All Forum Posts by: Bridgette Delva

@Kenneth Garrett the city rules can definitely be a cash flow killer. That’s one of the things we also like about the suburbs!

@David Baier good pints! There are a few warehouses and also people work in the neighboring town, which is bigger and has more jobs. There is a quite a bit of seasonal vacationing but we don’t plan to target that market.

Hey BPers!

Rural, urban or suburban investments, where have you had the most success with fix & flips? We're currently live in an urban area, have a long term SFR in a suburb outside of Atlanta and working on fix & flip (back up plan would be LTR) SFR deals in a rural area of Central Florida. In our book positive cash flow/profit is king so what should we watch out for in the rural areas?

Hi @Emily Wilson Litzinger if you ask an attorney for advice on if you need their advice, they will always tell you need their advice...but, since I'm not one, I'll say you don't.  You can draft your private loan agreement however you like. We had private loans from a friend and a family member and I just drafted a simple loan agreement doc using a draft I found online.  With our deal we agreed on 10% return but the rate is also up to you; for private money, you have the freedom to set the terms and rate so if you both feel 8% is fair, that works.

If you'd like, I can DM you the template we used.

Hi @Nicole Simmons I agree with Derrick in that one of the best ways to determine how much you can afford is to speak with a lender since income, credit score, down payment, owner occupancy all play a role in determining your options.

I am not sure what you mean by you are "willing to risk losing what I invest" but I would say that is definitely not the best mindset to start investing.  You should to approach every potential investment deal with a thorough analysis to determine if it is worth it.

In terms of getting started, house hacking can be one of the lowest risk options so you could try to find a duplex or small multi-family. BRRRR is also a good strategy but it's not as low risk as house hacking since you need to know (or learn) about renovations; this alone can make it slightly more risky than house hacking mainly because rehab costs can get out of hand if you're not experienced.

If you're considering turnkey, that is definitely a lower risk option but usually not as high of a cash flow as house hacking or BRRRR since you're paying someone else to do all of the work. In any of the scenarios, you need to do the analysis to determine if the deals cash flow and let the numbers speak for themselves.

@Julee Felsman thank you so much for clarifying!

@Rebecca Rios it should not matter that it is an investment property.  If the lender has a social media page or anything where you can post a public comment, that'll usually get businesses responding right away...give that a try.

Hi @Karla Castro we don't currently have any Airbnb rentals but I'll offer up my input for consideration.

You should determine if you will self-manage or use a PM; this choice has significant implications on your cash flow.

With long term rentals, you will have less turnover, which usually equates to lower costs in the long run.  You have the stability of one tenant and you know when you're going to get rent paid so the vacancy rate will be lower.

With short term rentals, a few things:

• You need to determine if your HOA allows short term rentals, if you have one
• You need to find out the local laws and requirements for short term rentals, if any
• If there are laws/requirements, you should note if there are any cost prohibitive ones
• Who will manage your & cleaning?  I know you can charge your tenants the cleaning fee but just making a note.
• Who will manage your turnover? Someone has to be the PM and the frequency of turnover with short term rentals would cost you more than a long term
• What does Airbnb (or VRBO) charge you?
• What is the vacancy rate for your area with STR?

I'm sure there are many other things but the bottom line is that you need to do your cash flow analysis to make sure both scenarios would cash flow. You could look at what your "break even" cash flow scenario would be with STR and then use that as a guide.

You could probably find dozens of articles about the costs you should consider for STRs so maybe start there and then do your property rental analysis to help you know which path works best.

@Simon Obas check out your local market to see what's going on and what other landlords are doing; check your local Zillow and Realtor.com listings.  Pay attention to the listings that are pending, # of days listed and the condition of the homes.  If you want to rent quickly, you have to be competitive in cost and cosmetics too.  If your market is competitive, you may want to consider a discounted rent or free month of rent just to entice prospects. 

Make sure you've gotten all maintenance and minor upgrades completed before you take photos.  Fresh, neutral paint, LED light bulbs, well manicured lawn, pressure wash the exterior where needed. 

Once you've got the basics done then you want to take superior quality photos, which can be achieved good lighting and any recent model iPhone or Samsung.  Good quality photos are free to take but so many landlords skimp in this area.

Price the unit competitively, which means you have to know your market - or you can talk to a local PM and ask what they would rent it for.

Of course, the place needs to show well so make sure it's clean, well lit and smells good every time you show a prospective tenant the place; first impressions mean everything for renters because they tend to move quickly when they find one they like.

I assume you have a good standard lease agreement but if not, there are templates for just about every state in the BP FilePlace - https://www.biggerpockets.com/files

If the unit is move-in ready, you've got good pics and know how much to rent it for - the next step is to list it!  We use Zillow, Cozy (which links to Realtor.com) and we always print nice quality yard signs from VistaPrint.  The signs are cheap and look more professional that the ones you get at your local hardware stores; of course, those will do the job too but it's your call on which yard sign you want to use.  Zillow & Cozy have screening and application capabilities so if you want to use them, it's free to you but the tenant pays the $29 fee.

Good luck!

Hi @Rebecca Rios if my math is correct, you have about 23% equity. This is based on the refinance loan balance of $135K and your current loan balance. You are correct in that the law indicates that the PMI must automatically be removed from Conventional loans once the balance is at 78% or less than the original loan amount.

However, if you have a FHA loan, this is not the case and you pay PMI indefinitely or until you refinance into a non-FHA loan. I would continue to attempt to get ahold of them until you get it resolved; you may want to find out if they are required to give you a refund or back pay. But since you are looking to refinance, your efforts may not be worth it.