All Forum Posts by: Cameron Rockwell

Being a property manager will certainly get you off to a good start to learn the business. I agree with Derrick get that credit score up start saving up for a down payment and learn how to analyze a market/deals in that market. 

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $160,000
Cash invested: $2,250

Just bought a new primary residence leveraging my VA loan for the second time. It is a 3 bed 2 bath with 1220 square feet. I have just moved in two other roommates making this a single family house hack that cash flows about 100 dollars a month when I manage it myself (Includes 5% vacancy 5% management and 8% capex). I also get to live for free which is a nice addition.

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

I wanted to grow my portfolio and gain more experience.

How did you find this deal and how did you negotiate it?

I found it on the MLS 10 seconds after it was posted. My market is very hot right now so i had a LOI ready and sent over in 15 minutes. Other offers came in with an escalation clause but since we had a 5000 earnest money and my agent was taking less of a commission we got the deal.

How did you finance this deal?

VA loan second entitlement.

How did you add value to the deal?

Added value by moving two roommates in before my first mortgage payment was due. I get to pocket almost a full month of rent minus expenses without a mortgage payment.

What was the outcome?

Outcome was that I acquired a turnkey property that will cash flow as a traditional rental as well as by room.

Lessons learned? Challenges?

The seller did not want to make any changes until after the appraisal was complete. This gave him a short timeline to complete all PICRA items and make sure the house was ready to purchase. I would drive past the property on my way home and see that there was nothing done. As we approached closing I thought there was no way he could get it all done. I learned to not stress about something like that and accept that if we needed to delay closing we could.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My agent was an amazing asset in this transaction and she was able to manage behind the scenes issues that I did not even know about. Every investors dream is for things to go smooth which is exactly what she managed to do. Every aspect of the closing process went according to plan. I used the same loan officer as my first VA loan and it went better then expected. Truly goes to show the power of a great resource team.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $160,000
Cash invested: $2,250

Just bought a new primary residence leveraging my VA loan for the second time. House is a 3 bed 2 bath with 1220 square feet. I have just moved in two other roommates making this a single family house hack that cash flows about 100 dollars a month when I manage it myself (Includes 5% vacancy 5% management and 8% capex). I also get to live for free which is a nice addition. I have started a consulting business to help people learn how to manage single family house hack properties themselves and this plays nicely into that model to help grow my experiance.

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

I wanted to grow my portfolio and gain more experience.

How did you find this deal and how did you negotiate it?

I found it on the MLS 10 seconds after it was posted. My market is very hot right now so i had a LOI ready and sent over in 15 minutes. Other offers came in with an escalation clause but since we had a 5000 earnest money and my agent was taking less of a commission we got the deal.

How did you finance this deal?

VA loan second entitlement.

How did you add value to the deal?

Added value by moving two roommates in before my first mortgage payment was due. I get to pocket almost a full month of rent minus expenses without a mortgage payment.

What was the outcome?

Outcome was that I acquired a turnkey property that will cash flow as a traditional rental as well as by room.

Lessons learned? Challenges?

The seller did not want to make any changes until after the appraisal was complete. This gave him a short timeline to complete all PICRA items and make sure the house was ready to purchase. I would drive past the property on my way home and see that there was nothing done. As we approached closing I thought there was no way he could get it all done. I learned to not stress about something like that and accept that if we needed to delay closing we could.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My agent was an amazing asset in this transaction and she was able to manage behind the scenes issues that I did not even know about. Every aspect of the closing process went smoothly. I used the same loan officer as my first VA loan use and it went better then expected. Truly goes to show the power of a great resource team.

Investment Info:

Townhouse buy & hold investment in Virginia Beach.

Purchase price: $155,000
Cash invested: $1,100

Just moved out of this house as a primary residence. House is 3 bedroom 2 and a half bath with 1428 square feet. I rent out all three bedrooms separately and manage myself. With PITI, Maint, Capex, and vacancy I cash flow $445 a month. Budgeting for management still puts me at $245 a month in cash flow.

