All Forum Posts by: Brad Crumpton

Thanks John.

My wife and I are both 780-800 credit score folks, and would never even consider missing a payment on something.  So I value credit score pretty highly.  I just wasn't sure what services would provide the best overall screening and be sure to catch any past evictions. 

Agreed with Sue.  We use vinyl plank flooring in our units.  Great looking, water proof, wears well, cleans up easy, and it's very affordable.  

We pay $1.39 a foot for it and do the installation ourselves.  Add a bit for quarter round and some elbow grease, and you have awesome looking, durable floors for bottom basement prices.

Wife and I just got into the game last year.  I want good reports for criminal & eviction history.  I'd prefer to get their email and just send them a link rather than filling out a paper application.  What are my best options for good reporting?  I read the sticky, but it's 7 years old and I'm not sure if those companies are still the best option or not.

We only have 2 properties, so i'm not looking for anything with a monthly fee.  Looking for pay-per-use service.   

Thanks in advance.

A lot of it depends on what is standard for the area and what you can do affordably. It's not going to do you any good to add a fence if it's not standard for the area, but it will subtract from your value if it is normal in the area and you don't. We did our first BRRRR last year and never dreamed we would put granite in. But we found a guy to do the kitchen and bath for $900 if we ripped out the old stuff. No-brainer for both refi value and long-term maintenance. Though it wasn't standard for the area, it more than made up for it in value on the refi.

We are doing our 2nd now and it's quite a bit easier to know how to make these type of decisions.  But we're still not experts.

I have not - I don't know anything about driving for dollars or meet ups. I have tried to get with a few wholesalers. I'm on their email lists but their price is high/ARV/estimated rent are all high and their estimated repair costs are low.

My fear with the refi isn't so much that the extra resulting cash flow would be a problem, but rather that the cash I would have into the deal would prohibit me from making other deals in the near future. We don't have huge cash reserves. I do have an existing HELOC on my home that I'd use to pay for this deal, but it would be close to tapped out before the refi. I don't hate your idea of putting a HELOC on it down the road.

Thanks for the reply. My wife and I are small fish, and aren't trying to change that. We want to get maybe 2 properties a year for the next 8-10 years and then use that as retirement. Problem is finding deals at that rate is difficult. Our first property was on MLS that we did as a BRRRR. But we've had major issues getting anything from non-MLS. I've used facebook, tried to work local connections, and never had a serious lead.

So now we've found another deal on MLS, but we'll have to do rehab as cheap as possible and then get good valuation in order to get the cash-out refi to get all of our money back. But if all of a sudden lenders go to 60% LTV, then we could easily end up being out $20k and that would be catastrophic for our ability to get more new deals in the near future, and all that happening at a time when there could be some good deals to be had. But this property we're looking at would be easy rehab and an easy one to find renters for IMHO, and I'd never pass if I knew the LTV would stay at 75% since at most we'd be out $5k on a good cash-flow property.

I have contacted a couple lenders to see where they're at right now and what they expect in the future, but I suppose nobody has a crystal ball....

Self manage - we got our realtor to help us with the first contract - going alone after that.  

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $79,500
Rehab Costs: $8,500

ARV: $120,000

Cash-out Refi: $90,000

Bought an older home in a small town near us.  New paint, floors, kitchen counters, some subfloor repair, landscaping, foundation leveling, and clean-up, and it turned out great.   

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

My old boss retired at 55 with around 40 properties around town.  Hasn't touched his 401k or pension, and goes on a vacation every month, drives a nice car, and plays a lot of golf.  

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

MLS - it was listed too high and had been on the market a long time so we lowballed and pushed them down $15k. I need to improve upon finding deals outside of MLS to give myself more margin in the future.

How did you finance this deal?

$40k 401k loan, $30k savings, and borrowed $20k from friends that was paid back when the refi went through.

How did you add value to the deal?

Rehab - a month straight of working 5am to noon, leaving and working noon til midnight on the house.  

What was the outcome?

Got a renter in the day after we finished up, and they've been mostly easy to work with, outside of adding a dog without requesting permission or putting it on the lease. But I've seen facebook pics and the house looks to be in mint condition, so I'm not sweating it.

They're actually leaving the lease early because of the virus situation (daughter had to come home and live with them, so their bed is in the dining room and it's just not enough space), but we got another renter planned for July 3, and they're leaving July 1, so everyone is in decent shape. I know they'd like to be out sooner, but that was the best we could do.  

Given how quickly we've found renters, I think it's possible we're renting too cheap, but we've got good renters, good cash flow, the house is taken care of well, and very little down time, so I'm sticking with the "grateful instead of greedy" approach.

Lessons learned? Challenges?

Stop depending on MLS to get deals.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Agent - Allyson McClurg in Rockwall - fantastic in all respects

Mortgage broker - deal went south with my first lender, but Jerry Padilla stepped in and handled the refi and it went really smoothly - would highly recommend.

Wife and I are recent entrants into REI. Bought our first property last year off MLS and turned it into a BRRRR project. Now looking for our 2nd. Got a contract on a USDA foreclosure on MLS, but it's really borderline on being a BRRRR property, even at current valuations. If values drop due to COVID, it would be difficult to get 100% of our money back in the refi.

I've heard that you have to wait 6 months from purchase to do the refi - is that true?  We did on our first one but I'm not sure if that was a lender-specific requirement or something else.  

How are lending rules impacted due to COVID and are they expected to stay that way long term?  

Well I'm out of the mortgage game right now. We got a HELOC done a few months ago and we'll use that cash to buy this 2nd property if the offer is accepted, then do a refi after the rehab. Hopefully guidelines have loosened in a few months. Fingers crossed...