All Forum Posts by: Chris Collins

@Caleb Heimsoth I’m leaning towards agreeing with you. Thank you for the reply!

@David Acosta I have used the Brrrr strategy to purchase a number of my properties. I buy them on a line of credit, fix them up and refinance to pay the loc off. It has worked well for me. 

The duplex with the equity was purchased the old fashioned way in 2016, 25% down. The area that it’s in has appreciated quite a bit over the past few years, so I was looking to pull the equity out to purchase another property without having to pull cash out of savings. Allowing me to accelerate the growth of my portfolio slightly.

@Brandon Roof Thank you for your reply, and I appreciate the advice.  You basically nailed my dilemma.  Leaving money on the table in a hot market (overheated or toppy maybe) is difficult for me to not convert into cash, because there is some risk to not turning that equity into cash as well.  I suppose the best of both worlds maybe as you suggest, leverage the rentals and leave equity in the two properties that are more important to the financial support of my family, as we do not live off of the rental income, we just save it.

Hello Bigger Pockets Community,

The advice I have read and received from this community has been instrumental in building my real estate portfolio.  I wanted to run a scenario past those in the community to see what general consensus is.

I currently have 7 residential rental properties (4 duplexes, 3 single family) and a 14,000 sq foot industrial building (owned with partners for our HVAC business).  One of my duplexes has enough equity to purchase another property.  I also have a personal residence with equity.

I could refinance my duplex, and pull out roughly $35,000 to invest elsewhere.  My cash flow on the property would go from $550.00 per month to around $390.  I would then take the $35,000 to purchase another duplex in the same area, cash flowing around $325-$350 per month.

I could also refinance my primary residence and pull out $100,000 in cash to invest in more properties similar to that mentioned above.

My goal is to build my passive income stream, however, I have a wife and a three year old son, so managing risk is also important to me.  Does it make financial sense to do two refinances to pull cash out and buy more properties?  Am I greatly increasing the financial risk to my family?

Thank you so much for your help and advice.

Chris

Hey Cara,

Shoot me a message and I can give you a few names!

Thanks

Chris 

@Rick MacGills  Some of the cities you listed can vary street by street.  East Cleveland is the only one I would say is a true war zone.  I know there are some areas in East Cleveland that are trying to come back, but the police there dont have enough resources to keep the area safe.  

Some of the cities you listed have some great opportunities. Garfield Heights has some areas that are great for rentals.

@Oren K. I would certainly be interested in the 20k space.  Do you mind sharing where it is located?  As far as the property mentioned, it is right down the road from where we currently are, which is a benefit, as we have a lot of customers in the area and would make the move easier.  I also have knowledge about the mechanical systems in the property as we have serviced and maintained them over the past 10 years.  

With that said, I am not much for paying a premium with anything.  I would rather buy at a discount and add value.  Thats why I wanted to be sure that the property is over valued before I move on.

For what its worth, there is a single family house out front that he is "adding to the deal" which would bring 950-1000 in rent.

Thanks,

Chris

@Matthew King would you mind sharing what you believe fair market value is for the property via direct message? I can easily inspect the roof (and would, depending on how far the discussions go). Mechanical fixes are not part of the NNN, however, are an easy item for me, as that is what my day job is. I have very deep knowledge about the property as we have a maintenance/repair history over the past 10 years.

Thank you for taking the time to read my question.  I currently own (2) duplexes and (2) single family rental properties, so I have limited real estate experience.  I have no experience analyzing commercial property.

Long story short, I own a commercial/industrial heating and air conditioning company.  We currently rent 4800 sq feet and need  more room.  Instead of renting a larger space, it seems more prudent for me to purchase a property and have my company rent from me.

One of our customers has an industrial/mix use property for sale that is 23,400 square feet in the area which I am looking (east side suburbs of Cleveland, Ohio).  The property is broken up into (9) 1800 sq foot units (building 1) and (5) 1440 sq foot units (building 2).  Each space has a 12x12 over head door.  

My company would take over building 2, and the build out would be done through the company as leasehold improvements.

With my company taking over 7,200 square feet, the building would be at 100% occupancy.  

The property is currently triple net lease. Utilities are individually metered. Rents are $5 per square foot.  Taxes on the property are around $25,000.00 and i am projecting insurance to be $8,000.00.  I have figured a 10% vacancy rate.

The property is listed for sale for $950,000.00

Based on my initial analysis, the list price seems pretty high.  I end up with slightly negative cash flow.  However, I am by no means a commercial expert. How would you value this property?  What would be a reasonable offer?  Are the sales price and a reasonable offer too far apart to make a deal work?

Bigger Pockets has always been helpful.  Thank you in advance for your insight and expertise.

Chris

@Brad Fausett I own a commercial HVAC company that services north east Ohio.

Where is the property located? If I can't help you I'm sure a connection I have can.