All Forum Posts by: Chris Smith

@Stephanie P. Thanks for the feedback. 12% is decent but the margins in the property are backwards. 3pts at closing ($1950) and interest-only monthly payments. The hard money lender has seen the property and comfortable lending on the whole thing. 

@John Leavelle Thanks for the post. 

SFR - $65k purchase, fully funded by Hard Money lender. Closing cost ~$1500 which my attorney would cover the legal side because he is a partner in our business. I wouldn't rehab the property right away due to the tenant in the space. ARV is $70K.

Do you recommend always rehabbing properties right away or some cases waiting because the property turns income day 1?

I do need to get pre-approved for an exit strategy. I have good credit and good income but would rather not risk it. 

The wholesaler offered $55k and they accepted $60k from the original $69k list price. I believe I am not getting enough equity in the property to begin with 70% rule and the interest only payments are $650 which is current income on the property. (tenant has been there 5 years)

I guess for hard money to work on BRRRR I have to get a really good deal to cover my hard money expenses.

If I bought the property with cash. 5% vacancy, 5% repairs, 10% CapEx. $650 rent, cash flow about ~$375.

Thanks for the advice and help :)

Hi BP, I am trying to put together my first deal. I found a property and a hard money lender who is willing to fund the entire purchase with nothing out of pocket for me. I ran the BP BRRRR Calculator and the numbers seem off. I am getting a $5,775 monthly payment?

Hard Money Terms: 2yr, 4pts, 12% @ 65k or 1yr, 3pts, 12% @65k. I'm leaning towards the 1year so I can refi. 

Do most hard money lenders require monthly loan payments?

Or should I ask for interest only payments and then a balloon payment when I refinance in 12 months?

Or is this just a terrible deal in general? I'm showing $650 a month in interest which is the entire income. 

 Tenant just signed a 12-month lease @ $650 rent and has been there for 5 years. (I would consider bumping it up to $750)

Thanks for wisdom and advice! 

Hi Curtis, thank you for the input. Great advice thinking big picture. I have comps from the realtor. It's on MLS for $69k. Wholesaler picked it up for $60k and transparently, selling for $65k.

How to I calculate the last 5 years of appreciation? 

One side note is the areas is a transitional area with a new grocery, new commercial real estate, etc so while the last 5 years tells a story, the next 5 years may be a little different. 

Thanks fellas!

Thanks Soh Tanaka and Rory Cummins great advice. I do need to narrow my goal of cash flow or assets. I've talked about $1M in assets so I'll run with that for now. I ran the property through the calculator. $158 cash flow. 11% COC. On a conventional loan 20% down. Asking $65k for the property. Tenant just signed a 12 month lease until March 2018. 5% vacancy. 5% Repair. 10% Cap Ex. Thoughts?

Hello BP, I understand the 4 benefits of Buy and Hold—Cash Flow being king. The property we are looking at already has a tenant—day 1 income if we were to purchase. My partner's argument is very little cash flow $50-$150. I'm ok with smaller cash flow margin because it's our first property and it's turnkey (11 months left on the rental agreement). The area is up and coming and I believe will appreciate in the next 5 years. (I live a neighborhood over).

Should we turn down properties if cash flow is light but we are gaining the 3 other benefits? 

Do you have a minimum cash flow walk away number you use to analyze deals?

Thanks BP

@Ashley Sanchez - karen tabler and jeff fedder at kw. 

I am new and I'm considering restructuring our LLC (3 total in our LLC, me, a friend and attorney friend—friend has RE experience). My attorney friend really doesn't have the bandwidth to grow the business. Right now we are 33% split. Curious what are the average legal fees on a single family buy and hold property? Is it worth giving 33% for a legal partner, even if we end of doing 2-5 a year? Or is best to pay legal fees when needed? Thanks BP.

Hello, I'm new to REI. I'm currently partnered with a friend who has real estate experience and a real estate attorney. 33% equity split between all three of us. But I have mix feelings about partnering with an attorney. He is very busy and only doing the legal side when needed. My other partner and I are doing all the work. Has anyone partnered with an attorney before? Is it worth the equity split? What are the pros and cons? Thanks for the help in advance.

Hello BP! I'm a passionate sales guy in software looking to jump into real estate investing. My partners include a real estate attorney and an experienced friend who has 1 rental and 3 tax liens currently. 

We are looking to network with wholesalers, private money investors, and other community members to share experiences and add value. 

Currently investing in Atlanta, GA

Looking forward to it!

50/50 and LLC. Build a recurring model together.