All Forum Posts by: Cameron Pendergraft

Congratulations!

@Marcel Theisen

I've found this post from about a year ago to be helpful and reference it often. 

https://www.biggerpockets.com/forums/48/topics/276...

Hope this helps,

Cameron

@Phil Morris

Personally, I found this article to be helpful and I try to stick with around a flat $185 rather than a % of rents.

https://www.biggerpockets.com/renewsblog/2015/10/1...

Hope this helps,

Cameron

@Brian Bistolfo

In July 2017, we purchased a rental in the Waldo KC area through a bankruptcy auction which already had tenants. What we saw in trying to refi was 25% down and 4.75% on a 30 year if I remember correctly. What we were tripped up on was that the lender wanted to go off purchase price instead of appraised value. We decided to wait and let the property season for 6 months to a year and we'll try again then. Hopefully the difference in interest rates if they go up won't matter since we won't have to leave as much cash in the property.

Hope this helps,

Cameron

@Derek Luttrell

I believe what Thomas was saying is that you take all the money you have for investing and apply it to the principal of your mortgage thereby giving yourself more equity to draw a heloc on. Then, your cash would at least be earning an roi of whatever your mortgage interest rate is. But, the interest you would pay on the heloc if/when you used it would more than likely be greater than your mortgage rate. This could work but there are risks such as if the bank ever cancelled the line or didn't renew it at the end of the term. Plus, your money would then be tied up in your mortgage indefinitely.

Another option depending on your relationship with your bank could be to take the cash you have for investing and put it into a shorter term CD, then open a revolving line of credit with the same bank collateralized by the CD. Your money wouldn't be earning much more than a savings account but it wouldn't be trapped in your mortgage either. And you wouldn't have to pay interest unless you used the line. 

Or, if having your money in a savings account earning next to nothing is a motivator, then use it as a motivator to find a great deal to put that money to use. 

Cameron

@Laura C.

At first glance, it appears your total monthly expenses includes the principal portion of your mortgage. The principal payback isn't a hard expense on a pro forma however it is a negative cashflow. If you remove the principal portion, you'll get a net income figure closer to what the listed pro forma states. Also, the 4,420 mortgage figure appears to have property tax, insurance, and mortgage insurance included but taxes/insurance is also listed separately on your breakdown outside of the mortgage. The strictly principal/interest portion of the payment on a 675k note (700k minus the 25k down payment) at 5% is roughly 3,623.54. Next, the listing says there are 4 separate electric meter. Depending on what is common in your market, this may be an expense you put back on the tenants? Making these changes would help your cashflow figure a little but it still doesn't look like a good deal. One last item is that if you went the owner occupied route, you would be in one of the units therefore your gross rents would be 3,300 instead of the 4,400 you used in your first projections.

@Jason Hirko @Frank Chin

Thank you both for the advice. We are scheduled to meet with them Saturday and introduce ourselves so this will help us get the ball rolling.

Hello Everyone,

My wife and I have recently purchased a SFR property in the Waldo area of Kansas City from a bankruptcy auction. The property had been a rental before we purchased it and the current tenants are six months into a year lease. As far as retaining the current tenants, should we:

A) finish out the tenants' lease which had been signed with the previous landlord and change nothing?

B) add an addendum to the old lease stating we are the new landlords and will uphold the obligations of the old lease?

C) sign a completely new lease with the exact same terms and remaining months of the old lease?

Any advice is greatly appreciated and if there is a better solution that what we're contemplating, we'd love to hear it.

Thank you,

Cameron

@Jonathan Safa

Another item to consider if you go the BRRRR path is that a bank might require a longer seasoning period than just a month or two, so that credit line might be tied up longer than expected.

@Dan Krupa Thank you for the tip on the map feature, that helped a lot.

@Kirk H. It is further south than UMKC, it's around the the intersection of 85th and Tracy.

All in all, this deal probably doesn't make sense. The current rent seems a little high for the area according to a few sources and the crime report was a little unnerving for the return the house would be getting, especially if rent had to be dropped to get new tenants when current tenants move.

I still learned a lot though and appreciate everyone for posting.