All Forum Posts by: Cameron Philgreen

Random question!  It's just recently occurred to me that I'm regularly holding $10k+ in security deposits.  I'm sure many of you are holding $50k, $100k or $200k in security deposits.  What would be a good place to put this money so it's "out of sight, out of mind" and also could get us a little return?

Obviously I / we could "invest" this money for rehabs, maintenance, operating costs, etc, but frankly, I don't trust myself, and I'd rather set it aside until it's time to pay back the tenant.  Any ideas?  CD?  High yield 12 month savings?  What do you guys do?

Hey guys, I have a friend with deep pockets, and we've talked candidly about them lending on our real estate flips and BRRRRs.  He is very new to anything hard money related, so I've actually been answering most of his questions.  I just whipped up this proposal and wanted to see how it "hits you."  Obviously, all of these things can be negotiated. I'm curious if this seems fair to both parties.  Let me know your thoughts!

Lending proposal

For Real estate purchase and rehab ONLY

If hard money loan (no equity)

1 point

8% APR interest if monthly payments

Or 9% interest if we can pay at the end of project

90% purchase, 100% renovation

Interest only payments

Use “construction holdback” (draws as construction happens)

If co-ownership in a flip:

80/20 ownership

No points or interest

90% purchase, 100% renovation

No payments

Split net profit 80% to borrower, 20% to lender

Example: $100k purchase, $50k rehab, $200k sale. Split $50,000 80/20

If co-ownership in a BRRRR

50/50 ownership

No points or interest

90% purchase, 100% renovation

No payments

After rehab:

Refinance with bank in 50/50 LLC based on appraised value

Retain 50/50 equity in property

Split monthly cashflow 50/50

Example: $100k purchase, $50k rehab, $200k value, refinance on $150,000 loan (75%)

$2000/mo rents, $1500/mo debt service, split cashflow $250/$250.

Hey all,

It's been 3 months since I first posted about this idea.  Since then:  Bought the car.  I am $5k away from owning it free and clear.  All business aside, I can't explain how happy I am about the Model 3.  I had my expectations SUPER high, and they have been blown out of the water.  It's amazing.

Anyway, I've had the car for a couple months and just now got my first Turo rental booking.  So now I have a vehicle that is making me money, not taking my money.  Not to mention the gas savings.  Pretty rad.

Obviously this money could have been put somewhere "smarter," (isn't that the case with EVERY investment?) but cheers to living a "lifestyle of retirement" and not contstantly waiting for "next year" or "next paycheck" or retirement."

Hope this inspires some of you in the realm of real estate, business, and beyond.

Thanks for all your feedback and input!  I'll update again as the numbers come together.

Okay it took me like 30 minutes to read through all these responses.  Thanks everyone for all the feedback!!

First off this is absolutely, simply a way to justify buying a car that I want.  I'm not trying to start a scaleable business by any means. I'm just a Tesla enthusiast and I've wanted one for a long time, but I've NEVER had / wanted a car loan and I DON'T want to make a dumb decision.  My goal with the potential of renting on Turo is to simply transform a "dumb" decision into a "smart(er)" decision.

I know there are other costs and that I might barely break even renting on Turo.  I know it's a depreciating asset.  But you have to factor in the fun here.  I know that I can spend the money on a cashflowing, appreciating rental property (which I have and will do that).

It's mostly just interesting that there is potentially a way to drive an amazing, fun car for "free," using similar concepts as real estate rental property.

Also, to be clear, I can afford the payments. If for some reason it didn't rent all the time, I would be fine. I just know that it wouldn't be the smartest decision right now UNLESS there was some way to make money with the car - hence Turo.

Again thanks for all the positive and negative feedback, it's really helpful.

@jason 

@Jason D. thanks for the reply!   Amazing questions.

1) yes $147 per day in Dallas.  I'm in Waco, so probably closer to $90 to $100, but we have a lot of visitors (2nd most in the nation right now), so I'm sure I could swing $600 / mo in rentals and break even.

2) Nothing extra required, but I would opt into Turo's $1M liability policy.  "The policy protects you against lawsuits for injuries and property damage that occur during a trip."

3) For sure

4) Not sure, but for me the fun/economy factor is the kicker here.  It's my dream car, so nothing else would be as exciting.

5) Same as other rental car companies.  You can rent at 21, but you're charged a fee until age 25.

@Sam Teifke good question, it would be the same as any other wreck.

Disclaimer, this post is about a CAR, not real estate.

Talk me out of this:  Used 2018 Tesla model 3.  Was bought new at $61,000, 8000 miles, selling for only $47,000 (30% off).

What if: $10,000 down. $37,000 loan at 1.99% APR (special EV loan). Payments will be $590/mo, which means I could rent it on Turo SIX DAYS PER MONTH and be cashflowing already. Any rented days after that is positive cashflow.

On top of that, we get a fun, economical car that drives itself on the highway.

Talk me out of this, why would I NOT go through with this deal?

Or if you think it's fool-proof, tell me why!

Trying to do this deal this weekend, so respond quickly!

Love y'all.

@Emir Dukic I HAVE SAID THAT BEFORE!!  I think it would work so well.  How many days / month do you have to rent your jeep to cashflow $1?

@Scot Richard hahah, not the response I was expecting on this forum, but I love it!  All things that I have been saying for a while.  I've been obsessed for a little while and I found a great deal in an area where I have family.  I think we're going to see it this weekend.

Do you have a loan on that car, or did you buy cash?  If a loan, what do you recommend?  I want to pay as little interest as possible.

Investment Info:

Single-family residence buy & hold investment in Lawrence.

Purchase price: $125,000
Cash invested: $10,000

3 / 1 single family home that we pay $900/month on. Rent is $1500 so we cashflow $600 / mo. We fixed it up while living in it, so it now has a really charming feel, and a (basically) new kitchen.

What made you interested in investing in this type of deal?

We bought the house to live in, did some work on it, learned a LOT about the buy and hold rental game (why no one ever taught us this stuff, idk). We thought a lot about selling it for profit after 2 years living. Decided to hold and rent instead. SO GLAD we did.

How did you finance this deal?

Conventional. 5% down primary residence.

How did you add value to the deal?

Re-did kitchen, removed 3 walls, over time painted and "improved" every single area.

What was the outcome?

Cashflowing $600 / mo!