, as well as going the extra mile of having leads for contractors to hand over to your partners. They tell all of their investor friends, and BOOM, you now have 3,4,5 more investors on your "buyers list" to send new deals to.