All Forum Posts by: Connor Mckelvey

@Nicholas Hernaez

The biggest benefit of real estate compared to stocks in my opinion is the increased ability to control your own outcome.

That being said, for the global economy to function, capitalization must increase over time.

Two or three weeks or so, the S&P 500 has dropped about 25%.

So, my gut reaction is, yes. Dump whatever you can into index funds that are selling at a discount.

However, we don’t know if this is the bottom of the stock market this cycle. If the stock market crashes another 25%, yes real estate will be effected.

This is where Dollar Cost Averaging comes in. This is a lot easier to do in index funds than real estate for the average investor.

Just start putting your money in the market at an equal rate over the next 6mo - 1yr.

If the market swings up really quick, you’ll make a nice return.

If the market keeps going down, you’ll keep buying at a bigger discount. Then once it’s swings up you can decide to hold or sell.

TLDR:

We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.

And what we know know is that people who invest in the stock market are fearful right now. Take advantage.

Hey Folks!

I’m 27 and I own two cash flowing rental properties. My income is roughly $170,000 pre-tax from my W2 job including salary, bonus and stock + income from my properties. I have 0 debt (besides the mortgages on my two rentals) and my credit score is around 790-800.

I'd like to get creative and do more value add / BRRRR properties, but in the market I'm investing in, scooping up the property with a cash offer is really effective.

When buying turnkey/tiny fixers, I just finance with conventional loan of 20% down. But I’d like to try to accelerate my acquisitions.

An unsecured PLOC would allow me to buy in “cash”, rehab, and refinance. At ~11% interest, this seems like a dream. Especially, since I could recycle the PLOC a few times over the duration of the line.

The problem is, for some reason I can’t get approved! Over the past year, I’ve applied for a PLOC a couple of times with banks like Wells Fargo and Suntrust that advertise unsecured PLOCs up to 100k (plenty for my market) and I keep getting denied.

Anyone out there have access to a PLOC and have any tips? I feel like I have the income and the credit, but I can’t seem to get ahold of what I need.

Thanks for any advice.

I purchased my first investment property in April of 2019. Now that it is January 2020, I want to start getting everything prepared to file taxes.

My main source of income is as a W2 employee through salary, bonus and RSUs.

I have various other investments like 401k, HSA, and taxable brokerage accounts.

For all of my income earning life, I’ve just been filing taxes with Turbo Tax.

Now that I own a investment property, I feel like I’m breaking away from what Turbo Tax is best at.

I’m not in a place where I feel like I need to worry about tax avoidance (I probably can’t beat the standard deduction yet), but I would like to find a tax professional / CPA and establish a relationship as I start investing more.

How can I go about finding such a person for individuals / small-time real estate investors?

Anyone have any recommendations in the Boulder / Denver, CO area?

Hello!

I have an offer in on what will be my second rental property and I will be purchasing my 3rd later this year.

For my first property I opened a new checking account for reserves and for receiving rent payments from my property manager. Should I have separate checking accounts for each property?

Please, no advice about forming an LLC unless it applies to both an individual and an LLC.

Wow! Glad to see a Boulder based event! Can’t make it to this one but I’m looking forward to the next one!

Buy 7 figures worth of Credit Default Swaps on Morgage Backed Securities a week before Lehman Brothers files for bankruptcy? But no one has done that before... ;)

Brand new investor here, so these thoughts are from books, not real-world experience.

You may want to ask yourself if you really want a duplex, or if you just want an ~$80,000 property.

Could you buy an SFH/townhome for $79,000 that would rent for $950-1100 (or more) per month instead? Even though having multiple units can help balance out a vacancy, would you rather have 2 lower-income tenants or 1 higher income tenant?

This could mean half as many complaints, half as many late rent checks, and half as many broken toilets and garbage disposals, etc. With a SFH/townhome, you might even attract tenants with families/kids who might stay 2X longer than those tenants who are attracted to a low-rent duplex. This saves on placement fees with your property manager and holding costs due to a vacancy. But it obviously depends on your market.

Just some food for thought! Good luck!

Ok! I've had a stressful couple of day's but I finally got underwriting approval! This thing is moving forward!

What we ended up doing was paying the property insurance and attorney fees outside of closing! After we worked it out with the mortgage company, and the mortgage company cleared it with the attorney, I called up my insurance company and paid the ~$700 in property insurance over the phone with a credit card. Then I overnighted a certified check for $900 to the attorney. 

Total funds paid outside of closing totaled ~$1600 bucks! Paid from that troublesome $3000 gifted funds! Luckily, once I got the official Closing Disclosure, the closing costs actually came in to be ~$200 less! And for good measure, I was able to scrounge up an addition $150 bucks from unredeemed cash back from one of my credit cards and deposited another $40 in spare change I had in a mason jar. Putting us in the clear. 

That's right, I'm paying for a house with spare change.

Thank you, everyone, for the excellent help, advice, and connections over the past few days. What a wild and weird first post! I'm glad this deal is going to work out but hopefully, I will NEVER put myself through something like this again.

@Richard Patrie Excellent information! How did you manage a 6% seller concession? Did you lender do an in-house loan? 

When this deal originated the contract was written up so that the seller would cover up to $5,000 of our closing costs. However, the lender came back and said that the limit was 2% of the loan amount. So the seller is still covering $1,400 closing costs, and then the remaining $3,600 is applicable to vendor invoices for the new flooring and paint that we are doing. So, still getting $5,000 in concessions, but not the whole $5,000 is applicable towards closing.

@Vinay H. I think we both dropped the ball, I should have had the money, but the lender is out to make money too. It's in their interest to bring up issues as soon as possible. Otherwise, they are going to waste a lot of time on deals that don't go through. That's really the reason I think they dropped the ball. Good luck to you! Hope your deal works out!