All Forum Posts by: Clark Kirkpatrick

@Jerryll Noorden Lakila does not want to market a house, she wants to market her contractual interest in a house. She's not selling a house. She's selling a contract. The homeowner is selling the house. Putting a photo up of what the contract will get you - is that illegal? I'm not a wholesaler or a legal expert, so I actually don't know.

Wholesalers that I buy from do market their houses with photos. They generally send them to their email lists. And these are people with proper legal teams that back them up, so I am quite confident that this is legal. Is it somehow different to do the same thing on Craigslist instead of an email blast to your general list?

The contract the wholesaler uses says "and/or assignees" or something like that, which allows for the wholesaler to assign the contract to someone else. What law are you referring to that prohibits them from advertising their interest in a contract that allows for assignees?

The cap rate for your building should go up if you raise rents. That would increase the appraised value of the property, since (as you correctly pointed out) cap rates are a market indicator. So if properties in your market are selling at a 9 cap, and you bought yours at a 9 cap (basically, you paid a fair market value for it) and then you increase the NOI, the results will be:

1. The cap rate for your building is higher than it used to be

2. The appraised value (which is related to cap rates) for your property will increase

3. You can refinance your property for more cash out, or sell it for a greater profit.

The cap rate for your building will not, of course, affect the cap rates in your market. But a change in your building's cap rate (to you, now) will result in a repositioning of your building within the marketplace. It'll be worth more money.

Hey Krunal, I think that you could do this IF you and your family have a very trusting relationship. If they get the loan, then their name must be on the deed. That means that they technically own the house. You might be able to get their name AND your name on the deed, but their name must be there. So if you trust them to not sell the house and run with the money, and they trust you to actually make the payments, then this could be feasible.

Welcome Kat! Your construction experience is a big leg up on the competition, so BRRRR could definitely work for you!

1. I live in a good rental area, and a lot of investors like places in the South (Carolinas, AL/LA/MO/KS/TX/TN etc.). Around me, $30-$50k won't get you a rental with tenants that you'd want to have though. Closer to $100k would get you a single or duplex with some desirability and a broad tenant market, since it's a decent place to live. 

Wholesalers can be awesome. Just make sure you really know what you're doing/getting into - you need to independently verify what they're telling you in terms of market rent, ARV, rehab costs, etc. And that they actually record the deed. I just had to fight a wholesaler on that last point. Not good.

2. Banks verify your employment literally the day of closing to make sure you haven't quit your job (or gotten fired!). This is really important and you're going to have to talk to a bunch of lenders to figure out how to overcome this issue. Make some calls. Try small credit unions (conventional bank lenders) and try non-bank lenders (can be found on BP!). Lenders want to lend to borrowers with verifiable income. 

Another option would be to buy with cash and then do a cash-out refi later. This could be easier since you already own the place, but again - call around and see what lenders say. Another issue with your plan is that lenders don't like to originate loans under $50k (or $100k, depending on the market). Finding financing for a more desirable property is much easier than for a $30k property. 

3. I started researching in January (reading the books and listening to the podcasts), waited till I got back from a trip to China in July, then bought the 3rd house I looked at, a duplex which I closed on in August. Nothing will grow your portfolio like getting and maintaining some investing momentum. Momentum will keep your train running so that you won't be tied to your job in due time.

Cheers!

You could always advertise the deal online - put up a photo and some basic numbers (purchase price, market rent, ARV, rehab cost - or whatever) and say that you're looking for a cash buyer with a quick closing. Facebook marketplace, Craigslist, etc. If it's really a good deal, I bet people would respond.

Downingtown schools are sought after in that area. 

I just got a quote for a loan on a triplex. Purchase price is $140k, and the quote lays out each line item that I'll be charged for.

One of the lines says "Investment Property Fee - 2.125% - $2,231.25

I haven't seen this before. Has anyone else? Should I try to negotiate it down (or negotiate it away entirely) or switch to a different lender? Or is this normal?

Thanks in advance!

@Brian Beers Red Rabbit insurance is far and away your best option. 

If you sell, you'll have to pay costs associated with the sale and then (since you have no equity) you'll walk away with nothing.

If you hold, your tenants will pay off your mortgage and you can refi or sell later and actually turn the equity into cash.

Cashflow is icing on the cake.

I think you'd be well served to revisit finding a property manager. I'd bet money that the St. Louis area has a good one, and if you find them, they'll remove all your headaches and the distance problems associated with this place.

You'll probably have to pay them most of your cashflow. But so what? Your time is better spent doing what you're doing at, which doesn't require you to drive 2 hours. That time is valuable to someone with a rare and valuable skill, like a CPA.

Offload the headaches and keep your tenants paying off your mortgage. The time you'll spend finding a good PM will far outweigh the amount of time you'll spend managing yourself, and if your time is worth $50/hour, then you'll be paying the PM less to manage your property than you'd be losing by driving there to handle issues yourself.