All Forum Posts by: Brett Hearn

I'd say play with the calculator as well.  Watch some videos of @Brandon Turner doing examples of deal analysis calculator. I analysed lots and lots before I finally pulled the trigger, but I’m glad I did!  I taught me a ton. Once you learn the numbers a bit you can apply to all markets. I have a duplex out of state and a few locally. Have fun man.  

@Marisol Rodriguez, are you looking for managers for your units in Hanford.  I have a couple of SFH in town that I flipped and turned to rentals.  Are you originally from the valley or looking to get into an affordable market?   Have a good one. 

@Bruce Lynn @John Underwood 

Bruce, I need to go on title in order to qualify for the loan so we can do a cashout refi. In order to do a cashout refinance one has to be on the title for at least 3 months to season. So says the financier. Then I would have a mortgage (170K) and some cash 85k of which I can then pay out a family member and own the place free and clear. Of course there are many tax implications here and even paying family out over some 6-7 years is something to think about. $14K every year without paying gift tax, Cashout refinance is not taxable event so I think I'm good there. It's the ol man I'm not wanting to get screwed here. He is trying to give us a gift of his hard work of paying off the SFH. I just want to capitalize on the equity that can be done threw rehab and leverage out the property so we all benefit.

John, thank you.  I am researching that exactly now (JTWROS) I was thinking that as well

Hello out there,

General question for you all. What are the repercussions for me going on the title of a SFR which my father owns with no debt on the property (currently appraised for 175K. The plan is to fix it up in 3-4 months and cash-out refi for 75% of the appraised value.

I was told that any notary can come and put me on the title with my father, but Title company won't get involved? why?

Also, the financiers said that I need to be on title for at least 3 months in order to do a cashout.

Ultimately, what are the repercussions for me going on title with my father now, as he is still alive? Will it effect a potential sell of the property in the future.

Number breakdown:

Appraised for $175K

Rehab:              $30K

ARV: $230K

75% ARV= Cashout $174K

Put property into a 30 fixed at 5-6% and have a loan on property.

Any kinks in the plan?

@Dave Van Horn thanks for the shout out invite David!  I'll be seeing you in Oakland at J. Martins event.  It's a bit closer to home. Can only do so many events during the year.  

You almost could have turned that into a Duplex Huh?  Looks nice though, good exit. 

@Alex Smith

This question depends on so many elements.  I feel like one has to pick something, study the heck out of it, and jump in.  A lot of your question depends on what market you are in as well. 

If you want to compound money overtime, I think the classic BRRRR that everyone talks about so much on these forums, will accomplish that if you buy right, and understand each step in the process and what has to happen for you to hit the numbers you are looking for.

I personally think the auction idea would be a nice option, you having a high risk tolerance and all.  Buy something for cheap with cash, make sure rents will make the 2% rule (or whatever #'s your looking for), and over budget for the rehab just to be safe.  Then Cash-out refi as much as possible of what you put into the property, and roll that over into something else, or payback where ever you got the money.

That is simply one idea, and it can be done in a number of ways.  The $50k could be used as a down payment on a distressed multi-family, for example.  If you have some experience this might be a better option.

I tend to think the market, in general, will be stabilizing soon but markets are so localized. A lot, I think, depends on what your market is offering you. Kind of like if you were a quarterback and you had to audible in the middle of a snap count, in order to read the defense and call the play to match what they were giving you. Real estate is much the same way. Maybe a flip is in your sites. Buy a cheap, in distress, property with cash and budget a rehab that makes sense with comps in the area for an ARV, make the profit on the sell and roll it into another.

Basically you have options it all depends on your game.

@Marian Smith

The area isn't really that bad and I do have the security doors, and I actually lowered my deposit to a little less than 2 1/2 times the rent so....I also had a guy who actually paid half of the deposit, and I was going to let him pay the rest later, but he backed out last min. as well ahah.  Thank you thank you thank you for your "felt pads disc moving thingys".  It's a vinyl floor but still...!

@Linda S.

Sooo many great suggestions.  I have covered a few of them but lots of Gems in there for sure!  Do you find that on the M2M people end up staying much longer?  I guess I was thinking that if I did M2M the turnover time/energy/money (locks, cleaning etc.) was just not worth it.  Yet, I feel like once someone was in the unit they would realize its not that bad of a neighborhood, and I'm a reasonable guy who cares about reasonable customer service (with boundaries of course).  If there is a problem my Dad and I are on it!  And I'm pricing out the fence now, even though it's taking me over budget on my initial rehab projections. Thanks again.

@Matt P.

It's that stigma I guess, but like I mentioned earlier in the post, I talked to quite a few very polite people on the phone asking me if I accept section 8.  I know that doesn't mean anything at all, but still....@Brian Garlington sounds like your killing it with that model as well so..thanks again everyone, what an awesome community.  I was feeling a little alone in this game but clearly I'm not.  Thanks.

@Ron Fletcher you know, I suppose I have a negative idea about the quality of tenant.  Maybe I will reconsider.  I know that the rent is pretty much guaranteed but how good is the government at holding tenants to a standard, and how strict is it on my end.  The property is in really good shape.  Everything was redone and crisp.  I will look into it. Why not at this point. thanks.

@Caleb Heimsoth yeah I usually work with people with credit issues.  I know that credit scores can misrepresent actual financial history.

@Sam Shueh, thank you for the insight. Have lowered the price a bit and we'll see where that takes us. 

@Filipe Pereira 

Hey Filipe, I know this is and old post and I am dealing with this exact problem on trying to screen people for my 2nd unit that I  am trying to rent out.  So many bad leads and I have talked to at least 40 people on the phone calling about 5 people a night, after work, trying to pre-screen and weed them out.  I'm going to dive in and see how to make this work.  Not very techy but we'll see how it goes.  Thanks a million.