All Forum Posts by: Chris Armstrong

@Tim Mackinem I sent you a connection request. I live in this area and I own and operate in MOncks corner, St Stephen, Bonneau, and other areas like that. 

I would love to connect. 

Investment Info:

Townhouse buy & hold investment in Cainhoy.

Purchase price: $105,000
Cash invested: $105,000

Tired Landlord townhome ends up being a perfect BRRRR-BNB

2 bedrooms 1.5 bathrooms 1008 sqft.

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

The home was very close to my primary residence, and it was easy for us to manage the property ourselves. We had established the working model of Airbnb and got systems in place.

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

I found the deal while I was renovating and getting my first property ready for Airbnb. I looked across the street and saw the current tenants sitting outside with all the doors and windows open in the middle of the summer in the south. I walked over and talked to them and they said their landlord wouldn't fix the air conditioner. Immediately the sirens are going off in my head. I found the owners information through tax records and reached out. Ended up buying from owner with cash.

How did you finance this deal?

Cash and then cash out refinance (BRRRR)

How did you add value to the deal?

We (my wife and I) decided to make it an Airbnb as well since we had seen some success with the first property. We did all the renovations ourselves and rented it out on Airbnb for about 1.5 years to recover some of our expenses and build a nice reserve account. We stabilized the property and established a strong STR track record which then allowed for the Cash Out Refinance.

What was the outcome?

We successfully pulled out enough cash with the refinance to cover the cost to purchase and the cost to renovate the home entirely. In addition, with the way the timing worked out I was able to build a healthy reserve account while we were waiting for the rental history to be established. We still own this property six years later and it's a good performer in our portfolio.

Lessons learned? Challenges?

Always go after every opportunity and don't worry about people saying no because you can't technically lose what you never technically had. Also, you really need to have a healthy reserve in place to weather storms especially with STR.

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

Small Local bank for cash out refinance on STR.

Investment Info:

Townhouse buy & hold investment in Cainhoy.

Purchase price: $105,000
Cash invested: $105,000

This home was purchased in a pretty interesting manner. I found the deal while I was renovating and getting my first property ready for Airbnb. I looked across the street and saw the current tenants sitting outside with all the doors and windows open in the middle of the summer in the south. I walked over and talked to them and they said their landlord wouldn't fix the air conditioner. Immediately the sirens are going off in my head. I found the owners information through tax records and reached out to him to see if he would sell the home to me. He agreed but he wanted to do it through his agent, which was fine with me as long as I bought it ( I was not an agent at the time). I offered him $105,000 in cash and he jumped at the offer.

We (my wife and I) decided to make it an airbnb as well since we had seen some success with the first property. We did all the renovations ourselves and rented it out on Airbnb for about 1.5 years to recover some of our expenses and build a nice reserve account. After 1.5 years and significant market appreciation, we did a cash out refinance and got back $110,000 in cash after all the expenses, so it was a perfect BRRRR-BNB.

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

I was looking for rental properties and this one was priced very well. It was close to my primary residence and I could airbnb it.

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

Tired landlord and right place / right time kind of thing.

How did you finance this deal?

Cash and then cash out refinance (BRRRR)

How did you add value to the deal?

I did all the renovations inside the house that made it attractive on short term rental basis. We stabilized the property and established a strong STR track record which then allowed for the Cash Out Refinance.

What was the outcome?

We successfully pulled out enough cash with the refinance to cover the cost to purchase and the cost to renovate the home entirely. In addition, with the way the timing worked out I was able to build a healthy reserve account while we were waiting for the rental history to be established.

Lessons learned? Challenges?

Always go after every opportunity and don't worry about people saying no because you can't technically lose what you never technically had. Also, you really need to have a healthy reserve in place to weather storms especially with STR.

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

Small Local bank for cash out refinance on STR.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $38,600
Cash invested: $38,600

This property was purchased right from the MLS and was a distressed mobile home on almost an acre of land. The unit is on septic and well, but the utilities are in good shape. The unit currently rents for $500 per month and the tenant takes complete control of repairs.

The long-term plan with this property is to hold it for a few years, then replace the mobile home on the property with a new one and either increase the rent or sell the entire thing for upwards of $250K.

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

It was a low-cost deal that would cash flow pretty well right from the start. The real potential with this deal was the land and ability to flip this whole thing pretty easily for a large amount of profit.

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

I found it on the MLS. I paid cash and I gave my side of the commission to the listing agent so that he would act quickly and respond to my offer. A lot of agents only look at the commission aspect of a deal and they are missing the big picture.

How did you finance this deal?

Cash purchase

How did you add value to the deal?

I will replace the mobile home in a year or two with a brand-new mobile home that is suitable for the size of the septic tank on the property. This will make the property almost $250,000 in value and my all-in cost will be about $120K.

What was the outcome?

It is currently rented and cash flowing each month. I am not yet done with the value add portion of the process but I am ok with that because it more than covers the yearly taxes, maintenance and makes me more of return than the S & P 500.

Lessons learned? Challenges?

Mobile homes should not be ignored just because they are not SEXY like other asset classes. There is a lot of potential in this type of investment and its very affordable.

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

I am my own agent and I used cash.

