All Forum Posts by: CJ M.

I've tried all the recommendations, as well as a number of others and unfortunately they won't work (i.e. they don't fund investment properties anymore, I've reached the FM/FM limit already, their terms are not desirable, etc.).

Any other suggestions or lenders/banks that would be worth reaching out to?

@Cameron McCown

Please PM some lenders who offer that rate. Maybe it's just OH, but I have nearly 800 credit and can't even come close to that on an investment property...and I call lenders week-after-week.

@Kendall Short

Nice job, congrats? But I'm curious why you wouldn't think that was a homerun?

Wow, lot's of good feedback and responses. Thanks everyone! I have a number of other things I need to get to, but let me answer these last couple of questions before I abandon this thread and move on...

@Randy Bloch when I said I would probably break-even with 20-30% in equity, it might have been a bit of an stretch, however it could happen if I were to sell right now (which I'm not). For example, after realtor fees, mortgage payments/holding costs, etc. by closing time, a chunk of my equity could easily be chewed up. On top of that, in my market, prices can be a bit volatile meaning an $80K house could be on a street where a few $30K houses just sold, thus driving down property values. Lastly, my notes are all new this past year, so I haven't had a chance to pay down much more on the loans. Anyway, those are just my thoughts as I'd rather err on the side of conservative. 

@Dan H. I think the 50% rule is a good goal, however my experience is that it's not realistic most of the time if a person wants to grow quickly while using leverage. Yes, it's attainable but probably requires more out-of-pocket money upfront. An example of why I don't think the rule always works, my first deal was a $26K purchase. I rehabbed it for another $30K(ish), and it appraised for $100K.  After refi (7% amortized 30 years), I actually made about $8K after recouping my initial costs. It now rents for $1,100/mo. From my understanding, the 50% rule, means that before debt service I need to back out $550 for expenses. That leaves $550. Mortgage is $540/mo  which equates to CF of $10. Not very exciting based on that rule. That said, if I'm understanding the rule incorrectly feel free to chime in. 

@Jeffery Waicak Thank you. I will shoot you a note and maybe we can connect. 

Again, I appreciate everyone who took the time to comment. I also know it's tough to have a full understanding of one's situation via a quick question/post online and I do have a few great take-aways from this discussion (pro's and con's). REI has been an exciting ride for me to say the least! I've been fortunate to grow my properties by double-digits this past year (along with being blessed with a truly wonderful support system and mentors!) and I'm planning to grow the same this year. BP has been a fantastic tool and I'm looking forward to future discussions on here!

If anyone would like to connect or chat further, feel free to reach out to me on BP. Thanks again everyone, and best wishes!

@Dan Heuschele

Hey look, no worries about being the contrarian Dan. I really appreciate the time you took to provide that feedback...and you are spot on with your numbers. That said, keep in mind, the CF is nearly double those numbers if I don't back out 25% every month for allowances (which by then I shouldn't need to as I'll have an EF/reserve stocked away). 20 isn't going to be too bad to manage either as everything is rehabbed and local, and I have a W2 job... so 100% of profit gets reinvested back into the business.

I was thinking of things started getting too heavy, I would hire a PM. Yes, they cost a bit, but I'd still have decent CF from not doing much.

I could be off base on my thinking, but that's why I'm posting here.

@Nathan Shotts

No providers, just local investors and sellers

@Robert Arquilla

My area is a PIA with inspections too!!

Llllooonnnggg story lol. Quite frankly, I was unexpectedly laid off from a "stable" job I was at for 7 years (and 3 months after I relocated for it). I took a job as a consultant to pay the bills and thought "never again will I let my livelihood be determinded by someone else." I felt like, if I was going to fail, I was going to do it on my own terms in the future...so I found a crappy SFR in a good area, made an offer which was accepted, then BRRRR'd it successfully. At the same time I put myself out there (no egos in this business) and got to know local investors. Since then I've rehabbed some properties of my own, but have bought more off of others I've become close with.

I just recently joined the local REI, and have been enjoying that as well, so I'd recommend doing that.

@Kirby Davis

Hi Kirby, some are turnkey from local investors/sellers, some are properties I've rehabbed. Price points are usually from $30-$65K all-in.

@Brian Gerlach

Thanks for the response Brian. While I have 20-30% equity in all of my refinanced properties, I can't say I would even be able to sell them now for what I owe on them. That's ok though, because I'm looking to hold them lomg-term. Also, in the area I'm in, there's little to no appreciation, so I'm mainly looking for CF and equity build-up as I try to grow quickly.

@Max T.

Hi Max. I've only been in REI for a little over a year but I have re-rented a couple of times already with no issues.