All Forum Posts by: Bryce Renicker

Hey Christian, I have a Chicago property that would make an excellent BRRRR. I'll likely take it down myself but would be happy to connect with you to see if it may be a good fit for you instead.

Numbers are the following - purchase price $120,000, rehab $75,000, ARV $250-265,000. Will perform very well with a good Section 8 tenant. Section 8 housing done right is the way of the future for real estate investors in my opinion.

Can y'all recommend a couple of good neighborhoods to look in St Pete? Ideally it would be a single family or small multi-unit that I could set up as an Air bnb or long term rental with the goal of moving to St Pete to live in within the next 5-10 years. Thanks 

Quote from @John Warren:

@Bryce Renicker make sure you also understand how the utilities are set up. Most buildings in Bridgeport would have a central boiler that you would pay heat for as well as potentially one hot water heater as well that you cover. 

4% COC isn't very exciting, its true. The rapid rise in interest rates has shocked the market and made year one cash flow harder to come by. I would argue that if you are buying a good building with a true 4% year one COC (including all your costs) then you might be winning here. Rents are on the rise, and your debt is fixed once you lock it in. If rents go up another 7-10% in the next two or three years (not unrealistic) then you look a lot smarter.

The other side of this is that no one knows where interest rates are going. Earlier this year, we were in the low 6's for most of our clients. Now we are nearly at 8. What if things sag back down and you can refinance? What if rates go up and it gets even harder? 

Ultimately, I think you have to decide how rooted you are in a community and if you are in this for the long game. I don't think this is a good time for folks who want to do a quick house hack and then may move in a year or two. 

 Hi John so sorry for the delayed reply. I really appreciate your response. It is all separate utilities which is great, however, 2 of the units are the wall heater style heating units with the other 2 being forced air. Im actually under contract as of today at 450K. My biggest concern at this point is the level of rehab needed as its a super old building and the units are not in good condition. I have 2 contractors scheduled to come out Saturday so Im hoping that will give me some clarity. Thanks again and I hope to be able to connect with you in the future. PS - do you happen to be actively looking for deals at this time? I was able to source and wholesale a great property in the Austin neighborhood just this September, so I would love to keep you in mind if I come up with another deal anytime soon. 

Hello everyone, hoping I can get some feedback on a 4 unit I am negotiating on in Bridgeport. I feel like the purchase price is a really good deal but I still cannot get a cash flow based off of my numbers. Hoping to get a little feedback on my numbers and to see if anyone has insight in the Bridgeport neighborhood that I may not. 

Purchase Price - $445K with 10% down ($44,500)

Principle and interest (7.5%) - $2800
PMI - $197
Taxes - $705
Insurance - $155
Water - $150
Common Electric - $25
Vacancy 5% - $250
Maintenance 5% - $250
Capex 5% - $250

Total Monthly Expense = $4785

Monthly rent - $5000  - approximately $1300 per unit of (3) 2bed/1bath and $1100 for (1) 1bed/1bath

Rehab cost estimated at $5K per unit so about 15-20K investment in repairs 

So total basis of down payment, closing costs, and rehab is $65,000-70,000

Cash flow = $215/month = $2580/year = 4% cash on cash return. 

Im pulling my hair out thinking this is a bad deal but its well within the 1% rule. Is cash flow really just this hard to find right now or am I missing something ? It feels like a lot of work and risk for such a low return, even though I do know there are other benefits such as loan paydown, tax write off, potential for appreciation, etc. Would love to hear others thoughts and thank you so much. 

Quote from @Mark Ainley:

@Bryce Renicker @Jason Marcordes I know you guys are heavy in Pilsen so you should check out the Latino Real Estate Investors Council.  If you want an intro to Sonia happy to make it.  (https://lreic.org/) 

 @Mark Ainley I would love to get connected with this group! Thank you ! 

@Josh Reighard Hey Josh I live in the area and would love to join! Is there a way I can connect with you about your next meetup? Thanks - Bryce 

Quote from @Michael Brattelli:

@Bryce Renicker I’m in a very similar situation. Mine are not quite at market rent but pretty close and didn’t get to screen them prior. They pay on time every month and dont bother me. I’m tetering on giving a small increase $50-$100/mo and renewing them on a month to month. At the end of the day vacancy and turnover will cost you more. My advice is judge them on their actions/ on time payments and not what you may have missed in the screening process with their credit score. When they do decide to leave touch up the place, screen well, and raise it to current market rents. Good luck

Thanks for the reply Michael. Based on everyone’s response so far I’m thinking I’ll continue with the existing tenants. I really like the idea of a month to month too.. I know there’s the risk of the tenants leaving during winter, but I feel that if they are going to leave they will probably do it anyways. At least this way it seems like if things do go badly it would give the landlord a lot more flexibility, especially given that we live in the same building and that could be a big issue. Thanks for your perspective and good luck to you too! 

Quote from @John Warren:

@Bryce Renicker I am at 114 units and counting, and I have never been able to screen any tenants we inherit. Many are wonderful tenants, some are just so/so, and some we have to part ways with. I generally try to see how they behave the first year, and if I have no issues I don't think about it again. 

That’s awesome, good to hear that you have been through it and it has worked out well. I like that mindset and I think I’ll treat it the same way. Thanks for the reply!! 

Originally posted by @Jonathan R McLaughlin:

@Bryce Renicker You definitely shouldn't do this. Complete your FHA deal. Not that it affects my answer below, but I assume you will live there for a year at least under the terms of the loan, yes?

You don't want this guy in your business and it sounds like a predatory offer to me. You can control/own 100% of a property for 3.5% down but you would give this partner half the equity to save that 3.5%? THAT IS INSANE. 

And yes you would need to start the whole thing over. 

 Hey Jonathan thanks for the reply! The reason I’m interested is because with the low down payment and mortgage insurance the property has a very low cash flow, whereas the numbers work much better on a 20% down deal. I also just don’t love the idea of being in a deal with such low equity starting out, it seems that putting 20% down would feel safer to me even if I am giving up half the equity. However the idea of starting over with financing seems like a big hassle factor ! 

Hi BP Community,

I'm looking for a little advice on a potential down payment partnership. I'm getting ready to close on my first property with a 3.5% down FHA loan, but I now have interest from a partner to be a 20% down partner with me on the deal for a 50/50 split of the deal.

I have a few things I haven’t been able to track down information on 

1. Is it advised (or legally required) that my partner be on the loan? 

2.) Can the partner be easily added to the title/deed at closing?

3.) Would underwriting need to be started over to consider my partner as part of the deal from the lenders perspective?

4.) can my partner give me the down payment and let me close the deal without him being involved and simply have him on the title? 

I think I’m just not sure what the next logistical steps would be if I want to include my partner in the deal as I’m only 2 weeks from closing at this time and most of the lending procedures have already been completed for my 3.5% fha loan. Any thoughts or advice would be greatly appreciated!!