All Forum Posts by: Logan Turner

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $92,000
Cash invested: $44,500
Sale price: $208,500

https://www.zillow.com/homes/4208-Delwood-Ave-Odessa,-TX-79762_rb/50459721_zpid/

What made you interested in investing in this type of deal?

Low time required and good margins

How did you find this deal and how did you negotiate it?

wholesaler

How did you finance this deal?

Private money, 12%

How did you add value to the deal?

good GC, able to do a good remodel.

What was the outcome?

45k flip profit

Lessons learned? Challenges?

get a checklist for things on my end

@David Chapoell 1 point higher, shorter Am period.

There’s pros and cons to each. If you have a well built system then don’t slow down with conventional. If you don’t have great deals, great contractors and huge demand for your rentals then wait and get the best financing. But again, if you have the system, you can get 3-4 houses vs 2 per year.

Those houses more than make up the increased cash flow on conventional.

I’d say most people don’t have the system right away and that’s ok. Start with conventional as you look for the next great deal, and keep upgrading contractors. Usually at 3-6 conventional loans you’ll have it figured out.

@David Chapoell

Commercial lenders will refinance with NO seasoning and will refi based on the ARV (from a broker priced opinion vs a full appraisal)

This not only saves you $400-800 on the appraisal but also allows you to refi all of your money out.

This allows me to turn $120k 3-4 times a year, resulting in 3-4 houses.

So how do you do more? Find more private money. 600k is around 5 houses ever 3-4 months which is 15-20 houses.

Now I recommend increasing cash reserves as you grow and making sure each property makes sense as an individual rental. For me that is cash flow $200 minimum after all expenses on a 20 year loan.

It’s not good enough to just get all your money back. You also need to make sure the houses can perform well as rentals.

What your left with us 40-50k in equity, cash flow of $300 a month, debt pay down of $250/month and possibly some appreciation and tax benefits. And at the end of the day, all your cash still.

1. Must make good deals

2. Must increase cash reserves as you grow since this will be what gets you through black swan events like now.

People who have called many lenders that won't lend on ARV or have seasoning... keep calling. You choosing to give up just hurts yourself. There are plenty of banks that lend on these terms and still lend.

@Mary Baccellieri

Brrr is one of the fastest ways to accelerate wealth. Stabilized value add is more appropriate with commercial and requires more sophistication.

Private money always first

Your money and income to back it up

Hard money If above two fail AND you have a homer run deal. To me that is buying 30-40% of ARV.

I’ve purchased and brrrr’d 50 houses in the last 4 years. 45 of them from a distance. 40 of them never seeing them in person. And I don’t call it a brrrr I call it an infinite return because when I’m all in for 120k and the bank says the house is worth 165k and gives me a loan for 120-130k. My return is infinite.

Commercial loans don't require seasoning but need LLC and terms are 1-2 points higher and shorter AM period.

6 months and refi with residential loan Fannie Mae. 30 year fixed at 4.x%

You need to build the team.

Wholesalers

General contractors

Property managers

Broker/realtor

Lender.

You must know the area, know how to analyze a rehab and rental analysis.

It’s not hard but requires some

Learning and repetition and common sense.

Again, value add is solid IF you have a networth, or have specialized skill (mobile homes, storage, multfamily)

Infinite returns with single family houses is the best way for quickly growing your networth, increasing cash flow and having velocity of money.

@Monica Pogue

Im an investor with 50

Units in midland / Odessa.

Rents are softening. I would ask the landlord.

Sounds like he is doing a bad job maintaining the place anyways. 4-6 miles is a much different location so also factor in the area you would be moving to. But an apartment with maybe 1-2 months free rent with 12 month lease and amenities and well maintained would be my preference over location.

Either way, ask for price drop or find a better quality of living place.

@Anthony Fontela

I’m still buying. Plan on buying 15 more this year in midland and Odessa.

@Julie Pedraza

Hi Julie,

I own just shy of 50 units in the area. (Midland/Odessa). Depends on the area, but $1500 is way too low.

My guess would be $2100-2500. But, rents are still dropping as oil jobs are finishing up and letting more people go.

Might be a good idea to go for the lower end to lock it up and re-assess next year.

@Marvin Gavins

Is it owned in a single member LLC? How long have you owned it?

You could transfer it cash deed to yourself. Then refi if seasoning of 6 months has occurred.

If not single member LLC you can keep it in LLC and use a bridge loan, or a rehab loan via commercial lender or hard money lender or even private lender.

What’s your ultimate goal? Hold as a rental? Flip? Occupy it?

Most Recent BRRR / infinite return SFH

Purchase: $15,500

Rehab: $55,800

ARV: 117k (BPO mis appraised as a 2/1 when it is a 3/1. Should be closer to 130-135k)

Commercial loan: $93,600

Cash back: $22,000 in tax free dollars above my cost.

Just leased: $1495/month

Expenses: 954.37

———————————————

Net Net income: $540.63/mo

And $22k in pocket.

Not a typical deal but happens more than you would think.

@Account Closed I know the exact property you are talking about. The listed selling broker is my property manager for my midland properties. 

That place has been listed a long time ago as you mentioned and I believe it sold a long time ago as well. 

But reach out to Him And double check.  He also sold a few in Odessa that we’re listed for a long time but I believe all sold pretty quickly.