@Account Closed 

I bet if you went to any meet up or group and advertised your willingness to seller finance you wouldnt have a problem finding a buyer if the terms made sense. I have 100% seen these type deals posted on MLS in my area and on craigslist. On the MLS when you make your listing you just select seller finance in the "types of finance accepted" portion of the listing information section.

@Denzel Ray 

I have def heard about using hard money to do these deals. I am not 100% sure about the time limits between buying and refinance.

@Account Closed

Write letters to property owners. You find their information in the tax records and mail them saying you would like to buy their homes and have a conversation with them. 

IF they respond, you can ask them a little bit more about the property they own and learn as much about their reason for wanting to sell to you. Once you go down the learning/questioning path you can ask about how much they owe on their homes. IF they own the properties 100% outright (i.e. no mortgage) then you can ask them if they would be open to the seller finance concept, but you have to sell it to them with the positive aspects of that type of deal (i.e. reduced capital gains tax, higher interest rate return, steady stream of income, no more landlord hassel..etc). If they decide that works for them, a real estate attorney or title company can set you up with a special contract (seller finance/contract for deed/land contract..etc)  where all of the terms of the deal are spelled out clearly. Then, you close the deal just like you would any other deal.  

I have not personally gone down this path but I was close. I mailed a guy to find out he owned 13 properties and wanted to do contract for deed for all of them. I did not agree with his terms because he was very greedy and wanted like (prime plus 3) 8% rate huge down payment of 40% and a 10 year balloon (huge payment at end) with ability to call note at anytime in between. Make friends with closing attorney and have them review all your stuff before going through with a deal even if it colsts you a little money because spending a few hundred bucks to potentially save you from losing tens of thousands is always worth it. 

@Jacob Cramer 

Couple of flavors when it comes to refinancing. (I may be missing a some so others please correct me if I am wrong/missing) This is 1000 ft view explanation.

1) No cash out Refinance- Changing the terms of your mortgage loan without drawing out any additional equity from home. For example lets say you buy a house for $100K on a 30 yr mortgage @ 3.50% interest rate. You Could refinance that loan into a 15 year mortgage, or if interest rates become more favorable, you could change that aspect of the loan from a 3.5 to say a 3.0. This process does cost money, so reasons for doing it should make sense.  

2) Cash out Refinance- This is the one that is becoming more and more well known thanks to the BRRRR methodology that was hashed out here. Basically you buy a home with cash (or some other means) and there is no debt or not much debt on the home. You then find a lender who will allow you to put a note (mortgage) on the property under a set of terms similar to the ones above in the no cash out example (i.e. 30 yrs @ 3.5% 100K). You can then pull you money back out of the home leaving a portion of equity (typically 25%-35% depending on lender) and you can redeploy your cash.

Debt to income ratio will come into play here unless you have established a rental track record for your home you wish to refinance. I am sure someone will come behind me and spell it out better. 

I just did my first BRRRR yesterday, put in $105K got out $103K and I have a home with $48K in equity in it on a 30 year note @ 5%. Pretty cool deal if I say so myself.

I wanted to hear from people who have taken the leap of faith. When I say leap of faith, I mean have quit a corporate job with steady dependable income for something that may not be as dependable. These questions are not specifically about quitting a corporate job to become a real estate investor, but perhaps a Realtor or a position in another facet of real estate that you're passionate about. Example, I started investing in real estate and along my knowledge journey I decided to get my real estate license. Now, I find that I am way more excited about that career than the one I went to school for (MS Chemistry). I hate waking up everyday for corporate but I jump out of bed to excited to work as a Realtor. I think a change is needed. My corporate job pays about $75k per yr with bonus of 5% (for full context). Salary can sometimes be the reason why people work a job that kill their soul slowly and that's why I share it.

The questions:

1) What were you doing before you took the leap of faith?

2) What facet of real estate made you consider leaving corporate?

3) What kind of money were you making in your corporate role? (no one likes to talk about this but I think its a HUGE factor in the decision and I am the kind of person who will address the un-addressable).

4) How did you know it was the right decision?

5) How long has it been since you left corporate, and do you think you made the right decision?

6) If you could do something differently what would it be and why?

Thanks for sharing a little bit. I am at this crossroads and wanted to see how others have done this.

I wanted to hear from people who have taken the leap of faith. When I say leap of faith, I mean have quit a corporate job with steady dependable income for something that may not be as dependable. These questions are not specifically about quitting a corporate job to become a real estate investor, but perhaps a Realtor or a position in another facet of real estate that you're passionate about. Example, I started investing in real estate and along my knowledge journey I decided to get my real estate license. Now, I find that I am way more excited about that career than the one I went to school for (MS Chemistry). I hate waking up everyday for corporate but I jump out of bed to excited to work as a Realtor. I think a change is needed. My corporate job pays about $75k per yr with bonus of 5% (for full context). Salary can sometimes be the reason why people work a job that kill their soul slowly and that's why I share it.

The questions: 

1) What were you doing before you took the leap of faith?

2) What facet of real estate made you consider leaving corporate?

3) What kind of money were you making in your corporate role? (no one likes to talk about this but I think its a HUGE factor in the decision and I am the kind of person who will address the un-addressable). 

4) How did you know it was the right decision?

5) How long has it been since you left corporate, and do you think you made the right decision? 

6) If you could do something differently what would it be and why?

Thanks for sharing a little bit. I am at this crossroads and wanted to see how others have done this.