All Forum Posts by: Clayton Smith

I am in the Tuscaloosa market exclusively. The numbers may work out on this one but that is an extremely sketchy area. I have a good deal of section 8 properties in the Alberta area of town so I don't mind lower income properties / areas. I was the 6 plex that is now listed off market and I drove the area and would not touch it. My comment to my property manager is that I would have to buy him a pistol to collect rent. I would juice up your numbers more than normal to cover for the headache factor. 

 I am local to Tuscaloosa. Send me a PM and tell me who you have been using. I have some suggestions of who to use. 

 you are correct but it makes it difficult to decide sometimes. Especially since it never going to be a one for one trade.

I know my current average ROI is in the 20s. Been trying to find a good answer on this for a while and can't seem to come up with one.

Thanks for the post

Looking to get some advice on when it is time to pull equity out of a house. Trying to find a formula that I can keep an eye on month to month. 

I have some equity in my portfolio but with higher interest rates my payment will increase significantly on some of my rentals. So let's say I can pull out $25k with $2,500 in closing but my payment will go up $500 a month. How do I decide if it is time to do that. Seems like the ROE is to simple for cash out refi because it doesn't take into account the loss of cash flow by increasing the payment. 

Is it as simple as the yearly increased cost divided by the amount I took out to get a return divided by the number of years it would have taken me to accumulate that amount without the refi? 

Any thoughts or advice would be appreciated. 

 Hi Sean, 

I am interested in a line of credit. Is this something you can offer? 

Thanks 

Clay

Thanks. I am looking to BRRRR a small multi soon as I can find one that the numbers work. hoping to make that leap soon!

It is great that I would have no money left in the deal but I guess the thing that is tripping me up is the ROE. Ideally I like to keep that number over 10% when I buy and when it creeps to around 5 it is time to trade up or refi. Starting out with that number around 5% is giving me some pause. 

I am also in a market that is closer to cashflow than others. Meaning that I am not investing in an area that will see the house value double in 10 years. If that was the case I would for sure hold it. 

I do have other deals in the pipeline that I could use the money to purchase myself instead of bringing in partners for a equity share. 

I appreciate that! I have property managers for all my rentals so they are pretty much on cruise control. Just have to check the reports at the end of the month and make sure everything is correct and tenants have paid. I typically have 2-3 renovations going on that I manage. I have great contractors as well as a w2 handyman to help out with misc. repairs. Building teams and systems helps out. 

quick money vs long term money is always a struggle. 

Thanks for the kind words! Means a lot to hear that. I feel like I have been grinding away and am kinda stuck. Tough to see the progress sometimes from an outside perspective when your in it everyday.  

Hi, 

I am a mainly a buy and hold investor with 25 doors. I also do some flips to fund my rentals. 

I am finishing up the renovations on a SFH in Tuscaloosa Al. I took a 3 / 1 that the floor joists were collapsing and turned it into a very nice 3 / 2. I had a healthy budget of $82k and when I am finished I will be between $82-84K so pretty close to my numbers. The house should appraise for $220 - $230k and should be able to leave $0 dollars in the deal and possibly can even get some cash back.

I will be all in for around $170k. 

I can refi it and rent it for $1800 a month and cash flow around $200. Not great monthly cash flow but infinite cash on cash return. 

I can list the house for $230k. I feel pretty good about getting that price. Seems like you always get a lower appraisal on cash out refi's because the appraiser doesn't have a contract value to chase. 

Considering I am all in at $170k and could list it for $230k after paying a relator I could make a profit of around $45k on the flip. 

Some information about me to help with advice. 

I purchased a 10 unit portfolio in April for $690k so I will be able to cost seg and depreciate a large chunk to offset taxes. 

I have already done 3 flips and am currently around $50k profit this year with a few more in the pipeline. 

My goal is to get to 30 doors by the end of the year. 

Deal flow is ok but not great. I will definitely have another project to put the money back to work but I am not turning deals down because of lack of capital. 

Ultimately I would like to find a 8 - 20 unit multi family to purchase but have not had any luck finding it yet. 

I still work a W2 job so right now I do not need any funds  for living expenses. 

Do I take the quick flip money or continue to build my rental portfolio? 

Any advice would be appreciated. 

I have a STR in Tuscaloosa along with a 25 SFHs standard rentals. We are struggling to keep it occupied and even break even. You are correct that we will have a good opportunity to make money in the fall but that is only 7-8 weekends a year plus graduation and few small events. I originally wanted to target travel nurses but they have not been realistic with pricing. They want to rent a furnished house with utilities for less than I could rent it out to a standard tenant. We are located in a good area 1 mile from the stadium and central to everything. I am going to see how football season goes but I am most likely just going to rent it to students for $1600 - $1800 a month instead of STRing $2k a month. With all the utilities I am actually making much less than if I had it as a standard rental.

Also, you have to get a zoning ordinance from the city and go in front of the zoning board to get approved. They watch AirBnB like a hawk and if you are advertising without approval they will shut you down. 

I would look in Birmingham or a true vacation market.