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

Listening to the BP podcast and using test ads to find the strength of the rent by room market in this military community.

How did you find this deal and how did you negotiate it?

I found this deal through the MLS using a non investor savvy agent. We made 37 Letter of intent offers before acquiring this property.

How did you finance this deal?

I was able to use my VA loan and put 0% down. I got 3.5% of closing costs from the seller and ended up paying $1100 to close on my first home.

How did you add value to the deal?

I owned the property for a year and did cosmetic repairs such as new paint updated appliances and renovating bathrooms. We added an estimated 10k in sweat equity based on local comparative market analysis.

What was the outcome?

Outcome was owning my first property with a little over 20k in assessed equity. I was able to put down 1100 and about 5000 in repairs earning a 90% return on investment my second year owning the home. I was also able to cover 110% of my living expenses in my first year while I was renting out the master bedroom.

Lessons learned? Challenges?

Picking Tenants is one of the most important skills to become a landlord. I also found that giving the tenants options for rent terms made them feel like they had a larger part in the decision. Annual lease $650, Semi Annual Lease $675, Month to Month $700

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Bigger Pockets professionals and contributors played a huge role in my success as a landlord and on this deal. Using my VA loan through Veterans United as well as my agent working with me to get this deal was critical to the execution of my investing.

@Tommy S. I agree with @Whitney Hutten if a tenant is occupying a property chances are you can get a conventional loan with 25% down. Hard money on a 75% LTV is not actually a home run deal (its marginal at best) so that 9 months would certainly eat into your profit. Most HML's wouldn't even consider lending on it in normal circumstances. I would not recommend flipping a home while a tenant is living there. That is a horrible way to start a relationship. Instead of using hard money at all there are other ways you can fund the rehab like business credit, private money, Rehab loans, etc. Make sure it cash flows as is and then evaluate your next steps from there. My personal strategy would be to take a HELOC out for the down payment on a conventional loan. If you have credit left over use it to fund the rehab as well. If not use business credit or private money to fund the rehab and then refinance once everything is fixed. Hope this helps.

@Jared Sandler Great post with solid info. Could easily be a blog post. You should consider writing for BP if that is something that interests you. Thanks for sharing!

@Trevor Dominique Another thing to consider is that you could do a 12% flat interest rate (seems to be standard for HMLs) That way if you are paying 7% annualized on the money in theory you could do two deals with that money over a year spread. This would mean that you would make 12% per deal per 6 month term. Do the math and that is 24% annualized per deal and 48% annualized for both and you are using the same line of credit. So instead of a 5% spread you would make a much larger spread assuming you assigned only a 6 month term loan. 

@Vincent S. Have you thought about just using hard/private money for the purchase and then refinancing into a traditional mortgage. To be completely honest this sounds to good to be true. Make sure the estimated appraised value is really 800k. You can do this by having an agent complete a CMA for you. If all the numbers really worked on this deal I have no reason why a lender would not lend on this however since the deal seems to good to be true that will certainly raise some red flags. Unfortunately you are going to have to have some skin in the game but there are other creative ways to cover that so just do your due diligence.

@Michael Schumpert I completely agree with @Taylor L. I just finished reading that book and it completely changed my approach. Certainly worth the read!

@Samantha Gehin-Scott It is important to note not all hard money lenders are the same and some have drastically different terms. For example, I have seem some HMLs that charge 15%, 3 points up front, interest only payments each month and 15% down. I have also seen them charge 10% no points, interest differed with little to no money of your own. BP investors will tell you all types of things but key take away is to call a at least 5 in your area and 5 out of your area and see what they offer, what there ARV limit is and what kind of people they work with. Being a new investor you can expect higher terms but what I have seen is people get different hard money terms depending on there market. You started at the right place but be sure to do your own research based on your market and your goals.