All Forum Posts by: Brad Z.

@David Beard, I have been told by one a local banker here in Cincy that if you have less than 4 financed properties, you can buy fannie mae owned props with 10% down and no appraisal, NOO. He did say he could finance lower priced properties but I would say 30k is probably right at the minimum. The best case is that you find something around 30k that doesnt need much work. You can call or text for his contact info. This type of financing would of course need to include a credit partner, spouse, etc...as you have >financed props.

In 2012 I acquired an additional 22 doors (total of 5 properties) on the buy and hold side. This pushed my total monthly net cash flow well in excess of my day job and that is a great feeling. I also successfully flipped my first two properties at a nice profit. I really like flipping as the analysis and and involvement is awesome. Its also nice not to deal with tenants for a change.

I think the most important thing that I did was really focus on putting solid systems in place from establishing relationships to contractors, property managers, reo realtors, etc... I also spent alot of time on bookkeeping and analysis which is what makes me tick. This has helped immmensly. I think a full time job forces you to be super efficient in your business dealings and will translate well to being a full time investor.

In 2013 I plan to continue to acquire rental units (doors are TBD as I may go after quite a few single families or less acquisitions on larger properties). I also plan to continue to flip properties to increase revenue streams and re-investment capital. I will continue to reinvest 100% of profits for at least another year then consider a career change and new business opportunites RE related.

Interesting Topic. I have a BA in Finance, 8 years of Corporate experience as an Engineer in the Financial Services Industry.

I had a lawn care company also. I guess most entreneurs got an early start!

I have been investing in real estate for 7 years, agressively for 3 years.

We had a pretty solid month

Successfully refinanced a repositioned 11 unit

Closed on two single family rentals and got the rehab started

Put 1 additional single family rental under contract.

Built out 3 year plans for 2 new partnerships we started.

Closing on my first property that I purchased as a flip and successfully executed with a nice profit(fingers crossed, property closes next week). Ill post a full review on this once completed as it was a great learning experience.

I take a hybrid approach. I only upgrade things that are durable and have less of a chance of being trashed. Ex. go ahead and refinish hardwood floors but dont replace cabinets and countertops. Also, dont do anything that will cause re-work. For example, dont put a newer countertops on older cabinets if you can help it. If windows and roofs are on their last leg, go ahead and replace, very little chance a tenant will destroy those items.

We had a hot water line blow under a slab in a finished apartment. We identified it but ensuring all faucets were off, not leaking and checked the water meter to see if it was still flowing water. We never truly identified the leak under the slab but isolated it by process of elimination. We could hear it and feel it when touching the water lines coming through the floor. We fixed it by cutting the water lines in the boiler room and running them through the ceiling into that side of the apartment building. It was a much easier fix than jack hammering in somebodies living room.

@Michael Lauther

We treated it as if my passive partner was buying the property in his personal name then immediately transferred to a newly formed LLC that we were 50/50 members. We documented all terms within the operating agreement. The lender didnt even need to know it was going to be transferred to a partnership LLC which made it very straight forward.

The terms were that he would front down payment and renovation funds. I managed the renovation and property mgmt for no fee until he was paid off. He got 100% of the cash flow until my 50% of cash was paid off. Once we were all square, I managed the property for our LLC at a discounted rate (5%). We take equal owner distributions from our LLC account every 6 months.

On one of the deals, we used a purchase +rehab loan so my partner just fronted down payment funds. On the other 2, we used a conventional note so he fronted down payment and renovation funds.

The properties that we have successfully executed this strategy on are 30k-40k single families that needed 5k-10k in renovations. All are rented for 825-875.

I have only done this with 2 investors and they actually approached me. I also had an existing relationship with them. Just like any friend/business situation, it needs to be the right fit for all.

I have had some success with partnerships (typically a passive partner). I have purchased a few buy/holds this year with partners. They secure the financing and lend me half of the down payment/rehab expenses. In return, I manage the property and they enjoy a passive return that exceeds other investment vehicles available to your average investor.

In short, I get 50% ownership in additional properties with 0 credit or cash in the deal. The passive investor gets 50% ownership and a very strong return on their money.

To be successful, expecations need to be very clear and a strong operating agreement is a must.

I purchased a house 3 years ago, renovated it and a nice family moved in. They are very nice people. I have this play out a few times but when lifetime renters have bad landlords, then they find a well maintend property, with a good landlord. They really do appreciate it. These tenants pay ontime every month, usually early. They go above and beyond with the landscaping and really treat the house like its their own. They were late one time and called almost in tears apologizing. I couldnt believe it, usually I get some stupid excuse and just deal with it.

The challenge in this business at these types of tenants are 1 in 100 at best.

I have purchased from Econo. I had a good experience with them although the QC process was a little uneasy. They seemed pretty upfront and didnt act shady at all IMO. I would highly recommend going above and beyond from a due diligence perspective prior to purchasing.

Also,
I dont believe they will convey title, even if they have it prepared, until you are paid off if you use the financing. I think its likely more of LC structure.