All Forum Posts by: Bonnie Low

Congratulations!

Hi @RyanJohnston - we do use wholesalers sometimes, but that said, we NEVER use their estimates. We just use them to find the property and the motivated seller. We tell them specifically what we're looking for in terms of property location, type, value add potential and condition but if they find something, we visit it ourselves to do the walk through and run our numbers. We also have a RE agent we work with frequently who provides the ARV based on her knowledge of the market and our style of renovations. But, if you're not into working with wholesalers, you might consider developing a relationship with your local building department. We've been really successful creating relationships with our building inspectors and code enforcement officers who are seeing the types of properties we're interested in. The City is very interested in having run down houses improved and they know we can get it done. So they often point us in the direction of properties we might not otherwise be aware of. It's just another way to have more eyes out there.

Hey, @AshtonFoster - welcome! HUGE congratulations for being a BP member already - you are waaaaaay ahead of your peers, my friend ; )  I am so impressed by the numbers of young people I see who are thinking strategically about their future, have the energy and hustle and are willing to reach out and ask for help. All that bodes well for your future, no matter what direction you go in. Consider doing various jobs in the REI space. That could be working for a property management company, a broker, a contractor, an investor, a lender...basically anyone in this space. Each of those is relevant when you become a real estate investor. and you're young enough to get some exposure to each and decide which you most want to leverage for your future. It will also help you develop some valuable contacts and build your network while you earn some income to invest with and build your credit. A great place to meet them is at your local REI meetup. Start putting your name out there. Meet people. Offer to help. Ask questions. Don't be intimidated because you're young. Most investors are more than willing to help someone get started. Best of luck to you!

@Teri Feeney Styers that is gorgeous! Love it!

Just like others have said, there are good ones and bad ones as there are in any other area of life. We've been fortunate to work with good ones. What I appreciate is their willingness to pound the pavement and knock on doors. Two things I don't want to do, but it's increasingly more necessary when MLS deals won't cut it. And sometimes they're willing to find a buyer for a home that most agents don't want to waste their time showing - and that happens to be just the type of project we like to tackle. So, yes, they can bring value.

I personally believe we have to keep in mind that what a candidate campaigns on doing and what they're actually able to do are two very different things and almost entirely in the hands of Congress. Eliminating the 1031 exchange would hurt, but what is the likelihood that actually happens and what does it actually end up looking like IF it really did happen? For example, would it be full elimination? Elimination over a certain property value? Elimination only if your income base was at X$$'s? Would it be a phase in? We just don't know. Excessive printing of money - which is happening with the current administration, the previous administration, and will probably continue with the future administration - is a much bigger concern for me, as is the position of the US $ as the world's reserve currency. 

Yes, we were able to get a HELOC shortly after the start of the whole COVID thing. We only have 1 local bank that is doing them but the terms were really good and the process was simple. All the big banks I called first gave me the same answer you got but one finally referred me to this small local bank I had honestly forgotten all about and they were more than happy to do a HELOC with us. Good luck!

Several years ago, we were able to make a purchase that qualified as a "second home" as opposed to an investment property and, in that case, only had to put 10% down. It was only our 2nd mortgage (which yours would also be) so it qualified as a second home whereas someone who already has multiple mortgages probably wouldn't be able to do that. The down side of that is that with only 10% down, you have to carry PMI and that can eat away at your cash flow. But it's worth looking into if the cash flow still would make sense. Note: we also had family in the area we bought this property in and it had duplex potential so we could rent out one unit and keep the other for our private use. That's why the lender was able to justify it as a second home. Just something to explore...good luck!

@Jason Gettler - I should have mentioned that we're not doing new construction on this one. It's already a detached garage that has water, power and sewer on site. This is more of a cosmetic conversion to an ADU. We also do a lot of the work ourselves. For us, the power of this deal is in the additional cash flow it will generate. Our initial BRRRR will not include the finished ADU so we won't be pulling that $ back out until we eventually sell or do a refi again later down the road.

The ADU you built sounds like it cash flows well, but it doesn't sound like a BRRRR if I'm understanding it correctly because he sunk more into the build than the comps are putting the value at. So there's nothing he can pull back out. That is, unless he's got a lot of equity in the main house on that property??

@TeriFeeneyStyers we actually have already had someone from the building dept out there to look at the site. We would never proceed without that important step. Fortunately, everyone in the City building department has been just amazing to work with (and I know what a rarity that is!) so they've been more than happy to help. This town has seen some really rough times and the City is putting a lot of effort into revitalizing it. They are really appreciative of investors who are turning around eyesores and dangerous properties. That's one of the reasons we like this particular niche so much.