All Forum Posts by: Cliff Harrison

Don't spend any money with anyone for anything until you spend at least a couple of months on this site and doing other research on your own.  Listen to the podcasts and read the recommended books.  Be patient and strategic.

My own favorite strategy is BRRR for buy-and-hold. It's a thing - use the search feature to learn more about it. In the right market, with patience and good deal selection, your $100,000 can be preserved and you will build a rental portfolio. Best of luck.

Hi Jim, I get a few inquiries on this each time I mention it. I am currently working with Bank21. These are commercial terms, but I am getting a 20 year amortization. Note that I do not finance the initial purchase and rehab for my BRRR properties, that is on me.

 Thanks Rick.  I'm an IT leader at a small company, I have infrastructure, custom development (.net), and BI/datawarehouse teams.  I closed on my first SFRs about one year ago.

I first started looking in JC well over a year ago when I was starting out. The closest I ever found to good deals were in Olathe, Spring Hill, and Gardner at that time, but ultimately found my time was more productive in Jackson and Cass counties. The numbers work better, although I pretty much give up on appreciation. I have never had a financial partner, but use local banks, contractors, realtors, wholesalers, etc - a whole of team of people. With the BRRR method if you buy right, hit your rehab budget, and maintain adequate operating reserves, you will not run out of capital. Good luck!

Merry Christmas and Happy Holidays.

Closing one more SFR before 2016 arrives. #22 is a 3/1 ranch needing a lot of interior rehab and roof, located in south Grandview, MO. It has a pretty nicely done converted garage and a large walkout basement. My plan is to put in two bedrooms and a bath downstairs, and add a bath upstairs. Plus full cosmetic remodel and some wall removal to open up the main floor plan.

This one will most likely be my most expensive rehab to date.  I got the house $20k, and anticipate sinking 25k into the rehab.  I expect the appraisal to be in the low $60s,and my lender will lend up to 80% on that not to exceed purchase + rehab.  Unless we run over on rehab should be getting all cash back out on refinance (no seasoning period required).

I expect to rent it at $1050 sometime in March.  This will be my 6th house in this particular neighborhood which is a C+ overall although the first five bedroom I've put on market in this area.  I don't expect any appreciation in this area but one can hope.  The taxes in this area run about $600 per roof annually but still are part of a decent school district (Grandview) compared to KCMO/Hickman.

Hope everyone had a great 2015 and that you set your goals high for 2016. I plan to shift towards small multifamily and higher end SFR after getting a few more cash flow SFRs.

Cliff

Welcome to the site! If you look at my posting history I have chronicled my deals this past year starting from square one in the kc area. I live in OP and am willing to help if you want.

Is the $900 market rent - can you raise it by adding value to the property or just making market adjustments?   A $1800 rent income on a 3.5% down payment $200,000 property will be very thin and possibly negative cashflow under most models/assumptions.  

Please make sure you  know exactly why you are doing it before you invest.  Such as very favorable hard comps.  You may not have a good model yet for estimating capex and other expenses that will come over time.  Expenses tend to be underestimated in deal analysis.  

That said, look at some other deal analysis posts where deals have been presented for comment. Note the information that is included, and make sure you know that information. That will also improve the quality of the feedback you receive here. What are the taxes? The insurance? What is your P&I payment? How much down? Maintenance expense budget? CapEx expense budget? Vacancy (if a long term investment)? Age of HVAC and roof? Age of building? Condition of plumbing, electrical, and appliances?

Also most people won't know the market like your local professionals.  Is there upside? Is it in a growth area?  Are the demographics good?

Good luck and thank you for your service.

Hi Chris - I am always interested in a good deal on buy-and-hold properties.  Keep me in mind.  I prefer outside the loop south kc (not ruskin) and grandview, belton, etc.  Bannister areas are ok depending. I also prefer properties that need some rehab and are priced to sell.

Kansas City BRRR update - close out update on Property #17.

In case you are doing/considering BRRR I wanted to close this out and let you know how the final numbers worked out.

I finished out the lower level with a shower bath but am not making it a separate apartment. So the house is a 5 bedroom 2.5 bath with 2 beds and 1 bath in lower level.  My all-in rehab cost was $14,000, and purchase was $49,000.

My hard appraisal for the cash-out financing was $93,000, and my lender lends up to 80% of appraised value up to and not exceeding the all in purchase + rehab cost so I could get all the cash back out if I chose but I am leaving a little behind to meet cash flow and equity goals.

I have a tenant lined up on a two year lease at $1150. The rehab took a bit longer than I would prefer but I did not have any HML to worry about.

So this particular BRRR deal seems to have worked out and I have the cash back to do it again...and again..

Hi Alicia or Anyone else in this thread - is the Tax Rate for a particular area contestable?  There is one area in 64137 where I own 6 houses.  I can't really argue about the market valuation on the houses, but the property tax itself is much higher than houses I own nearby in 64134 and 64130 with similar market values.  For example, market value $65,000 but annual tax bill $1400 in Terrace Lake (or St. Catherines) but market value $60,000 annual tax $900 in Fairlane/Robandee and similar $60,000 property is $600 nearby in Grandview.  Is there a process for challenging the levy rate on an area?

thanks

Cliff 

 Hi Rodney i am acquiring in Grandview area. If you are interested and you are getting a great price on the buy you may consider flipping one or two to me for cash profit if we could make it win/win.  Cliff